The current landscape for gambling and betting in India is disconnected and complex. In fact, there is no clear definition of either term in any Indian legislation. Generally, the term ‘gambling’ is understood to mean placing a stake in terms of money or money’s worth on the occurrence of an uncertain future event. Often, gambling is sub-categorised into games of chance, games of skill, and games of both chance and skill.

While games of pure chance are restricted under most state laws, a more lenient view has been taken in terms of games of skill, as well as games involving a predominant element of skill, while also depending to an extent, on chance. This being said, we have, in the recent past, seen certain states such as Telangana restrict this leniency to games of skill alone. Furthermore, laws in Odisha and Assam restrict all forms of gambling, even when playing such a game involves skill, or a preponderance of skill over chance.

The irrefutable reality of gambling laws in India is, therefore, that there is no clarity on what is permitted and what is prohibited, especially given each state’s own set of laws and restrictions. Additionally, it must be noted that most current laws are obsolete in that they only seek to restrict gambling in ‘physical’ premises and do not deal with online gambling. It would appear that as with all other fields, the law is still attempting to catch up to the ever-changing realities of the gaming world.

Legalising betting in India has been suggested time and again, ever since the allegation relating to the IPL spot-fixing in 2013. The question of whether the legislature should consider legalising betting was also discussed by the Supreme Court in the case of Board of Control for Cricket in India versus Cricket Association of Bihar. As a result of this case, the Supreme Court directed the Law Commission of India to study the possibility of legalising betting in India. Consequently, the Law Commission invited all relevant stakeholders to provide their views and suggestions early last year. While the Law Commission’s report is yet to be released, this step did bring to the fore several pressing arguments being made on both sides of the table.

To put it simply, there are two approaches that may be taken for controlling gambling and betting. The first would be to issue an absolute ban on every form of gambling or betting which relies on chance, including any form of sports betting. The second approach would be a via media, where the government recognises that gambling and betting cannot be wiped out in totality, and proceed to regulate it in a manner that causes least harm to the public and the economy.

The intent behind restricting gambling and betting in India has always been to discourage any activity which causes harm to the public, consequently leading to the loss of the common man’s hard-earned money. Such activities are also long suspected of being a primary contributor to the parallel economy that has been steadily growing. Sports betting has also been viewed as corrupting the sanctity of the sport itself, tempting players and coaches to engage in match fixing and further eroding the public’s trust in sports.

While this line of reasoning is undeniably still relevant, one of the key arguments being made in favour of legalising betting is that such practices (more specifically, sports-related betting) are not only existent in India, but are perhaps thriving, despite being outside the folds of extant laws. By putting in place a clear and strict law, which allows for gambling/sports betting, albeit with specific conditions, several positive results may be achieved, including earning greater revenues for the government, employment opportunities and reduced frauds, to name a few.

Another line of argument that may be made is that sports betting at least is, in fact, a game of skill, and should therefore, be permitted. To draw an analogy, wagers on horse racing have been permitted in India for some time, with the principal reason being that betting on horse racing is a matter of skill, where a patron has to take in to consideration the jockey, the horse, conditions of the turf, and other external factors. A similar position can be taken for betting on cricket where a patron betting has to take into consideration the skills and form of players, condition of the pitch and several other external factors.

A recent order of the Punjab and Haryana High Court adds further weight to this argument, as it held that fantasy sports are to be considered as games of skill and must not accordingly be subsumed within the ambit of gambling per se.

Therefore, the need of the hour, undoubtedly, is that a new central law be introduced, which controls this otherwise ill-regulated sector. This regulation should identify clearly what constitutes gambling, lotteries, sports betting and casual gaming, and further specify which of these activities are prohibited, and which of these are permitted subject to the conditions laid down in the legislation. Another suggestion that has emerged from the discussions on legalising betting is that of establishing an independent regulator which will consider applications for licenses for betting and be responsible for enforcement of the law in question. Given that this will be a newly-drafted legislation, it can surely take into account not only all existing forms of betting and gambling, but also those which may arise in the conceivable future.

However, should the government choose not to take any steps to regulate betting, it would be implicitly agreeing to allow unscrupulous practices to go unchecked.

(Views expressed are personal)

Sajai Singh, Partner, J. Sagar Associates
Sajai Singh, Partner, J. Sagar Associates

Sajai is a transactional lawyer with more than 25 years of experience representing a wide variety of industries, businesses and sectors funnel investments into India. He is the Chair of the firm’s Corporate Commercial Practice.His practice focuses primarily on mergers, acquisitions, joint ventures, strategic alliances, restructurings and financings (whether debt or equity), with particular emphasis on cross-border transactions.

<b>Sherill Pal, Senior Associate, J Sagar Associates</b>
Sherill Pal, Senior Associate, J Sagar Associates

Sherill focuses on Corporate Commercial, Venture Capital & Private Equity, and Information Technology, Joint Ventures, Mergers & Acquisitions. She advises domestic and international clients on foreign exchange regulations and general corporate laws in India, and has been involved in conducting legal due diligences, drafting, reviewing and negotiating contracts and transaction documents. Sherill also advises on various areas of Information Technology Law including outsourcing, data protection and e-commerce issues.

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