The Legality of Online Gambling Apps in India

The judgments of some foreign countries and some articles suggest that it had originated from Flush/Teen Patti. The SC in the Satyanarayana Case had observed that Flush, Brag and Teen Patti were games of chance. As a natural corollary, Poker, being a variant of the said games, was a game of chance as well. The Respondents also relied upon the Chamarbaugwala Case, in which the SC had held that the provisions under the Prize Competitions Act, 1955, are severable in their application to only games of chance. And evaluate the worth of a player against the other available players keeping aside bias for an individual or a team; Adhere to an upper credit limit, and ensure that the team did not entirely/substantially consist of players from a single real- world team.

In recent years, the proliferation of the internet and digital technology has given rise to a growing market for online gambling around the world, including India. The rapid expansion of this industry, however, has been met with various legal challenges and regulatory concerns. In India, a diverse nation with a complex legal system, the question of whether online gambling is legal remains a topic of considerable debate and uncertainty. The article will also delve into the distinction between games of skill and chance, as it plays a crucial role in determining the legality of gambling activities. Additionally, the article will address the legal status of betting and online casinos in India, the potential penalties for engaging in illegal gambling, and the forms of gambling that are explicitly allowed.

Additionally, globally there have been instances of illegal gambling platforms becoming a conduit for money laundering and even terror financing posing a threat to the larger national security. They are also known to dupe the bettors through trickery and manipulation. Apart from luring vulnerable users, these platforms flout existing regulations posing a major threat to the Indian digital ecosystem. They are clearly evading direct and indirect tax laws and multiple other applicable laws of the land. In The State of Bombay v R.M.D. Chamarbaugwala, the Supreme Court interpreted the term ‘mere skill’ to mean games which predominantly rely on skill. In order to not be classified a game of chance, a game would have to involve a significant exercise of skill.

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More stringent rules for Unified Payment Interface (UPI) channel are also being considered to clamp down on the operation of these platforms. Earlier, skill-based games were taxed at 18%, but with the new GST rate in place, the online gaming industry is expected to continue growing, with India being the second largest gaming market globally, housing around 442 million gamers. The license for online skill games with stakes from Nagaland State Government is valid in all states in India except in those states which have specifically prohibited the activity of online games with stakes.

• Furthermore, this regulatory framework not only ensures a transparent and secure betting environment but also generates significant tax income.
• Higher GST rates will also lower the playable value received by the platform users.
• No gambling laws strictly and outrightly prohibit Indians from betting on cricket, however, the Central Government looks at betting as a game of chance and not that of skill (like in horse racing).
• The Indecent Representation of Women (Prohibition) Act, 1986In India, many games and gaming websites display content, portraying animated human caricatures depicting women in a manner which is offensive/indecent.
• To put an end to his confusion, the online rummy websites had approached the Supreme Court6(details of the case have been discussed below) to clarify whether the Gambling Legislations cover online gambling portals.

Under Indian law, games of skill are generally considered legal, while games of chance are often deemed illegal. The phenomenal rise in online gambling and gaming in the past years is both a boon and a bane for society. While online gaming leads to generating revenue and creating jobs, it also opens up avenues for many illegal activities, such as money laundering, match fixing, etc.

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The SC at this juncture was yet to deliver its verdict on the issue of taking stakes from Rummy in the offline context. The expected win in poker, too, was dependent on the skill or strategy employed by the player in making key decisions, which could be developed as a skill. O a person had to assess rival players’ reaction whilst maintain a ‘poker face,’ i.e. keeping one’s expression concealed;o Every turn of the card required a player to assess whether to continue or not.

Goa and Sikkim were the only states that allowed gambling and betting, subject to regulations made by these respective states. The Supreme Court has held that betting on horse racing was a game of skill. Most of the Gaming Enactments have carved out an exception for betting money or wagering upon horse racing. However, certain conditions are levied upon Horse Racing for it to be exempted under the Gaming Enactments. These conditions include that such betting shall take place on the specific day when the horse has run and in an enclosure sanctioned by the State Governments, etc. Turf clubs regulate betting on physical horses within their premises.