Introduction

Betting is prevalent in almost all the sports in the world, with football being the most popular in the betting fraternity. The concept of betting in sports is simple, you predict the winning and losing side of a match ahead of the game with confidence as per your analysis by putting money on the table against a single person or a group of persons, the person whose prediction is correct takes all the money from both the parties. There are various types of betters, and the amount of money a person puts on a bet varies from one range to another. Bets can be placed on any kind of game be it indoor or outdoor and also games like the casino or any game that demands skill to be played.

It is legal in various parts of the world with the largest market being in the UK. The legalization has raised a few questions over the integrity of the result of sports, the category of athletes who are affected in this category are the college athletes who are the easy target of corruption since they are not paid as compared to other athletes in the big leagues. 

In this article, we would be discussing the laws about betting/gambling in the world and India and along with that, we would be discussing the legality of gambling and betting from different perspectives.

Statistics

There are 1.8 trillion dollars in illegal wagers in the entire world as stated in the European Business Review, and more than 80%of bets are placed there, these unregulated markets and illegal betting websites. In the entire US, alone sports wagers are expected to reach between 50 to 150 billion dollars as stated in Bloomberg Economic News.

The legal sports industry in India is estimated to be worth over 2 billion dollars and is projected to be worth 112 billion dollars for the next 4 years as estimated by the economic times

Now the question that would arise in everybody’s mind is what is driving this industry? More than 140 million Indians play online games of betting regularly as stated by the games forum, this number rises to 370 million during the IPL season in India as per reports released by BCCI. Indians are obsessed with cricket and the online betting platforms for cricket so it is becoming difficult to state that as illegal.

Legality in India

Legislations governing Indian sports are either very old-fashioned or do not exist, whatever exists in the old-fashioned form are not even adequately regulated. As of now, there has not been any law dedicated exclusively to gambling. But according to statistics, it has been made clear that Indians love gambling According to a report published by the International Centre for Sports Security (ICSS), the betting market in India might be worth over US$130 billion. There is a major distinction between what is a game of skill and a game of chance and the legality of betting is allowed accordingly by the Indian courts. Particular states have legalized gambling as we have discussed above and games in which gambling is allowed are also discussed.

In India, The Public Gambling Act of 1857 prohibits the running of gambling acts throughout the country, however, each state has the authority to formulate its laws and enforce them as stated in the 7th Schedule Entry 34 List 2 of the Constitution. As a result of providing authority to the state, casinos can be found in states like Goa, Sikkim, and Daman. Currently, Goa and Sikkim are the only two states that have legalized betting in the sports industry.

But in the case of Manoranjithan Manamyil Mandram v. State of Tamil Nadu (2005), it was clearly distinguished between the games that require actual skill and hard work vs the games that are based on luck, which are generally illegal. In games like casinos, there is a skill and luck factor, but the majority depends on the skill factor hence, it has been legalized for betting. 

Game of skill refers to the games that require previous knowledge and understanding of the rules and regulations. They are legal in most Indian States.

Games of chance that are mostly dependent on luck factors like – rolling of dice, Random Number based games are considered illegal according to the Public Gaming Act.

Why are there different gambling laws in India?

Now, the common question that arises in everyone’s mind is why there are different gambling laws in different states of our country. This is because it is allowed by our constitution to have different gambling laws. The Constitution of India explicitly gives states the right to legislate and make policies related to “gambling and betting”. It is quite clear in the Seventh Schedule Entry 34 List II which says states could legalize gambling should they choose to do so.

Every state government is free to enact as well as legislate gambling laws at their discretion. Also, the Central Government cannot intervene in any of the state proceedings.

To date, most Indian states have only made laws against gambling, while 13 states have legalized lottery, and two states (Goa and Sikkim) have legalized many other forms of gambling. With a country as diverse as India and 29 separate states, you can only imagine the variance in gambling laws.

