10 Oct 2010

Gambling Laws in India: An Introduction

Legal Environment: Indian courts and legislations have always considered gambling to be a pernicious and immoral activity. The Courts have on various occasions held that gambling and lotteries of any form causes grave economic harm to the public which leads to the loss of the common mans hard-earned money. Thus, the attitude of the judiciary and law-makers has been to discourage people from indulging in games of chance and probability.

On the other hand the various State governments are blatantly promoting/operating lotteries, horse-racing, charitable lotteries etc.

Important Statutes: The various Central and State legislations dealing with public gambling display a marked feature of excluding lotteries from their ambit. Thus while gambling and betting is banned in India (barring a few exceptions), most state governments either conduct lotteries or authorise private parties to conduct lotteries.

Constitutional provisions: As per the seventh Schedule of the Constitution of India (See entry no. 40 of List I and entry nos. 34 and 62 of List II), the Union government is empowered to make laws to regulate the conduct of lotteries, while the State Governments have been given the responsibility of authorising/conducting the lotteries and making laws on betting and gambling. The following are important laws relating to gambling in India.

The following are the various laws which regulate/restrict gambling in India:

  • The Public Gambling Act, 1867: This Central legislation provides for the punishment of public gambling.
  • The Lotteries (Regulation) Act, 1998: This Central Legislation lays down guidelines and restrictions in conducting lotteries.
  • Section 294-A of the Indian Penal Code, 1860: This Section lays down punishment for keeping a lottery office without the authorisation of the State government.
  • Section 30 of the Indian Contract Act, 1872: This Section prevents any person from bringing a suit for recovery of any winnings won by way of a wager. (An agreement which is based on a future uncertain event wherein the loss of one person is the gain of the other). Thus no claim for recovery of any winnings in lotteries, gambling or betting can be brought before the court. The position of law in India is such that it may be perfectly legal to buy a lottery ticket, but the winner of such a lottery will have no remedy against the lottery agency if the said agency refuses to pay the winnings. This same position was reiterated in Subash Kumar Manwani v. State of M.P. (AIR 200 MP 109).
  • State legislations: Various state legislations like The Bengal Public Gambling Act, 1867; The Bombay Prevention of Gambling Act, 1887; The Delhi Public Gambling Act, 1955: The Madras Gambling Act etc. have been created. These Acts are more or less similar as the object of these Acts is to ban/restrict gambling.

States that allow gambling in various forms (the exceptions): Sikkim and Goa are the only two states in India which currently permit gambling (other than exceptions created by certain states for horse-racing, dog-racing and lotteries.)

Goa: In Goa an amendment created to the Goa, Daman and Diu Public Gambling Act, 1976 allows casinos to be set up only at five star hotels or offshore vessels with the prior permission of the government. (See Section 13-A of the above mentioned Act).

Sikkim: In Sikkim The Sikkim Casino Games (Control and Tax Rules), 2002 gives discretion to the Government of Sikkim to grant licences to individuals/establishments for setting up casinos. The Sikkim Regulation of Gambling (Amendment) Act, 2005 also gives the government discretionary power to authorise gambling either on certain days or to certain gambling houses by grant of licence.

Provisions for online gambling: There is no express provision in India either banning or allowing online gambling. However the Sikkim government has recently introduced the Sikkim Online Gaming (Regulation) Act, 2008 and subsequently by the amended Sikkim Online Gaming (Regulation) Rules, 2009 invited applications for licences to set-up online gaming websites (for gambling and also betting on games like cricket, football, tennis etc.) with the servers based in Sikkim. It is unclear whether Indian residents in other states would be able to avail the services of these websites in the absence of any law prohibiting online gambling.

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