Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 20, 1995, with 20 different games. Ever since then more than 1, 400 websites, mostly domiciled in small Caribbean destinations, have given rise to an industry that grosses over $3 thousand a year. In situs slot online fact no business on the internet generates more revenue than online wagering. Out of the estimated 14. 5 million online gamblers, almost 30 per cent are from Asia.
A bet can be set minutes. Anyone with a charge card can set up an ocean going currency account with a wagering site, leaving them free to place gamble on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept gamble on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Gamble can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be shipped to you or left for future gamble.
The law relating to online wagering in India needs to be understood within the place’s socio-cultural context. At the outset, wagering, although not absolutely prohibited in India, does not receive express support by policy makers. The Indian organized wagering industry is estimated to be worth around US$8 thousand. While strong laws have checked the growth of casinos and high street gaming organisations like many other countries, unless the state of Goa, the lottery business remains the most post popular form of wagering.
Though wagering is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Wagering features in List II of the Cosmetics of India, meaning that the state governments have the authority to enact laws in order to regulate wagering in the respective states. Thus, there is no single law overseeing wagering in the entire country. Different states have different laws overseeing wagering in addition to the laws that have an application across the nation. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.
Regulation of wagering
The courts have defined wagering as ‘the payment of a price for enable you to win a prize’. The prominent element of skill or chance should certainly determine the nature of the game. A game may be deemed to be wagering if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that gambling on horse racing and a few card games are not wagering. The right to undertake the business of wagering and lotteries is not considered as a significant right protected by the Cosmetics of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, thus there is a resistance to complete prohibition.
The following legislation is pertinent to wagering:
The public Gaming Act, 1867
This Act provides punishment for public wagering and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public wagering in their respective jurisdictions. The penal legislations in respective states have been amended as outlined by their policy on wagering. However, this legislation does not have any direct relation to online wagering unless a vast decryption is made available to this is of common gaming house so as to include virtual boards as well.
The Indian Contract Act, 1872 (ICA)
The ICA is a codified outdoor patio umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lies down; ‘Agreements by way of gamble are void, and no suit shall be brought for recovering anything alleged to be won on any gamble or entrusted to any person to abide by the result of any game or other uncertain event on which any gamble is made’. Wagering, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.
Lotteries (Regulation) Act, 1998
This Act offers a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries of their territorial jurisdiction. This Act also offers up the manner in which the lotteries can be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.
Indian Penal Code, 1860
Section 294A deals with keeping lottery office. It says that whoever keeps any office or place when it comes to drawing any lottery not being a State lottery or a lottery authorised by the State government, shall be reprimanded with imprisonment of either description for a term which can extend to six months, or with fine, or with both.
And whoever puts out any proposal to pay any sum, as well as to deliver any goods, as well as to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be reprimanded with fine which can extend to one thousand rupees.
The law related to wagering is also applicable to online wagering. All wagering contracts are considered to be wagering contracts and it is not possible to take such contracts under the ICA, detailed above.
As pointed out earlier, the online lottery is the most popular form of internet wagering in India. Most companies marketing and distributing or completing state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Despite the fact there was no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.
There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the choice of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.
Enforcement over foreign jurisdictions
If the websites are visible and powered from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for wagering related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a wagering website visible outside India aiming at receiving money from within India cannot do so through legal channels.