Let’s take a look at a few of the examples-

Legal Casino Gambling in Goa

Goa has made two amendments to the Goa and Daman and Diu Gambling Act. 1976 to legalize certain forms of gambling. The relevant sections are stated below-

[13A. Authorized Game. – (1) Notwithstanding anything contained in this Act, the Government may authorize any game of electronic amusement/slot machines in Five Star Hotels 27 {and such table games and gaming on board in vessels offshore as may be notified} subject to such conditions, including payment of such recurring and non-recurring fees, as may be prescribed.

Inserted by the Amendment Act 13 of 1996.

As of October 2011, there are seven land-based casinos and several offshore casinos that operate legally in Goa.

Legal Gambling in Sikkim

Sikkim is a second Indian State that has legalized gambling.

1) The Sikkim Casino Games (Control and Tax Rules), 2002 gives the Sikkim Government the authority to grant licenses to individuals and businesses interested in operating casinos.

2) The Sikkim Regulation of Gambling (Amendment) Act, 2005 gives the Sikkim Government the authority to authorize gambling on certain days and to make specific gambling houses legal at their discretion by way of a license.

Sikkim also became the first Indian State to legalize internet gambling.

The state of Sikkim has begun taking applications to license online gambling where the servers are located within the state. This includes casino gambling, lottery, and sports betting.

Many believe that once these licensed sports betting sites come online that players located in states where there are no gambling laws will be able to use them legally. This has caused popular online gambling sites such as William Hill and Betfair to eye India as the next major market to expand to.

This, however, has a major challenge – foreign investments involving gambling are illegal under Indian law.

Legal Gambling in Karnataka

A recent judgment, delivered by the Karnataka High Court struck down major portions of the Karnataka Police Amendment Act, 2021 which banned online gaming and skill-based gaming platforms.

The Karnataka High Court struck down the amendments to the Karnataka Police Act on three major grounds:

1) Violation of fundamental rights of trade and commerce ( Article 19 of the Indian Constitution), liberty and privacy (Article 21 of the Indian Constitution), speech and expression (Article 19). Being manifestly arbitrary and irrational insofar as it did not distinguish between two different categories of games, i.e. games of skill and chance.

2) Lack of legislative competence of State legislatures to enact laws on online skill-based games.

-The court also held that the State government provided no evidence or data on whether a sweeping ban was justified and neither constituted a committee of experts to study the issue.

-The court also held that playing online games could help in building the character of an individual and enjoying online gaming could also fall within the contours of freedom of expression and the right to liberty and privacy guaranteed under the constitution.

3) The court also opined that regulation of online games may be a better and proportionate solution rather than an outright ban, and left it open for the State government to come up with new legislation dealing with betting and gambling following the provisions of the constitution.

What was the Karnataka Police (Amendment) Act, of 2021?

The law was introduced by the Karnataka government to ban online gambling and skill-based gaming platforms. The games banned were games that involved any wagering or risking of money on an uncertain event for example online rummy, poker, and fantasy sports.

Which are the Other States Where Such Laws Were Struck Down?

-Apart from Karnataka, a similar law introduced by the Tamil Nadu government was struck down by the Madras High Court in August 2021.

-In September 2021, the Kerala High Court also quashed a notification issued by the State government specifically banning the game of online rummy when played for stakes.

The legal standing of instances of gambling in cricket 

Cricket is a very popular sport in India, it has a very high viewership in our country, amongst all tournaments the IPL (Indian Premier League) is the most popular amongst Indians is the Indian Premier League, in the previous decade there were so many controversies surrounding this tournament and the betting issues involved in these tournaments, which raised a lot questions over its integrity.

Following the 2013 IPL match-fixing scandal, the Lodha Commission was appointed by the Supreme Court to investigate the matter of legalizing cricket betting. In July 2015, the Patiala High Court acquitted all 36 people accused in the spot-fixing scandal. Justice Neena Badal ruled that betting on cricket is not illegal and therefore no action can be taken for betting on cricket matches.

