As the second most populous country in the world behind China, it should come as no surprise that the Indian gambling market is enormous. Many international companies have an eye on the legal status of gambling in India, desiring to tap into a market estimated to be valued around $60 million per year. Notwithstanding the legal status of gambling in India, the legal position remains very much a ‘grey area’. Successive governments have failed to adequately address the issue, particularly with regards to online gambling. There have been many arguments for and against gambling within India, but the country still uses laws which date back to the nineteenth century for guidance. This article attempts to shed light on the current state of affairs regarding gambling in India.
Much like in the US, legislation on gambling in India is left to the individual state rather than the federal government. As there are 27 different states in India, this means that there is potential for 27 different laws related to gambling. However, the Public Gambling Act of 1867 is a centralised law which prevents the running of a ‘public gaming house’. In fact, as well as prohibiting the running of gambling houses, this law also states that visiting such an establishment is illegal. This law excludes games of skill, as these are permitted. The only difficulty then is establishing which betting games are skill-based, and which are games of chance. The Indian government has had to rule on this in the past, although it is safe to say that the results have not always seemed entirely logical.
One good example of this is the case of horse-racing, which is regarded as a game of skill. As piloting a horse around the track certainly requires skill, as does successfully picking winners on a regular basis. However, betting on cricket (India’s most popular sport) is considered to be a game of chance, despite the fact that placing bets on this sport seems to involve the same levels of skill as betting on the horses. The card game Rummy has also been deemed to be a game of skill, but poker has been categorised as a game of chance. Given that a skilful poker player will beat a novice ninety-nine times out of a hundred, this seems like a pretty arbitrary decision.
Lotteries are permitted to be run in India, with many states running their own lottery these days. The laws originally stipulated that lotteries could only have a maximum of one draw per week, though this law has been completely ignored in many states. Moreover, some Indian lotteries operate draws every 15 minutes. The 1949 Indian Constitution makes clear that individual states have the right to make laws related to ‘gambling and betting’. Many states have chosen not to take advantage of this option, although 13 have legalized lotteries and two states (Goa and Sikkim) have legalized a number of forms of gambling.
Goa and Sikkim have demonstrated a more relaxed attitude towards gambling than most other regions of India. There are seven land-based casinos currently operating in Goa (as well as a number of offshore casinos), and slot machines are permitted to be installed in four-star hotels in this state as well. Sikkim has also legalized gambling and allowed for the opening of casinos – another instance where the regional laws have been seen to take precedence over the federal laws. So far Sikkim has also been the only state in India to legislate for online gambling, making traditional casino games like poker, roulette and blackjack legal to play online. The state government will offer gaming licences for any online company based in Sikkim. When this law was originally passed in 2009, it was believed that it would open the floodgates to legalized gambling in India. However, questions have been raised about the legality of Sikkim’s gambling laws and licences. To date, the only gambling site operating in Sikkim is PlayWin Lotto.
No other laws specifically addressing online gambling have been passed in India leaving it an area which is currently unregulated. However, international online gambling sites are more than happy to accept Indian players, many of them even offering the option to bet in Indian rupees. Nobody has ever been prosecuted for gambling via one of these online sites. It is estimated that about half of the $60 million spent on gambling each year is illegal, much of which stems from online gambling. The main issue faced by Indian online gamblers are the restrictions they face in fund betting accounts. Indian banks simply do not to process transactions to online betting sites. As a consequence, electronic wallets like Skrill and Neteller have proved a popular way to fund online casino accounts, particularly since debit and credit cards are not really an option.
With no clear lines drawn, the government of India is losing out on a large amount of potential tax revenue. International operators are coming into the Indian market and hoovering up players, and none of that money filters down to the local economy. It seems as though it will take one state (like Sikkim) to start operating a fully-functioning system which legalizes online gambling in order for others to follow. There is cautious optimism that such laws will be introduced sooner rather than later, although it is hard to predict with any degree of certainty. Until such laws are brought in, India will continue to be the loser as far as online gambling is concerned.