Is Betting Legal In India?

People have designed many games utilizing their innovative minds and technology, and many of them are often used for betting. These betting games help people fulfill their financial and entertainment needs. Winning or losing in such games can depend on skill, expertise, or luck. Because of this, there is a lot of uncertainty about whether betting games are legal in India or not.

The entry of online gaming and questions about how it should be synchronized have further added to these concerns. Therefore, we will discuss everything related to betting that you should know. We’ll also see all the important laws and regulations that exist at the state and national level about gambling in India. So, let’s get started!

Understanding Betting

Betting is a classification of gambling. While gambling is an extensive term, betting is a particular form of it. Betting is an organized activity that usually happens in sports. Nowadays, betting is usually a reconciliation between two persons.

One person assumes what will happen and stakes money on it, while the second person either gives up the bet or pays the acknowledged amount of money if the assumption is accurate.

Types of Betting

There are many different types of betting. These include non-casino games, arcade games, table games, and electronic gaming. The most famous types of betting are:

Gambling in Casinos

Casino gambling is legal under the Public Gambling Act but is controlled. Only two states in India - Goa and Sikkim - permit casino gambling to some extent. In these states, only five-star hotels can get a license for casinos, sanctioned by the state government. In Goa, casinos are also permitted on offshore ships.

Horse Race Betting

The Supreme Court has stated that horse races are a game of skill, not just luck. As a result, you are open to betting on horse races. However, some situations have to be met for horse race betting to be certified under Indian gambling laws.

For instance, the betting must take place on the day the horse race occurs, and it must be done in an area sanctioned by the State Government.

Cricket Betting

In India, there are no betting laws that particularly restrict betting on cricket. However, the Central Government views cricket betting as a game of possibility rather than a game of expertise, unlike horse racing.

After a spot-fixing scandal in 2013, the Law Commission approved legalizing betting in India under strict control to help prevent money laundering. However because online gambling is international and Indian rules don't apply to foreign websites, the Government has put an evaluation in place to make it difficult to use these sites.

Poker

There's a debate about whether poker is a game of skill or chance in terms of gambling laws. Some argue that certain types or variations of poker are skill-based and should be allowed in Indian states as games of skill.

The Nagaland Act specifically classifies poker as a skill game. West Bengal also banned poker from being considered "gambling" under its Gambling and Prize Competitions Act 1957. When poker is played as a skill game, no license is needed under the Karnataka Police Act, 1963, according to the Karnataka High Court.

However, the Gujarat High Court has stated that poker is a game of possibility and is recently not permitted in the state.

Lotteries

The Central Lotteries (Regulation) Act of 1998 monitors government lotteries. This act certifies state governments to run lotteries and make laws for them, as long as these regulations don't interfere with the Central Lotteries Act.

According to this act, lotteries can only be drawn once a week. However, some Indian states have been permitted to have various lottery terminals where draws occur as often as every 15 minutes. Sikkim is a well-known state for its betting workstation and regulatory system.

Sikkim has the exceptional right under the seventh schedule of the constitution to make its betting laws and doesn't have to accompany the Central Lotteries Act.

Legality of Betting in India

In India, every state can make its laws about gambling. So, whether or not gambling is legal depends on the state you're in. Right now, only Goa, Sikkim, and Daman have authorized gambling.

At the national level, the Public Gaming Act of 1867 monitors gambling. But because this law was designed in 1867, it doesn't say anything about online gambling. The Information Technology Act of 2000 also did not bring online gambling topics. That's why people in states with gambling rules can still bet online, as it's not particularly legal or illegal.

However, some states, like Tamil Nadu, have tried to forbid online gambling. In February 2021, Tamil Nadu declared online betting illegal, but this didn't last long. By the end of 2021, the Madras High Court reversed this regulation.

The High Court said the law was opposed to Article 19(1)(g) of the Constitution, which gives people the right to have any career or run any business. So, the validity of gambling in India is still uncertain on a national level.

Laws Governing Betting in India

Gambling laws in India aim to preserve people who gamble, cease bluffing and money laundering, and create tax income. Here are some typical Indian laws connected to gambling for you to consider:

The Public Gambling Act, 1867

The Public Gambling Act is the paramount law that monitors gambling in India. This central law restricts the execution or operation of public gaming houses. Violating this law can result in a fine of Rs.200 or up to 3 months in jail.

The main restrictions in this Act include:

- Retaining, controlling, or managing a gaming house/common gaming house.

- Betting in a common gaming house or being there while gambling is happening.

- Providing or lending money for gambling to persons who visit any such gaming house.

The Lotteries (Regulation) Act, 1998

The Lotteries (Regulation) Act of 1998 permits states to arrange and control lottery systems within their territory and to pool earnings from them. Some essential attributes of this Act are:

- Lottery tickets must be designed in a way that shows they are original.

- The state government should regulate the lottery events itself, and the profit should go into the state's public account.

- There should not be more than 6 bumper draws in a year.

- A state government can forbid the sale of lottery tickets from other states.

- If someone violates the regulations of this Act (like an agent, promoter, or trader), it's considered a genuine and non-bailable crime. The penalty can be up to 2 years of prison and a hefty fine, or both.