In August 2017, the Delhi Police filed an appeal against the release order. In 2016, a resolution issued by a bench of the Supreme Court also recommended: “the recommendation to legalize betting includes the enactment of a law which may be reviewed by the Law Commission and the government for such action as it deems fit”.

 In June 2018, the Law Commission submitted a recommendation to the government favouring the legalization of betting in India under strict control to curb money laundering. The commission concluded that since it is almost impossible to completely ban cricket betting in India; regulating cricket betting and gambling under strict laws is the right course of action.

The Law Commission suggested that under Article 249 or 252 of the Constitution, the government has the power to formulate laws to regulate gambling. If legislation is made under Article 252, states that did not agree could also adopt it. This would help states bypass years of red tape.

Although we feel that India is moving towards legalizing cricket betting, it remains to be seen when exactly the government will take a concrete decision.

In India, betting on the IPL over the Internet is legally permitted for persons above 18 years of age. Land betting and the operation of conventional games of chance are prohibited in some states. However, there is no express legislation governing internet sports betting. As the laws governing betting sites are still ambiguous, online gambling or betting is still permissible. The sports tournament of the Indian Premier League is the most popular in the country, it attracts a lot of viewership from various parts of the country so here we would be discussing the legality of the betting industry of the Indian Premier League. Keeping such high viewership and love for the game of Cricket in the country it is legal to bet for teams or their players in the tournament as it has been stated above that no concrete laws have been made for sports betting through platforms like Dream 11, which are endorsed by big names playing in the tournament and while watching the tournament live their ads are run multiple times during the timeouts between the matches.

Some organizations can take advantage of this grey area of the law and run untrustworthy online betting sites to defraud people and steal personal information. To avoid falling into this trap and stay on the right side of the law, here are some things to look out for when it comes to online betting sites. 

Make sure the site accepts Indian currency: The Federal Foreign Exchange Administration Act prohibits the exchange of Indian rupees for any other currency outside of an exchange office or bank. Consequently, online bookies need to allow Indian currency as a betting payment option.

Read Your State’s Gambling Laws: It’s also a good idea to research your state’s gambling laws before you start betting online. Online betting is illegal in some states, such as Telangana in India, but is legal in Sikkim.

Data security and tax: Some betting sites require personal information such as PAN cards for verification. However, no one will have access to it, including online sportsbooks or the government. But if you win any money through online betting, you have to pay taxes. You should report the amount earned from internet betting when you file your taxes. This helps prove that the site is legitimate and legally allowed to operate in your region.

Laws/Acts that regulate the sports betting industry in India

Despite gambling being a grey area in India, there are many legislations in place. We will look closely at the important ones. The following are a few examples:

● The Public Gambling Act, of 1867

● Payment and Settlement Act, 2007

● Assam Gaming and Betting Act, 1970

● Bombay Prevention of Gambling Act, 1887

● Goa, Daman and Diu Public Gambling Act, 1976

● Karnataka Police Act, 1963

● Madhya Pradesh (C.P.) Public Gambling Act,1867

● Madhya Bharat Gambling Act, 1949

● Orissa Prevention of Gambling Act, 1955

● Public Gambling Act, 1867 Constitution of India, Seventh Schedule, List II, Entry No. 34

