Evolving legality of “Gaming” in India

Evolving legality of “Gaming” in India
02 July 2019

Evolving legality of “Gaming” in India

Introduction

This article talks about increasing popularity and evolving worth of ‘Gaming’ sector in India and the public involved in the upcoming future, Its legislation and types of gaming. With one of the world’s largest youth population, India assured to become one of the world’s leading markets in the Gaming Sector. The Indian online gaming industry is about to add 190 million gamer(s) and is on its way to becoming a USD one billion opportunity by 2021, from USD 890 million today. The growth is driven by the rising younger population, higher disposable incomes, the introduction of new gaming genres, and the increasing number of smartphone and tablet users.

Central and States Legislation for “Gaming” 

The Public Gambling Act, 1867 is the central legislation in India which prohibits all the so-called games of chance, except lotteries and the games classified as a game of skill. The penalty for breaking this law is a fine of Rs.200 or imprisonment of up to 3 months. Additionally, this Act prohibits visiting gambling houses. A fine of Rs.100 or imprisonment of up to one month is the penalty. 

Section-1 of The Public Gambling Act, 1867 defines “Common gaming-house” as any house, walled enclosure, room or place in which dice, cards, tables or other instruments of gaming kept or used for the profit or gain of the person owning, occupying, using or keeping such house, enclosure, room or place, whether by way of charge for the use of the instruments of gaming, or of the house, enclosure, room or place, or otherwise howsoever. 

Whereas Other sections of The Public Gambling Act, 1967 defines Penalties to the Owner(s) of Common gaming-house and people Involved within it and Powers provided to the police and other involved authorities in India. 

Entry 34 in List II in the Seventh Schedule of the Constitution of India 

provides eligibility powers to States on creating their very own betting laws, gambling laws, and also their very own policies within their territories. 

Some Gambling Legislation regulating physical gambling and sports betting are Assam Gaming and Betting Act, 1970; Bombay Prevention of Gambling Act, 1887; Goa, Daman and Diu Public Gambling Act, 1976, etc. 

Various definitions of gaming

(a) Gambling, Betting, and Lotteries: 

‘Gambling’ as per most Gambling Legislation mean “the act of wagering or betting” for money or money’s worth and it does not include Games of Skills, wagering and betting on horse races or dog races and Lotteries (which covered under Lottery Laws). 

  1. Physical gambling: The most common parts of gambling are Card games like teen Patti (akin to flush), rummy, poker, and bridge as well as sports betting. The Gambling Legislation deal with gambling in the context of a physical enclosure termed a “common gaming houses”. when this Gambling Legislation is read in the context of online and digital gambling, their interpretation and applicability get complex. 
  2. Online gambling: When the legislation of gambling was introduced, it was before the emergence of the internet which is why they lack provisions related to online gambling. Only the state of Sikkim and Nagaland have adopted specific legislation to regulate and permit online gambling. Sikkim Online Gaming (Regulation) Act 2008, The Sikkim Online Gaming (Regulation) Rules, 2009, Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2015 and Nagaland Prohibition of Gaming and Promotion and Regulation of Online Games of Skill Rules 2016. Most popular online gambling sites in India are card games sites hosting Rummy and Poker tournaments. 
  3. Horse Racing: Horse racing has given a special status under the Gambling Legislation. Central legislation excludes betting on horse races from within their purview, subject to certain conditions. In K.R. Lakshmanan vs State of Tamil Nadu (“Lakshmanan Case”), the Supreme Court held that betting on horse racing was a game of skill since factors like fitness, and skill of the horse and jockey could be assessed by a person placing a bet. The analysis is interesting to note as this reasoning is used to justify other forms of betting as games of skill, especially sports betting. 
  4. Casinos: A casino is a facility which houses and accommodates certain types of gambling activities. The industry that deals in casinos are called as the gaming industry. The Gambling Legislation of Goa, Daman & Diu and Sikkim allow gambling to a limited extent, under a license only. In Goa, the law also permits casinos on board an offshore vessel. 
  5. Lottery: The Central Lottery Laws allow the state governments to organize, conduct or promote a lottery, subject to the conditions. The state governments may appoint an individual or a corporate as a “distributor or selling agent” through an agreement to market and sell lotteries on behalf of the organizing State. While some states such as Punjab, have gone to the extent of providing for and approving online lottery systems to governed by the state Lottery Laws, lottery banned in certain states in India, for example, Madhya Pradesh.  

(b) Casual and Social Gaming: 

“Casual Games” refers to games like puzzles, sports and action games, arcade games, card or board games, adventure-themed games, etc. The goal of casual games is not to bet or wager and it is a separate category of games than those which fall within the scope of the Gambling Legislation. A perfect source of entertainment to the masses. Another type of casual gaming is through social media – Social games such as Farmville, Cityville, etc. have affected the way consumers use social networks, and Facebook is one of the world’s largest online gaming platforms. There are also countless websites/applications for social gaming. 

In the State of Andhra Pradesh Vs. Satyanarayana (Supreme Court judgement on rummy), the very game of rummy held to be a game of skill by the Supreme Court on the ground that- unlike ‘three cards’ games of ‘flush’, ‘brag’, etc. which considered as the games of pure chance, rummy involves the dominance of skill as the fall of cards needs to be memorized and a significant skill is needed in holding and discarding cards for building up the game of rummy. In all games that need shuffling and dealing of cards, there is an element of chance because the distribution of cards is not one singular set pattern or design but it depends upon how the cards meet their place in the shuffled pack. 

A game can be stated in two ways, it could be either a game of chance or a game of skill and it could also be a game that entails both. In Lakshmanan case, the Supreme Court, referring to the cases of State of Bombay v. R. M. D. and Satyanarayana case, recorded that games/competitions, where victory depends on the state or degree of skill, are not ‘gambling’ and irrespective of any factor of chance, a game would be a game of ‘mere skill’ if it is a game of skill. Where legislation provides “Game of skill” a legal means and “Game of Chance” an illegal means. 

Video Game Parlour

Any person desiring to run a Video Game Parlor(VGP) shop must apply for a license to the Police Licensing Unit. The license for a Video Game Parlour granted under the “Regulations for Licensing and Controlling Places of Public Amusement (Other than Cinemas) and Performances of Public Amusement (Amendment ), 1991”.

The Documents required is provided on Delhi police licensing unit’s website (http://www.delhipolicelicensing.gov.in/home/video). Where after specific steps a NOC is being provided by the Licensing unit and one can start their own Gaming Parlor. The license once issued is valid for a period up to the 31st of December which is renewable. If your video game parlor also provides Cyber cafe facility then as per orders passed by the Commissioner Of Police under section 144 of the Criminal Procedure Code, 1973 the strict compliance to follow. Rules and Guidelines for the same are provided on the same website.