Online Gambling Laws and Punishment in India

Online gambling is betting in casinos and/or sports, similar to usual physical gambling, but this carries out on a virtual platform. Online gambling uses credit cards to place bets instead of cash, and the wins and losses are processed that way. Online gambling can be of different forms, such as poker, betting on horses, slots in a casino, blackjack, roulette, and betting on sports through a virtual medium. Even though the basic concept for gambling remains the same, the physical experience is absent in online gambling, which can be a con for a lot of people who enjoy the glamour of casinos or the adrenaline of cheering in stadiums.

Online Betting, Is It Legal?

Online betting has a very varied legal position across the country, Prior to the central Public Gambling Act of 1867 (hereinafter, The Act), all the states had their own legislation and regulations when it came to gambling. The Act then declared all forms of gambling illegal in India but also demarcated between games of chance and games of skill. This means that betters could place bets on games of skill, but there is still a lot of ambiguity as to what a game of skill is. Cricket does not fall under a game of skill, but lotteries and horse-race betting are still legal. This clearly demonstrates the lack of substantial guidelines to differentiate between game of skill and game of chance.

The Act, however, does not include online gambling as a term. A few states have adopted the Act as their gambling legislations, while a lot of the states still have their own regulations and Sikkim, and Nagaland were the first states to include laws relating to online gambling in their legislations. Additionally, West Bengal, Nagaland and Sikkim allow poker to be played both online and offline after receiving a licence from the state authority along with Goa, which has authorized casinos to carry out gambling.

To answer the question of whether online betting is still legal in India, the answer for now would be yes. There is no law explicitly stating that online gambling is illegal, and even though the Act tries to put a blanket ban on all kinds of gambling, there is not enough substantial material to know what a game of skill is and what is a game of chance to declare online gambling illegal.

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Laws Regarding Online Gambling In India

As already stated, there is a lack of clarity and standardization in the laws across the country when it comes to online gambling. There is only one judgement M/s Gaussian networks Pvt. Ltd. v. Monica Lakhanpal and State of NCT which discussed online gambling and stated the following:

• If a game that involves game of skills is played with stakes, then it does not constitute as gambling
• If the players are attracted to the game just due to prize money, it is considered illegal
• In virtual platforms, any game of skill played for the purpose of gaining money would not be legal, even though it would be legal in physical world.
• Gaming sites cannot join the winning hands as it would promote online gambling

The case then was withdrawn at the final argument of the revision petition, so there is no precedent that it set, or can be referred to anymore. This being said, Telangana was one of the first states that banned online gambling with a legislation in 2017, which was then followed by Kerala, Tamil Nadu, Andhra Pradesh and very recently, Karnataka. It was then brought to notice that the Union government has to block gambling sites and portals for the ban to be properly put in place. This has caused a huge uproar in the community which very regularly operates in virtual gambling and all of these bans have been challenged overtime by rummy and poker portals, and the Madras High Court had to recently scrap the changes brought by the amendments.

Apart from this, the Prevention of Money Laundering Act 2022, Telecom Commercial Communications Customer Preference Regulations 2010, The Prize Competition Act 1955, Foreign Exchange Management Act 1999 and the Cable Television Network Rules 1994 put forth some regulations on the promotion of gambling.

The government has been trying to make a legislation which regulates gambling, as it would not only stop people from losing money but also generate revenue for the economy if it is taxed properly and legally. India being an up and coming market with great potential for gambling, there are quite may foreign investors who would be interested in establish operations in the country.

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Punishment for Illegal Online Gambling in India

In 2018, an online gambling racket was brought down in Delhi, and 12 of the customers of the said racket were then arrested by police officials for violating the state gambling laws. This brings to light the fact that with the increasing use of technology and access to internet, it has become very easy to operate online gambling. With the lack of mention of online gambling in most legislation, there is no such punishment specific to it, just general provision which apply from the aforementioned legislations.