The Public Gambling Act, 1867 also known as the "Gambling Act" is the primary law which governs gambling in India. However, the state legislatures, under the Constitution of India, are currently entrusted with significant regulatory leeway to form state specific gambling laws pertaining to each specific State. The Gambling Act is the central enactment which has been adopted by some states in India while other states have enacted their own legislations to regulate and govern their own gaming and gambling activities within their respective territories known as their "Gambling Legislations". Most of the Gambling Legislations have been enacted prior to the advent of the virtual or online gambling areas and hence these Gambling Legislations mainly refer to gaming and gambling activities at the physical premises only.
Despite the mounting popularity and the heavy revenue generation through gambling and betting in India, the Indian laws and the Courts in India have been averse to any game of chance and probability, except within the states of Goa and Sikkim. Since the advent of the British rule, several Indian states have enforced the Gambling Act, thereby prohibiting all forms of gambling and betting in their respective states. However, Goa and Sikkim are the only exceptions which have allowed gambling and betting in their own states, subject to regulation of their respective state Governments.
State Legislations over Gambling
India still enforces the laws present prior to independence as its gambling legislations apart from certain amendments within the same legislation. However, there are specific states in our country which have their own legislations pertaining to gambling such as Goa and Sikkim.
Goa, has enabled gambling within its state by enacting the Goa, Daman and Diu Public Gambling Act, 1976. This act had been amended to further allow card rooms within offshore vessels as well as slot machines inside five star hotels as long as prior approval and authorisation by the State Government is acquired after the payment of the specific fee.
Sikkim has also made gambling legal through the enactment of the Sikkim Regulation of Gambling (Amendment) 2005. This amendment has authorized the State Government of Sikkim to notify the areas wherein permission is granted for establishing casinos on the payment of the specific fees for the same.
'Gambling' is not defined under the Gambling Legislations, however the dictionary meaning of gambling is "to stake something on a contingency or take a chance". The gambling under the Gambling Legislations does not include the following:-
Game Of Chance and Game Of Skill
The activity of gambling has been present since time immemorial and can be understood both, in its modern way and its traditional aspects. Historically though gambling has always been referred in its physical space whereas today, gambling encompasses computers and mobile phones and internet which may be connected to several other devices. Moreover, Gambling Legislations do not attract any legal penalties if the activity is a game of skill.
The Gambling Act, by virtue of Section 12, thus excludes 'games of skill' from the purview of the law.
The Supreme Court in the case of Dr. R. K. Lakshmanan v. State of Tamil Nadu [AIR 1996 SC 1153] defined 'game of skill' as "one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player". The Court pointed out that a game of chance is one in which the element of chance predominates over the element of skill and similarly a game of skill is one in which the element of skill predominates over the element of chance. It is basically the dominant element i.e., "skill" or "chance" which determines the true character of the game.
Establishing a gambling business in India
Despite the fact that gambling is a heavily restricted industry in our country, an official and legitimate gambling business can be set up in certain states and according to the specific licenses as has been clear from the above explanation Anyone who wishes to acquire a license for a gambling set-up like a casino etc, must know that these can only be done in three states in India. The three states are as follows:
The Government has allowed the placement of casinos in five star hotels and on water, where tourists spend most their time according to the specific state legislations respectively.
Moreover, these licenses which permit the opening of a gambling business like perhaps, a casino, can also be registered offshore. Their main requirement is to provide all the necessary data about the institution, partners and finances.
FDI in gambling in India
The Ministry of Commerce and Industry as well as the Department of Industrial Policy and Promotion has clearly prohibited any foreign investments in lottery business, gambling as well as betting, via the following rules:-
It is clarified that both foreign investment and foreign technology collaboration in any form are completely prohibited in the lottery business, gambling and betting sector.