Indian online gambling – A September 2019 study by KPMG India estimates that India’s online gaming industry will grow to 250.3 billion rupees by 2024.

Gambling is banned in India. The Public Gambling Act, 1867 and many local acts passed by states make it a prohibited act with penalties ranging from fines to years in prison. Despite these laws, the Federation of Indian Chambers of Commerce and Industry (FICCI) estimates India’s illegal gambling market at more than Rs 3,00,000 crore, which is roughly equivalent to India’s defense budget of 2019. India spends 10 billion dollars or 7.5 thousand rupees on agriculture, education and health.

Indian Online Gambling

Indian Online Gambling

The CBI report on “cricket-fixing and related irregularities” points to the emergence of betting organizations and cartels run by dealers and players on the ground and the involvement of the underworld. According to the report, it was about 20 years ago and betting on any one-day international match anywhere in the world was over a billion.

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Today, betting is now online with clean interfaces, integrated payment systems, dashboards for calculating odds, notifications and mobile applications.

There is a vague opinion about the application of gambling rules on the internet, since the rules are more appropriate to apply to gambling houses and related services. Complicating this situation is the designation of some sports as “games of skill” where “success is highly dependent on the improved knowledge, preparation, care, experience and skill of the player” and players can sell, bet and exchange money in one game. . It is important to discuss the policy regarding gambling especially on the internet because it can be used as an opportunity to prevent risk as well as possible profit.

Rule 3(2)(b) of the Information Technology (Guidelines for Intermediaries) Rules 2011 read with section 87(2) (zg) read with section 79(2) of the Information Technology Act The information describes 2000 “intermediaries” as Internet providers. service providers, internet service providers, search engines, telecommunications operators, etc. to receive or transmit any content that, in particular, is related to or promotes gambling.

According to the Constitution of India, betting/gambling is a state matter and each state has exclusive powers to make laws within the country. Most of the state laws and the Gambling Act, 1867 were passed before the advent of online gambling/gaming.

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Gambling laws are common as most states prohibit gambling/betting but make exceptions for games of skill. Therefore, if the game qualifies as a game of skill, the restrictions of the Gaming Act do not apply. In RMD Chamarbaugawala v. In Union of India, the Apex Court relied on the ‘competence test’ to determine whether a particular activity is gambling or not. The court found that competitions that mainly involve skills are not gambling activities, but commercial activities protected under Art. 19(1)(d).

To understand the current legal status of online gambling/gaming, we need to look at the following categories: Fantasy Games, Betting, Casino, Lottery and Poker.

A. Fantasy Games: Skill-based games are exempt under the Gaming Rules. The Nagaland Gambling Prohibition and Promotion and Regulation of Online Skill Games Act, 2016 clearly defines team selection games and fantasy league games as games of skill like chess, sudoku, quiz , binary options, bridge, poker, rummy, gambling, spades, auction, solitaire, golf games and real racing games. A license is mandatory if such games are offered online in the state of Nagaland.

Indian Online Gambling

The fantasy game Dream 11 has recently been held as a game of skill by the Punjab and Haryana High Court. Even the Bombay High Court in the case of Gurdeep Singh Sachar v Union of India recognized that this form of sports is fun as a game of skill.

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B. Bet: The Supreme Court in the case of Dr. K.R. Lakshmanan and the State of Tamil Nadu believed that betting on horse racing is a game of skill and therefore free from the restrictions of most G a m i n g laws. These exemptions to the rules of the game are subject to certain conditions, and in the case of online horse racing, these conditions will be difficult to meet. But the argument that horse racing is a sport of skill can stand regardless of these exceptions.

C. Casino: Casino falls under the category of gambling and betting and is prohibited by many laws. Certain aspects of casino games under the Sikkim Internet Gaming Act (Act), 2008 and the Sikkim Gaming (Act) Rules, 2009 can be offered through the state-wide intranet only in the State of Sikkim.

D. Poker: Poker is recognized as a game of skill in some states of India: (1) such laws/regulations as in the state of West Bengal exclude it from the definition of “gambling” under the West Bengal Game and Reward. Competition Act, 1957; Nagaland law has designated poker as a game of skill; and

(2) Courts such as the Karnataka High Court also hold that a license under the Karnataka Police Act, 1963 (“Karnataka Act”) is not required when poker is played as a game of skill.

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On the contrary, in the case of Dominance Games Pvt. Ltd and the State of Gujarat, the Gujarat High Court recently held that poker is a game of chance and an act of gambling under the Gujarat Prevention of Gaming Act, 1887 and is therefore prohibited in Gujarat (to be discussed in petition).

The question of whether sports betting is a game of knowledge was considered by the Supreme Court in the case of Geeta Rani v. Union of India and Ors. If the ruling determines that sports betting is a game of skill, it is exempt from most gaming laws and can be filed in many states in India that accept exemptions for games of skill.

Despite the above acts that declare gambling illegal, there are offshore gambling sites that offer internet access to Indian citizens and accept bets from India. in violation of the Information Technology Act, 2000 and the Foreign Exchange Management Act, 1999. they do so.

Indian Online Gambling

Governments around the world vary the regulation of gambling as a permitted and regulated activity, taking into account social, moral, ethical and religious factors. However, lotteries and horse racing, as well as other “games of knowledge” continued to a limited extent. On the other hand, countries control gambling and use it to generate tax revenue and reduce tourism.

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But the Internet has disrupted this process by breaking down legal barriers, and now players and organizers of work can use legal arbitrage to bet freely, change currencies locally or internationally, transfer money digitally to across borders, even for money. change, all in real time.

Legal and political governance challenges present themselves in the form of conflicting goals and appropriate solutions, from imminent danger to abandonment of power. Although on the other hand, anti-money laundering (AML) and guaranteeing players (know your customer) rules must be strictly followed, any legalization can also lead to the reduction of people and the economy around additional social costs. Problem gamblers and new addicts can harm society in terms of crime and bankruptcy costs, while issues related to the deterioration of quality of life and social conditions can present serious problems for the law. any gambling for economic purposes by the government. The 276th Law Commission Report discusses these issues in detail.

The ban on internet gambling/gaming has led to the establishment of Indian online betting sites in other countries with little or no ban. Despite restrictions on online gambling in India, Indians continue to play online. A complete ban cannot be imposed in the virtual world, so despite the restrictions, online gambling will continue to be popular among Indians. Therefore, it is important to create a properly regulated gambling environment. The introduction of policies and standards related to online gambling also paves the way to protect its citizens by preventing gambling under the age of minors, controlling the outflow and circulation of people’s money blacks, maintaining a responsible environment/sports rules and ensuring transparency in the market. In addition, the revenue generated by the regulation and taxation of betting and gambling can be a good source of income, which can also be used for social welfare.

A study conducted by KPMG India in September 2019 projects the Indian online gaming industry to be a Rs 250.3 billion industry. India has about 1.5 billion in lost revenue every year because there is no regulation or taxation for online gambling. It is time to face conflicting goals to maximize the public good. Since a complete ban on Internet gambling is not possible, effective regulation remains the only viable option. India can learn from the experience of several countries and regions that have regulated online gambling in ever-evolving forms with great success. Especially in the post-Covid recovery phase where some drivers

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