22 May 2019

PIL filed in Delhi HC to stop online poker & betting websites

Judge Hammer

Exclusive A Public Interest Litigation (PIL) has been filed by social activist and chartered accountant Avinash Mehrotra in the Delhi High Court seeking directions to the Union Ministry of Information Technology and the Reserve Bank of India (RBI) ‘to bring illegal and illicit online gambling/betting/wagering/gaming to an end.’

Mehrotra in his petition states that the problem of illegal and illicit online gambling is a rising menace that has ruined the lives and financial security of several persons.

He states that several websites are encouraging the country’s working population to part with their hard earned money on games of chance such as poker, teenpatti, sports betting, election betting etc.

The petitioner contends that some of the websites offering such games are based in India while others are based abroad. The websites named in the petition include offshore betting websites such as Betway, BetRally India, 1xBet, Royal Panda, Dafabet etc. and domestic poker websites such as Adda52, PokerStars.in and Khelo365.

The petition contends that ‘these websites seem to encourage the horrible habit of gambling amongst youngsters, and are doing so solely with a view of making large amounts of profits at the cost of these unsuspecting citizens of our great nation.’

It further avers that the popularity of fantasy sports is rising, where unsuspecting players are betting large quantities of money on the individual performance of players.

The petition further submits that while games of skill are exempted from the ambit of gambling under the Public Gambling Act and state laws, in card games such as blackjack, poker, teenpatti the success demands solely on the turn of cards and no skill is involved.

Similarly, it states that sports betting is dependent on the performance of individual players and there is no skill involved on part of the person placing the bet.

The petition also challenges the provisions in the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016, contending that ‘the State Legislature has permitted people to lay waste to their fortune, hard earned money, and possible inheritance, by permitting them to play games of pure chance, under the garb of calling them games of skill.’

Mehrotra states that the Nagaland online skill gaming law cannot have a pan-India operation and that these activities remain illegal in the rest of the country.

The petition also alleges that large sums of money are being placed using foreign currency on offshore betting websites leading to exodus of foreign exchange leaving India, which amounts to a violation of the Foreign Exchange Management Act and rules.

It also points out that many of the online gaming websites do not appropriately deduct tax at source and neither do the players pay taxes on winnings from such websites, leading to loss of tax revenue under the Income Tax Act.

Mehrotra also submits the behavioural and psychological risks associated with gambling, and online gambling/betting in particular.

The petition finally asks for a direction from the Delhi High Court to ask the Union Ministry of Information Technology to ban/prevent online gaming websites under Sections 67 and 69 of the Information Technology Act, 2000.

It also urges the court to issue direction to the RBI to check the exodus of foreign exchange on online gambling websites. It further asks for a direction to the Ministry of Finance to recover taxes due from players and operators as well as prosecution of operators and promoters of online gaming websites.

The matter is scheduled to come up for hearing before a division bench of the Delhi High Court comprising of Chief Justice Rajendra Menon and Justice Anup Bhambhani on 29th May, 2019.

Read more about gambling laws in India.

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