Online Gambling in India

March 24, 2023

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The Tamil Nadu Assembly has recently re-adopted the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Bill, 2022.
The Bill was tabled again in the House after Tamil Nadu Governor R.N. Ravi returned it previously saying it was ultra vires of the Constitution and against the judgments of courts.
The Bill was first adopted in the Assembly after the government conducted a School Education Department survey in 2022 to ascertain the impact of online games on students.

What is Online Gambling?

Online gambling refers to the practice of participating in gambling activities over the internet.
It involves placing bets or wagers on various games and events with the aim of winning money or other prizes.
It can be played on various devices, including computers, laptops, tablets, and smartphones and involves the use of virtual chips or digital currencies instead of physical cash.
The global online gambling market size was valued at USD 63.53 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 11.7% from 2023 to 2030.
The Asia-Pacific region is the largest online gambling market, with China and Japan being the biggest contributors.
Online gambling is regulated in most countries including India with varying degrees of restrictions and laws.
Major Types:
- Casino games: These include slots, blackjack, roulette, and baccarat, among others.
- Sports betting: This involves placing bets on sports events, such as football, basketball, cricket, and horse racing.
- Poker: This is a card game played against other players online.
- Lottery: This involves purchasing tickets for online lotteries that offer large cash prizes.

Challenges of Online gambling

Addiction: Online gambling can lead to addiction causing severe financial and social problems as it is easily accessible, and players can spend hours playing games without realizing the amount of time and money they are spending.
Lack of Regulation: Online gambling is often unregulated, making it easy for fraudulent activities to take place. This can lead to players losing their money or their personal information being compromised.
Underage Gambling: Online gambling sites can be easily accessed by minors, leading to underage gambling. This can cause severe psychological and financial problems for children and their families.
Money Laundering: Online gambling can be used as a means for money laundering, where players can deposit large amounts of cash into online accounts and then withdraw the money in a legitimate form.
Cybersecurity Risks: Online gambling sites can be vulnerable to cyber-attacks, which can lead to the theft of sensitive personal and financial information of the players.
Social Isolation: Online gambling can lead to social isolation, as players can spend hours playing games online, leading to a lack of social interaction with family and friends.

Advantages of Online Gambling

Accessible entertainment: Online gambling provides easy and convenient access to entertainment for millions of Indians who may not have access to traditional land-based casinos or gambling establishments.
Revenue generation: It can generate significant revenue for the Indian government through taxation and regulation besides creating jobs and business opportunities for Indian entrepreneurs.
Tourism: It can help promote tourism in India by attracting foreign players who are interested in Indian-themed games or unique experiences that are not available in their home countries.
Responsible gambling: Online gambling platforms can provide responsible gambling resources and tools to help players manage their gambling activities and prevent addiction through setting deposit limits, self-exclusion programs, and problem gambling helplines.

Laws governing Online Gambling

The laws governing online gambling in India are complex and vary by state however, there are some overarching laws that apply to the entire country:

Public Gambling Act, 1867: It is a federal law that prohibits operating or visiting a gambling house. However, this law does not specifically mention online gambling.
Information Technology Act, 2011: It was amended to include provisions related to online gambling which states that any website that offers online gambling services must be located outside of India.
Many states in India have their own laws related to gambling with some states, such as Goa and Sikkim, having legalized certain forms of gambling and issue licenses to operators.

Major Court Judgements:

Dr. K.R. Lakshmanan vs. State of Tamil Nadu (1996): The Supreme Court of India held that games of skill, such as horse racing and rummy, are not considered gambling under the Public Gambling Act of 1867.
State of Andhra Pradesh vs. K. Satyanarayana (1968): The Andhra Pradesh High Court ruled that playing rummy for stakes is considered gambling and is therefore illegal.
Varun Gumber v. Union Territory of Chandigarh (2017): The Punjab and Haryana High Court declared that online fantasy sports games, such as Dream11, involve a substantial degree of skill and are not considered gambling.
Mahalakshmi Cultural Association v. State of Tamil Nadu (2013): The Madras High Court held that online games of chance, such as poker and rummy, are considered gambling and are therefore illegal.
Shri Krishna Agrawal vs. State of Maharashtra (1999): The Bombay High Court ruled that the game of poker involves a substantial degree of skill and is therefore not considered gambling.

Way ahead

Overall, online gambling poses significant challenges that need to be addressed by regulators and policymakers to ensure that players are protected and that online gambling is conducted in a fair and responsible manner.
The legal landscape surrounding online gambling in India is complex and can vary widely by state thus there is need for individuals to be aware of the laws in their state and to ensure they are only participating in legal and licensed online gambling activities.

Source: TH