Gambling means the act of betting money on something for profit purposes as a form of entertainment or for earning money due to various reasons. Lottery means giving prizes to people who are chosen randomly by chance after they have bought tickets bearing certain numbers on them. A lottery is a form of gambling. Lotteries may be for the government, charity, private persons etc. The reference of gambling in Indian culture can be seen in the epic Mahabharat where Pandavas lost everything to Kauravas.
In India, the legalization of lottery and gambling is a matter of state subject as held by the Supreme Court in a decision in 2015. There is no nationwide ban on such activities. Betting and gambling are covered in the Seventh Schedule of State list under the Indian constitution. The Supreme Court saw lotteries as a specie of gambling. The Supreme Court rejected the plea to identify the right to sell the lottery as a fundamental right. Since it is a matter of state subject, the state government has the jurisdiction to either legalize or illegalize gambling and lotteries.
In India only 13 states have given legal status to lotteries, they are Maharashtra, Madhya Pradesh, Assam, Arunachal Pradesh, Goa, Kerala, Manipur, West Bengal, Mizoram, Meghalaya, Sikkim, Nagaland, and Punjab.
Goa, Sikkim and Daman are three states which have allowed gambling in India through casinos with prior permission from the government. The reason behind maximum states not allowing legal status to these games is that they see them as game of luck rather than game of skill except in certain cases of horse racing etc. People against gambling argue that it leads to crime, corruption, money laundering etc. People arguing for legalizing gambling say that it can be a source of income through revenue for the governments. According to a report in 2013, the casinos in Goa gave 135 crores in revenue to the Goa state government.
Laws Governing Gambling and Lotteries
1. Public Gambling Act, 1867
Different states have different laws relating to the regulation of gambling and lotteries. The principal act that governs gambling and lotteries in India is the Public Gambling Act, 1867 and the Lotteries (Regulation) Act, 1998. The Colonial-era Act, the public gambling act prohibits gambling or even establishing gambling houses. Also, this act has provided for punishment for breaking laws under it. Visiting gambling houses is also seen as an offence under this act. The Public Gambling Act, 1867 has been continued in India but it was abolished by the Pakistani government.
2. Prize Competition Act, 1955
The Prize Competition Act, 1955 is another enactment of the parliament which tried to restrict gambling activities which awarded prizes to those who won these games.
3. The Lotteries (Regulation) Act, 1998
The Lotteries (Regulation) Act, 1998 has thirteen sections. Under Section 11 of the said Act, the central government can make rules for carrying out the provisions of this act while under section 12 of the act the state government has been conferred the power to frame rules to regulate or to carry out the provisions of the act. How a lottery is to be organized by the state government has been provided under section 4 of this act. Lotteries should be conducted or organized in compliance with section 4 of the act by the state government otherwise they are prohibited under Section 3 of the Lotteries (Regulation) Act, 1998.
The offences under this Act are cognizable and non-bailable in nature. Penalties have also been provided for any breach of provisions of the act. A lucky draw is held to be legal but not a lottery and a lucky draw are not covered under the category of lottery under Section 2(b) of the Act. In the case of lucky draws, a person is not needed to purchase a lottery ticket, instead, he can directly come and try his luck which is opposed to that of a lottery where a person has to purchase a lottery ticket to try his luck which in return may lead to bankruptcy of the person if he fails to secure a position in the lottery.
4. Lotteries (Regulation) Rules, 2010
In 2010, lotteries (regulation) rules were announced by the central government in the official gazette in the exercise of powers under section 11 sub section (1) of the Lotteries (regulation) Act, 1998. According to section 3 of these rules, the state can organize a paper lottery or online lottery or even both. The minimum price of the lottery ticket should not be less than two rupees and the first prize of the lottery should not be less than ten thousand rupees.
5. Information Technology (IT) Act, 2000
The Information Technology (IT) Act, 2000 is another legislation which tries to control and regulate online gambling. With technological advancement, various cyber-crimes have started to take place. In order to curb these crimes and to give legal recognition to certain e-transactions, the IT act was introduced. Online gambling is covered under online crimes. There is no express mention in the IT act that online gambling is illegal. But, the government has got the power to block foreign websites which offer online gambling opportunities. Despite having the power to block these websites, the government has chosen to instruct the ISP providers to bar citizens of India from accessing some of these websites. However, this is not seen as very effective. If someone tries to visit these barred websites, it writes ‘this website is not available in your region. In order to access these websites, one can acquire other methods like establishing a VPN connection to access the internet of other regions and can gamble on these online platforms.
