Gambling in India and the legal framework

Gambling in India and the legal framework

Indians are not just tech-savvy. They are active participants in the digital world. Since online Casinos in India are much cheaper than traditional casino venues, it is not surprising to witness numerous gambling enthusiasts get revolved around online gambling lately.

Due to India’s increasing pandemic, many Indians have turned to gamble for their livelihood. To meet their financial and social needs, they have turned to gamble prize money. These practices have resulted in an increase in money laundering in India and the availability of black money.

Part II of the State List contains information about gambling and betting. The state government with full control over the industry can also create their state-specific laws. This is evident in the 1976 Public Gambling Act, which was adopted by most states.

Indian gambling industry overview

There is a widespread perception that Indian gaming is illegal or not regulated. This is false. India’s gaming industry is valued at US$60 billion. This includes both regulated and unregulated gaming. These are the main categories of India’s gaming industry:

  • Lotteries
  • horse racing;
  • Prize competitions
  • Sports betting
  • Games of skill;
  • Games of chance

The legal framework of gambling depends on the choice made by the gamblers in regards to the above-listed categories. For instance, while games of skill are accepted and allowed in the country, games of chance are largely prohibited. The games of skill are defined as games where there’s a preponderance of skill over chance. Examples include chess, bridge, poker, virtual sports, and virtual games. The games of chance are roulettes, slots, and similar category games.

However, some states, such as Goa, have made exceptions in their gambling laws that allow for authorized gaming. In Goa, licenses are issued for gaming of chance in casinos that are both on- and off-shore. One of the most popular websites where many of the Indian players enjoy both games of skill and games of chance is – 9winz offering the experience in the national currency of India (INR). Since the casino is offshore, the existing regulatory framework does not prohibit it from delivering the services to Indian gamblers. Hence, many casinos like 9winz represent attractive choices for roulette, poker, slot, or e-gaming enthusiasts.

History of the legality of gambling in India

Before the Constitution of India was promulgated, Indian gambling was regulated by the Public Gambling Act 1857. The British Acts 1845 and 1853 attempted to make wagering contracts ineligible, but they repealed the Unlawful Games Act 15041 which made games of skill like tennis and bowling illegal.

Before the Constitution was promulgated, the authorisation for horse racing sports and betting in the country was authorised by the Bombay Presidency in accordance with the Bombay Race-Courses Licensing Law 1912. Similar to the Bengal Presidency Act VIII of 1867 permitted subscriptions, prizes, and stakes on horse races.

The British government in India also used lotteries to fund the development of towns. Public gambling was banned in India under British rule before Independence. However, horse racing and lotteries were widely permitted.

The issues related to the gaming industry were divided after the promulgation of the Constitution of India. Gambling and betting were included in Entry 34 of The State List (i.e. List II of Schedule Seventh). This means that the only state legislature can make gambling and betting laws. The Union List entry 40, List 1 of Lotteries, states that the Parliament of India has the authority to make laws regarding lotteries. The State List also gives the power to the legislature to pass laws regarding taxation on gambling and betting.

The Constitution of India was enacted and most states adopted its principles. However, there were some amendments. Each state has its own gambling law.

A person in India who is connected to the internet can place bets through a foreign-owned website. These activities are not covered by Indian law. Online gaming/gambling via a server outside India is not covered by any law. However, they can be controlled through the medium internet compliances and cyber security legal framework due to diligence requirements under the Information Technology Act 2000. These regulations restrict outgoings and foreign currency earnings, as well as strict enforcement of anti-money laundering laws.

So what exactly is the legal status of gambling in India?

India’s gambling laws are still unclear and confusing. The judiciary has tried again through various case laws to clarify the matter and clear up the confusion. The recent technological advances have opened the sector up and allowed people to participate in activities within the Indian gambling laws. The courts of India are still reviewing these activities and testing them. To avoid unnecessary legal consequences, it is recommended that anyone who plans to engage in any form of gambling in India seeks sound legal advice.