Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, using 18 unique games. Since that time more than 1,400 websites, largely domiciled in small Caribbean islands, have given rise to an industry that grosses around $3 billion a year. In reality no business on the Internet earns more revenue than online gaming. Out of the estimated 14.5 million on line gamblers, almost 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a credit card may set up an offshore currency account with a gaming site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or combine a virtual casino to play slot machines, blackjack, blackjack, blackjack etc.. Companies like Flutter and Betmart accept stakes on anything from who’s going to win the Nobel Prize to if Madonna is getting a divorce or not. Bets can vary from a nickel to tens of thousands of dollars and based on if you win or lose the amount is automatically corrected to your accounts. The final balance can then be mailed to you or abandoned for future bets.

The legislation concerning online gaming in India has to be understood within the nation’s socio-cultural context. At the start, gaming, though not entirely prohibited in India, doesn’t get state psychologist by policy makers. The Indian organized gaming market is estimated to be worth around US$8 billion. While strict laws have assessed that the proliferation of casinos along with higher street gaming centers as in many other countries, barring the state of Goa the lottery business remains the very post popular form of betting.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are dispersed at the federal as well as the state levels. Betting features in List II of the Constitution of India, this suggests that the state authorities have the ability to enact legislation to be able to regulate gambling in the respective countries. Thus, there’s not any single law regulating gambling in the whole nation. Various countries have different laws governing gambling along with the legislation which have an application throughout the country. While some states have prohibited lotteries, other states allow state authorities lotteries marketed and distributed in additional lottery playing and encouraging states through private entities.

Regulation of gambling

The courts have defined betting as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game might be regarded as gambling if the element of chance or luck predominates in deciding its own outcome. Because of this, Indian courts have held that betting on horse racing and a few card games aren’t gambling. The best to undertake the work of gaming and lotteries isn’t thought of as a basic right protected by the Constitution of India. It might nevertheless be pointed out that the state government run lotteries make substantial contributions to the state exchequer of many state governments and the Union authorities, and hence there’s a resistance to finish prohibition.

The following legislation is pertinent to gaming:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for maintaining of a ‘common gaming house’. This Act also authorises the state governments to enact laws to govern public gaming in their respective jurisdictions. The penal legislations in various states are amended in accordance with their policy on gaming. But this legislation does not have any direct impact on online gambling unless a broad interpretation is given to the definition of common gaming house so as to incorporate virtual forums too.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella law which governs all commercial contracts in India. Under the ICA, a wagering contract would be the one which can’t be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games also have held to be wagering contracts and consequently void and unenforceable. While a wagering contract is not prohibited, it can’t be enforced in a court of law enforcement. Thus, the courts won’t entertain any cause of action that arises from a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for coordinating lotteries in the nation. Under this Act, the state governments are authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries should be conducted and prescribes punishment in the event of breach of its own supply. Lotteries not authorized by the country have been made an offence under the Indian Penal Code. Several non-lottery playing countries, such as Gujarat and Uttar Pradesh, have banned the selling of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with maintaining lottery office. It states that anyone keeps any office or place for the purpose of drawing any lottery maybe not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term that might extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to send any goods, or to do or forbear doing anything for the benefit of any person, on any occasion or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gaming

The law related to betting can also be applicable to online gambling. All gaming contracts are considered to be wagering contracts and it is not feasible to enforce such contracts under the ICA, detailed above.

As pointed out before, the internet lottery has become the most popular kind of internet gaming in India. Most firms marketing and distributing or running state government-sponsored lotteries through the internet are not allowed to sell their services at the states that prohibited lotteries. Typically, these entrepreneurs and vendors confine their online services to customers who are residents of the countries where a lottery is tolerable. Regardless of the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a shield) seek an undertaking from their consumers concerning their own residence.

There have been instances where one state has banned the lottery of different nations, including online lotteries. In a current case, the Karnatka High Court upheld the decision of the Karnataka government to create itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, led the closure of their terminals and kiosks selling the online lotteries.

Enforcement over foreign authorities

If the websites are hosted and managed from outside India, it might be hard for the Indian government to issue any directive to shut them down or prohibit their accessibility with its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign trade laws do not permit remittances outside India for gaming related activity, such as the purchase of lottery tickets, soccer pools and sweepstakes. As a result, a gambling website hosted out India aiming at receiving money from inside India can’t do this through lawful channels.

Conclusion

Online gambling remains a highly regulated sector with apparently limited horizons to develop. While the current regulatory framework makes it difficult for offshore gambling websites to target customers in India, the India-based companies can only distribute and market state-government lotteries online in permitted lands. The pervasive authority with the government to block gambling related websites and the impossibility of enforcing gambling-related contracts further discourage the prospects for the industry.