6. Section 294A of the Indian Penal Code
Section 294 A of the Indian Penal Code makes keeping the lottery office an offence under this code. It says that any person who keeps a lottery unless authorized by the government shall be punished under section 294 A of IPC. Lottery amounts to gambling as both of them are games of chance. This section makes two things punishable (i) Keeping of offices or places of drawing lotteries (ii) Publication of any advertisement relating to them. The punishment is imprisonment of either description for a term which may extend to six months, or with fine, or with both. The offence under section 294 A is non-cognizable, bailable, non-compoundable and triable by any magistrate. If anyone is publishing proposals relating to lotteries, it is non-cognizable, bailable, non-compoundable and triable by any magistrate.
7. The Indian Contract Act, 1872
Section 30 of the Indian Contract Act, 1872 says that agreements by way of wager are void and that no suits shall be brought for recovering anything alleged to be won on any wager. If the value of the prize is five hundred rupees or above and it is to be awarded to the winner of any horse race, then Section 30 of the Indian Contract Act, 1872 will not apply, but nothing in this section shall legalize any transaction connected with horse racing to which section 294 A of IPC applies.
8. State Legislations
Apart from these main central legislations governing gambling and lotteries, there are many state legislations as well. For example:
- Meghalaya Regulation of Gaming Act, 2021
- Sikkim Online Gaming (Regulation) Act, 2008,
- Assam Gaming and Betting Act, 1970,
- Orissa Prevention of Gambling Act, 1955
are some of the examples of state legislation.
Is Betting In Horse Racing Gambling?
The supreme court in the landmark judgement of Dr. KR Lakshmanan vs State of Tamil Nadu, has held that betting in horse racing is not gambling as it requires skill to judge as to which horse has the form to win the race. The supreme court in this case included horse racing amongst football, cricket, chess, golf as a game of skill.
Few Indian states allow horse race betting like Haryana, Andhra Pradesh, Delhi, Assam, Maharashtra, Karnataka, Punjab, Tamil Nadu, Uttar Pradesh, Meghalaya, and West Bengal. In total eleven Indian states have allowed horse race betting.
Gambling and lottery games are seen as games of luck or games of chance instead of games of skill except for certain exceptions like betting on horse racing and certain kinds of lotteries. Gambling and some lottery games are dependent on a contingency which may or may not happen. With time many online gaming platforms have emerged and also with that online betting and gambling platforms have also taken their foot on the internet. A game like Teen Patti was banned in India and was declared illegal. Dream 11 which is a fantasy league game has been banned in states like Assam, Sikkim, Odisha, Telangana and Andhra Pradesh. Many online games of this sort have been banned in many states while some have allowed them.
In gambling and lottery games, there is the involvement of great financial risk. People may lose everything that they own. Even after knowing the fact of such risk, these games tend to attract a lot of people because of its promise to bestow with gargantuan returns on their investments. Either they win everything or they lose everything.
Huge sums of money are put on bets on IPL and other cricket matches by illegal wagering. Many get caught by the police as we get to see in the news every now and then. The laws relating to gambling and lottery are not uniform throughout the country. Different states have different legislations as it is a state subject under the Indian constitution. Some states have declared them legal and some have banned them. The existing Indian laws on gambling have proved futile in its attempts to curtail gambling and other related activities.
The existing laws are more focused on scaring people to not indulge in gambling rather than preventing them. The government-approved casinos donate huge amounts as taxes to the state governments. Like in Goa casinos are seen as assets by the state government. If regulated properly they can bring the tax to the governments which can be utilized for the greater good of the people. The governments should spread awareness to make people aware of the disadvantages of gambling activities because often it is the vulnerable sections of the society who succumb to their desire to earn quick money. A systematic and much more comprehensive approach is needed on part of the legislature and the executive to regulate gambling.