● Punjab Public Gambling Act, 1867

● Sikkim Online Gaming (Regulation) Act, 2008

● Tamil Nadu City Police Gaming Rules, 1949

● Tamil Nadu Gaming Act, 1930

● The Andhra Pradesh Gaming Act, 1974

● The Andhra Pradesh Gaming Rules, 1976

● The Delhi Public Gambling Act, 1955

● The J. & K. Public Gambling Act, 1977

● The Kerala Gambling Act, 1960

● The Meghalaya Prevention of Gambling Act, 1970

● The Pondicherry Gaming Act, 1965

● The Rajasthan Public Gambling Ordinance, 1949

● The West Bengal Gambling and Prize Competitions Act, 1957

● The West Bengal Gambling Rules, 1958

● Uttar Pradesh Public Gambling Act,1961

Fantasy Sports vs. Daily Fantasy Sports (DFS) vs. Traditional Sports Betting

Before we continue, it is important to clarify the terms fantasy sports, daily fantasy sports, and traditional sports betting. Both fantasy sports and traditional sports betting are popular forms of gambling based on sports results, but there are key differences. First, fantasy sports betting is legal. And in fantasy sports, your opponents are other human players, rather than bookies as in traditional betting. In fantasy sports, a group of human players called a league, selects from real athletes to form imaginary teams. Based on each athlete’s performance throughout the season, points are awarded to the team. To win, your team must score the most points throughout an entire season, which usually lasts several months.

A popular subset of fantasy sports is daily fantasy sports (DFS). DFS lasts one day instead of a season. You draft your players in the morning and later in the afternoon or evening you know who won when the games are completed. While leagues in regular fantasy sports are usually made up of friends, with DFS you compete against random people you match with. The winning pot can reach millions of dollars.

While fantasy sports were legal, daily fantasy sports operated in more of a grey area. Fantasy sports were legalized in 2006 because it is primarily an activity between friends, not betting money, and is a game of skill instead of chance. Furthermore, players will find out whether they win or lose within months – not minutes or even seconds as is possible in traditional mode.

Key takeaways from Gambling Laws in India

– Gambling is legal via license in places such as – Goa, Sikkim, Nagaland, Daman, and Diu

– Gambling is illegal based on the law in Telangana, Maharashtra, and Andhra Pradesh

– Horse Racing has been made legal throughout India

– Lotteries are legal in Kerala, Sikkim, Goa, Madhya Pradesh, Arunachal Pradesh, Manipur, Mizoram, West Bengal, Meghalaya, and Nagaland,

– Games of skill are illegal in Telangana and Arunachal, according to the Telangana State Gambling Act of 1974.

– The Bombay Prevention of Gambling Act, of 1887 banned gambling in Maharashtra

– E-Gaming is legal in Sikkim and Nagaland.

Other negative consequences

An outright ban may not entirely curtail the playing of such online games, with or without stakes. A strict ban may not entirely reduce the negative effect of playing such games, with or without stakes. Telangana, which was the first State to ban online games for stakes in 2017 has seen a huge reduction in illegal or underground online gambling apps. Most of them originate from China or other foreign countries and accept payments from players through dummy companies or hawala channels. Both the Enforcement Directorate (ED) and local cyber crime authorities have tried to crack down on such apps but with limited success. Shifting users to grey or illegal offshore online gaming apps not only results in loss of tax revenue for the State and job opportunities for locals but results in users being unable to avail remedies for any unfair behavior or refusal to pay out winnings.

Legality in other countries

The legality of sports betting, which is a form of gambling is a complex issue in multiple nations. Sports Betting is currently legal in many parts of the world including Australia and Europe with the largest market being in the United Kingdom, despite earlier being illegal this market has flourished tremendously as we can read from the statistics above, even though today the countries where they are considered illegal, they still flourish in those countries.

Future of the industry

The betting industry in India Fantasy or Traditional is expected to keep rising in popularity, now with the increase in the number of people entering the industry and thriving in this market. If this industry becomes more regulated and organized, this could reach new heights opening various opportunities for multiple people. In addition to that, it will help the betters of the common masses to enjoy a safe and successful betting experience.

Sources

Is Sports Betting Legal? – Is Betting On Sports Legal? (legalsportsbetting.com)

The Implication of Legalized Sports Betting (legalities. in)

A Guide to the Legality of Online Sports Betting in India (theindiasite.com)

Bet on it? – The Rise of Sports Betting in India – Making Smalltalk (smallcase.com)

Gambling Laws In India Full Guide (sportsbetting.net.in)

Implications of Legal Sports Betting | Toptal

Is Online Betting On The IPL Legal Or Illegal In India? (thecricketlounge.com)