Written by Divya Taneja
Introduction:
The legal landscape surrounding sports betting in India is intricate and multifaceted, governed by a combination of central and state laws. The Constitution of India empowers State Governments to create laws regarding gambling and betting activities, leading to a diverse regulatory framework across different regions. While betting on horse racing is considered legal as a game of skill, other sports betting remains a grey area, lacking clear legislative direction from the Hon'ble Supreme Court of India. The prevalence of sports betting, particularly in cricket, has raised concerns about the need for legislative measures to address dishonest practices in sporting events.
The Law Commission of India has also been involved in examining the possibility of legalizing betting in India. In its 276th Report, the Law Commission recommended that while a complete ban on unlawful betting and gambling should be enforced, regulating these activities effectively remains a more practical approach due to the challenges in enforcing a total prohibition. The Commission suggested that gambling and betting, if allowed, should only be offered by licensed Indian operators and subject to strict regulations, including limits on transactions and stakes linked to PAN and Aadhaar cards.
Sports Betting in India:
Sports betting in India has gained significant popularity, especially with the rise of online platforms and the growing interest of individuals in wagering on sports events. While most forms of gambling are prohibited in India under the Public Gambling Act of 1867, exceptions are made for games of skill and state-regulated lotteries. The legal landscape surrounding sports betting in India has evolved, particularly with the emergence of domestic T20 leagues like the Indian Premier League (IPL) and Pro Kabaddi League (PKL), prompting regulatory bodies to consider legalizing sports betting under certain conditions.
A. Public Gambling Act and Exceptions
The Public Gambling Act of 1867 is a significant legislation that regulates gambling and betting activities in India. Here is an overview of the Act and its exceptions based on the provided sources:
Public Gambling Act, 1867:
- Enacted during the pre-independence era, the Public Gambling Act of 1867 prohibits games of chance and probability, except for lotteries. It is a Centrally enacted law.
- The Act aims to prevent owning, keeping, or being found in a common gaming house, with certain exceptions for games of skill.
Exceptions under the Public Gambling Act:
1. Games of Skill:
   - The Act excludes "games of skill" from its ambit, allowing for activities that involve skill rather than pure chance or luck.
   - Games like chess, sudoku, and other skill-based games are not considered gambling under the Act.
2. Horse Racing:
   - Betting on horse racing is permitted in licensed premises, with licenses issued to Indian turf clubs. The Act recognizes horse racing as a sport primarily dependent on special abilities acquired through training, making betting on horse racing legal.
3. State Laws:
   - Post-independence, most states have enacted laws based on the Central Public Gambling Act of 1867, with Goa and Sikkim legalizing various forms of gambling and betting activities.
   - States like Goa and Sikkim permit the establishment of casinos and other forms of gambling under specific regulations.
4. Lotteries:
   - The Act allows for lotteries as an exception to the general prohibition on games of chance and probability. The Supreme Court of India has clarified the legal status of lotteries as games of chance, not business or trade.
5. Games of Skill for Stakes:
   - The distinction between games of skill and games of chance or skill combined has not been fully adjudicated by the Supreme Court. Games involving skill rather than pure chance may not fall under the Act's prohibition.
These abovementioned exceptions under the Public Gambling Act of 1867 provide a framework for understanding the legal boundaries of gambling and betting activities in India, balancing prohibitions with recognized exceptions based on skill, specific sports like horse racing, and state-specific regulations.
B. FEMA
The Foreign Exchange Management (Current Account Transactions) Rules 2000 (the Current Account Rules) were framed to impose reasonable restrictions for current account transactions. The Current Account Rules provide that transactions included in Schedule I are prohibited. Remittance from lottery winnings, racing or riding, purchase of lottery tickets, football pools, sweepstakes, etc., are included within Schedule I, which essentially means that all foreign exchange gaming transactions are prohibited. Thus, an offshore gaming operator is unlikely to be able to offer his or her services from outside India within India.
Distribution of Legislative Powers:
Under the Constitution of India, gambling falls within the purview of state governments, allowing them to enact laws regulating sports betting. This distribution of powers has led to variations in the approach to gambling across different states. While some states have legalized certain forms of gambling, others maintain strict prohibitions, contributing to a diverse legal landscape. To take an example, States like Sikkim have taken steps to permit online betting in sports, indicating a shift towards more liberalized regulations. Sikkim has implemented several key measures to navigate the legal landscape of gambling within the state.
Sikkim Online Gaming (Regulation) Act:
Sikkim passed the Sikkim Online Gaming (Regulation) Act in 2008, which laid the foundation for legalizing online gambling within the region. This Act initially focused on poker and casino games like Blackjack, Pontoon, Bingo, Poker, and Baccarat. Subsequent amendments expanded the scope to include online sports betting, subject to operators holding licenses granted by the State Government of Sikkim.
Case Analysis:
A. Bimalendu De v. Union of India:
In the case of Bimalendu De v. Union of India, the Calcutta High Court addressed the legality of sports betting and the distinction between games of skill and games of chance. The court's ruling highlighted the importance of differentiating between activities based on skill and those based on chance when determining the legality of betting practices. This case underscored the need for clear definitions and regulations to govern sports betting activities in India.
B. Board of Control for Cricket in India v. Cricket Association of Bihar & Ors:
The case of the Board of Control for Cricket in India v. Cricket Association of Bihar & Ors brought to light the legal complexities surrounding cricket betting and the challenges of regulating sports betting to prevent issues like match-fixing. This case emphasized the significance of implementing robust regulatory measures within the sports industry to maintain integrity, transparency, and fair play. It also highlighted the need for legal clarity and enforcement mechanisms to combat illicit activities that could undermine the credibility of sports competitions.
Conclusion:
The landscape of sports betting in India is a dynamic and evolving domain influenced by a mix of legal ambiguities, regulatory challenges, and market complexities. The legal framework, primarily governed by the Public Gambling Act of 1867 and state-specific regulations, presents a nuanced environment where the distinction between games of skill and chance plays a pivotal role in determining the legality of betting activities. The challenges posed by unregulated betting, including issues of consumer protection, revenue leakage, and the potential for illicit activities, highlight the urgent need for a structured regulatory framework to govern sports betting effectively.
Suggestion:
Public awareness campaigns should be launched to educate individuals on the risks associated with sports betting, while leveraging technological innovations like blockchain and AI can bolster monitoring capabilities and ensure fair play. Drawing from international best practices, prioritizing transparency, and fostering continuous evaluation and adaptation of regulations will be key in fostering a regulated, accountable, and trustworthy sports betting environment in India.
*The Author is a legal Scholar from India
(The Image used here is for representative purposes only)
References:
Lexology. (n.d.). A general introduction to gambling law in India. https://www.lexology.com/library/detail.aspx?g=3c73b277-c25e-4883-a152-a47e1040f4f2Â
 AIR 2001 Cal 30
(2016) 8 SCC 535
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