The legal and regulatory framework of online gaming for stakes in India

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The Constitution of India lays down the allocation of powers between the central government and state governments when it comes to legislating on various matters.

Schedule VII of the Constitution details the legislating powers of the central government and state government. As per the allocation, the legislative competence on the subject of ‘betting and gambling’ lies with state government rather than it being under the jurisdiction of the parliament.

Gambling laws in India

Prior to the independence, a colonial enactment the Public Gambling Act, 1867 (PGA) was in place. Upon Constitution coming into force, several states have adopted PGA while few states like Tamil Nadu, Telangana and Andhra Pradesh have enacted separate laws.

A common thread across these legislations is that while they prohibit betting and gambling, they specifically exempt games of mere skill from the ambit.

But none of these decades old laws define ‘mere skill’. By virtue legal precedents, it is laid down that a game of mere skill is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player although the element of chance cannot be entirely eliminated.

Specific laws on online gambling in India

As these laws were enacted prior to advent of internet, they don’t specifically deal with online games. Certain states like Andhra Pradesh, Telangana and Tamil Nadu have amended the laws in recent times to remove the game of skill exception and also impose specific prohibition online games played for stakes. Currently, the laws differ from state to state with many states relying on the concept of ‘purposive interpretation’ of PGA and similar laws to apply the same to online games.

To bring in uniformity, the Law Commission in 2018 recommended that Parliament may enact a model law to regulate betting and gambling, which states may adopt. Parliament may also enact laws under Article 249 (in national interest) or Article 252 (if two or more states consent). With regard to online gambling and betting, the Commission observed that Parliament has the competence to enact a law.

It may be noted that the central government has recently notified rules governing online games earlier this year. This is a welcome move to bring out long due regulatory clarity concerning online games played for stakes. These online rules are in addition to laws already in force in the states.

Besides states like Andhra Pradesh, Telangana, Tamil Nadu, Odisha, Assam, states like Nagaland and Sikkim have introduced a licensing regime for online gaming operators to offer or exhibit online games for stakes in these states.