Prize Competitions Act, 1955

The Prize Competitions Act of 1955 places the laws for holding prize competitions. This Act was designed under Article 252(1) of the Indian Constitution of 1950. Section 4 of the Act says that the overall prize money sanctioned is up to Rs 1,000 per month, and the rivalry can have a maximum of 2,000 entries. However, most states have their regulations for this, so this Act is becoming less applicable.

The Foreign Exchange Management Act, 1999

This Act prohibits foreign direct funding in lotteries in India. The Foreign Exchange Management (Current Account Transactions) Rules, 2000, were created under the Foreign Exchange Regulation Act, and they put limitations on overseas gaming dealings.

Sending money abroad for lottery winnings or lottery tickets, etc. is not permitted. In short, taking part in any kind of betting at the international level is not allowed.

State-Wise Variations in Betting Laws

Every state has its way of dealing with the Public Gambling Act of 1867. Few states in India follow the same rules as mentioned in this law. But there are few states like Maharashtra, Gujarat, Telangana, and Nagaland where the state government has made its ways and laws to deal with gambling issues.

We’ll explore some of the very important laws and states through this section.

Gambling laws in  Arunachal Pradesh, Telangana and Karnataka

The Telangana State Gaming Act of 1974 clearly states both online and offline gambling are completely illegal. It includes betting, stacking, and all sorts of online gaming. Section 3 of the Act even outlines the punishment for participation in these activities in Telangana.

Gambling laws in Daman, Goa, and Diu

The Goa, Daman, and Diu Public Gambling Act of 1976 has some changes from the above-mentioned rules. In these areas, they punish gamblers for running any common gaming houses, but they do not prohibit casinos or games of chance. According to the government, common gaming houses in Daman, Goa, and Diu are places where the below-given activities occur:

- Gambling of products like cotton or opium.

- Wagering on the stocks or shares market prices.

- Gambling on any kind of natural phenomena like rain will happen or not, or on the total amount of rainfall expected.

Punishment for Betting

Under the Public Gambling Act of 1867, the below-given punishments apply to gamblers in India:

Penalty for Owning or Managing a Gaming House

If police find out the owner, manager, or occupier of the gaming house where illegal games are being played then they are applicable penalization of up to Rs 200 and can also go for imprisonment of 3 months. This rule and punishment are also suitable for the supervisor of the gaming house and for any person who invests money in such sort of gaming house.

Penalty for Being Found in a Gaming House

As per Section 4 of the Public Gambling Act, if you are found playing illegal games in a gaming house then you can face the penalization of Rs 100 or even go to jail for 1 month. The games that are very strictly prohibited in gaming houses are dice, counters, cards, and so on.

Penalty for Giving False Names and Addresses

In case you are found in a gaming house and on charging the penalty you give the wrong address or decline to give any sort of personal information required by police then you are punishable as per Section 7 of the Public Gambling Act. Your punishment in this case can be either imprisonment for up to 1 month or a fine of Rs 500.

Penalties for Gambling in Public Places

Section 13 of the Public Gambling Act clearly states the kind of activities prohibited in public places and their penalty. Down-below is the list of prevented activities for your reference:

- Playing games that are not expertise-based (such as dice or card games) for the sake of money or any other kind of valuables in a public street.

- Organizing bird and animal fights in a public area.

- Wagering on a public bird or animal fight.

The penalization you can face for these actions can be either a fine of up to Rs 50 or imprisonment for one month.

Need to Regulate Betting

There are many reasons which prove why we need to regulate betting kind of activities in India:

• To protect people from any sort of addiction or ill-treatment.
• To generate tax revenue for the government.
• To pause all kinds of illegal gambling and its linked crime.
• To preserve the rights of participants and to guarantee fair play.
• To stop match-fixing and monitor the unity of sports.
• To provide an organized and secure environment for people who wish to gamble.

Social and Economic Implications

Gambling has multifaceted social and economic implications for society. On the one hand, gambling gives positive outcomes while on the other hand, it gives negative outcomes too. Now the kind of results come depending on the type of gambling getting played, the community’s attitude toward it, and most notably on the local and national laws of that country.

Positive implications include:

• Entertainment
• Tax Revenue
• Financial Stimulation
• Job Creation

Negative implications include:

• Income Inequality
• Social Disruption
• Addiction and Problem Betting
• Increased Crime
• Regulatory and Compliance Issues

About The Author: 

Adv. Saurabh Sharma brings two decades of stellar legal experience, earning a strong reputation through his dedication and expertise. He is the head of JSSB Legal and also a member of several prestigious bar associations, including the Supreme Court Bar Association and Delhi Bar Association. His approach to law is both strategic and adaptable, with a successful track record serving corporate and private clients. A respected speaker on legal matters, he is an alumnus of MDU National Law College and holds certification in Advocacy Skills Training from the Indian Institute of Legal and Professional Development, New Delhi.  JSSB Legal was named "Most Trusted Law Firm of 2023" at the India Achiever’s Awards and "Emerging and Most Trusted Law Firm of 2023" at the Pride India Awards. The firm also earned the title "Most Promising Law Firm of 2023" and is now awarded as the "Most Trusted Law Firm of the Year 2024" by Merit Awards and Market Research.