GAMING OR GAMBLING – Indian legal position

Contemporary Developments

This is a part of 3 part post on gaming laws by our intern who is passionate about this topic. This is part 2 of a 3 part series.

Part 1 of 3

North

Uttar Pradesh

Uttar Pradesh is also planning to introduce a law on online gaming and the draft bill for the same has been presented but is yet to be approved. The law commission of the state has already prepared a draft bill that penalizes any act of gambling, including online gambling and various forms of wagering with up to 3 years of imprisonment and they are also non-bailable offenses. The bill will be soon set into motion as the Uttar Pradesh Government swiftly wants to tackle the growing trend of online gaming and people losing money in it. Therefore, as opposed to the federal Gambling Act of 1867 that is not technology sustainable and also only penalizes the act with a fine of Rs. 1000 and imprisonment up to 1 year, the UP Government aims to make more robust changes.

South

Karnataka

The most recent development that has caught the eye of legal fraternity and gaming community equally is the passing of the Karnataka Police (Amendment) Act, 2021 to amend the Karnataka Police Act, 1963, which prohibited and criminalized the activities of offering and playing online games, by risking money or otherwise in the form of wagering and betting (Section 2b of the Bill, 2021). This law was similar to the one passed in Tamil Nadu. The discourse that follows Karnataka High Court’s decision in All India Gaming Federation v. State of Karnataka[1] where certain provisions of the Karnataka Police (Amendment) Act, 2021 has been declared unconstitutional. The Hon’ble court said that it was arbitrary in nature and did not distinguish between games of chance and that of skill, thus violative of Article 14 and 19(1)(g) of the Constitution. The court relied on the judicial precedence set up in Varun Gumber v. Union Territory of Chandigarh[2] and Dr. K. R. Lakshmanan v. State of Tamil Nadu & Anr.[3]

Tamil Nadu

In February 2021, the State of Tamil Nadu passed the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 to amend its Tamil Nadu Gaming Act, 1930 by the inclusion of ‘Cyberspace’ in the definition of ‘Common Gaming House’ and ‘Computer Systems or Computer Network’ in the definition of ‘Instruments of Gaming’ under Section 3 of the Tamil Nadu Gaming Act, 1930. The amendment also separately included Section 3-A in the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, that defined wagering or betting in cyberspace.[4] The legislation does not directly penalise games of skill but provides an extremely narrow escape under Section 11 of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, as it penalizes games of skill that are played for a wager, bet, or any other stake. Thereby, it strategically eliminates even fantasy games. The Madras High Court in the case of Junglee Games India Private Limited v. State of Tamil Nadu & Ors.[5] in which it was to be decided whether ‘rummy’ is a game of skill or that of luck and the validity of the Tamil Nadu Amendment Act was checked determined that rummy is predominantly a game of skill and the Tamil Nadu Amendment Act criminalizing it was unconstitutional thus void. The court decided to rely on the Apex Court’s decision inState of Andhra Pradesh v. K. Satyanarayana[6] and Dr. K. R. Lakshmanan v. State of Tamil Nadu & Anr.[7], that Rummy even though both a game of chance and skill is predominantly a game of skill. Furthermore, the court even held that this Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 is also ultra vires the Constitution as it is (a) arbitrary, as it does not distinguish between a game of chance and skill and is thus violative of Article 14 of the Constitution and (b) it is also violative of Article 19(1)(g) of the Constitution.

West

Rajasthan

The Apex Court in Avinash Mehrotra v. State of Rajasthan & Ors.[8] (Dream 11 case) decided based on Test of Skill that fantasy sports such as Dream 11 involve skill and are not a mere game of chance because the result is dependent upon the decision-making of the gamer. It takes skill to understand and make a team consider real-time factors of the game such as assessment of record of the players, the team composition, the form of the player, the pitch, and other such things.

Gujarat

Deciding a petition[9] filed in the Gujarat High Court, it was held that online gambling was punishable under the Gujarat Prevention of Gambling Act 1887. Therefore, the court directed the State to incorporate online gambling within the purview of the act.

East

Odisha

Tic Toc Skill Games Pvt. Ltd.[10] has filed a writ petition in the Odisha High Court challenging the Odisha Prevention of Gambling Act, 1955 as unconstitutional because it imposes a blanket ban on all kinds of gaming activities. Similar to the Tamil Nadu Amendment the present-day Odisha laws also impose a blanket ban on all games without differentiating between even on games of skill and games of chance.

Nagaland

Nagaland Government has also started issuing online skill games license under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016. The 2016 Act applies to all games of skill where there is a preponderance of skill over chance even though they may include placing wagers or bets. It also exclusively prohibits and penalises gambling, which includes games involving wagering or betting dependent on chance and not skill. It was done by the Nagaland Government to support the growing economy that revolves around online gaming. This legislation was welcomed by the masses and online game companies even though it is regulated employing a license model. However, the law continues to penalise games of chance with a fine of Rs. 20 Lakhs in the first instance and if gambling/wagering/betting continues then with an imprisonment of 6 months.

Union Government

The GST Council has formed a committee for considering a common tax regime for online gaming. It seeks to remove differences between games of skill and that of chance from a taxation point of view.

Part 3 of 3


[1] WP No. 18703/2021.

[2] CWP No. 7559 of 2017.

[3] 1996 AIR 1153.

[4] Section 3-A, Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021:  “common gaming-house” means any house, room, tent, enclosure, vehicle, vessel, cyber cafe or any place whatsoever in which instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, room, tent, enclosure, vehicle, vessel, cyber cafe or place, whether free of cost or by way of charge for the use of instruments of gaming or of the house, room, tent, enclosure, vehicle, vessel, cyber cafe or the place; and includes any house, room, tent, enclosure, vehicle, vessel, cyber cafe or place opened, kept or used or permitted to be opened, kept or used for the purpose of gaming.

[5] 2021 SCC OnLine Mad 2762.

[6] AIR 1957 SC 628.

[7] 1996 AIR 1153.

[8] SLP (C) No. 18478/2020.

[9] Amit M. Nair v. State of Gujarat, R/WP (PIL) No. 146 of 2020.

[10] Tic Tok Skill Games v. State of Odisha, WP 34338/2021.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: