The majority of offences and prohibitions under the Gambling Laws pertain to "common gaming houses" (save in areas like Assam and Orissa, where gambling per se is illegal).
In general, under the Gambling Legislations, there must be:
Instruments of gaming include any object used or intended to be used as a subject or means of gaming, any document used or intended to be used as a register, record, or evidence of any gaming, the proceeds of any gaming, and any winnings or prizes in money or otherwise distributed or intended to be distributed in relation to any gaming. There is a school of thought in the modern world that asserts computer terminals used for gambling, as well as servers on which gambling happens and associated e-records are maintained, are also "gaming instruments."
Examining the definition of "common gaming house" in the Gambling Legislations, it seems that the goal of the lawmakers is to restrict the use of physically enclosed facilities for the purpose of "profit or gain."
Therefore, a private property may not qualify as a "Common Gaming House" if the owner has no intention of profiting or gaining from the residence's use for gaming purposes. Extending the comparison to the digital realm, a person's home may not be considered a "common gaming house" if he uses online gambling websites from there.
However, the situation may be different when such gambling takes place in settings such as clubs or cyber cafés, where the cyber cafés profit from the use of computer terminals (which may be defined as "gambling instruments").
The definition of "Common Gaming House" in the majority of gaming statutes includes the phrase "any site." In the absence of a clear exemption, a server/portal/website offering gaming services may come outside the scope of the word. Profiteering through the operation and maintenance of "Common Gaming Houses" might include receiving payment for the provision of an online gaming platform. Online rummy websites petitioned the Supreme Court to clarify if the Gaming Legislations include online gaming portals.
2. Amendment to S2, Explanation. - For the purposes of subclause (u), any premises or place or cyber space belonging to or occupied by a club, society, company or other association of persons, whether incorporated or not, which is used or kept for gaming purposes shall be deemed to be a common gaming house, even if the club, society, company or other association of persons does not make a profit or gain on account of the gaming.
The above outlines what would be considered a typical gaming house.
Sections 3 and 4 of the Gaming Act made it unlawful to operate a common gaming house and, accordingly, to be found in a common gaming house. The prior meaning of "common gaming houses" under the Gaming Act included physical buildings such as a house, tent, car, or boat. By using the term "cyber cell," the Gaming Ordinance has explicitly brought online gaming within the purview of the Gaming Act. Previously, "common gambling houses" was understood to encompass online gaming centres.
In addition, Section 6 of the Gaming Act presumes that any place with "gaming instruments" is a "common gaming house." The former definition of "instruments of gambling" under the Gaming Act includes playing cards, dice, and gaming tables. The Gaming Ordinance has enlarged the definition of "instruments of gaming" to include digital forms and recordings that are used or intended to be used as a register, record, or evidence of gaming.
The Gambling Ordinance enhanced the penalties for breaking Sections 3, 4, and 6 of the Gambling Act and allowed authorised individuals to freeze bank accounts used for gaming.
Section 15 of the Gaming Act specifically bans "games of skill" (together with the federal Public Gaming Act of 1867 and the gaming laws of other States and Union Territories). The most important change to the Gaming Ordinance is the insertion of three explanations to Section 15, especially clarifying that rummy is not a skill game.
Sikkim is the first Indian state to have passed a law regulating internet gambling, the Sikkim Online Gaming (Regulation) Act, 2008. ("Sikkim Gaming Act"). A person may get a "licence" under the Sikkim Gaming Act in order to operate online games such as Roulette, Black-jack, Pontoon, Punto banco, Bingo, Casino Brag, Poker, Poker dice, Baccarat, Chemin-de-for, Backgammon, Keno, and Super Pan 9.
To determine if the same status is provided to games of skill performed online, it is necessary to distinguish between games of skill and games of chance. The term ‘skill’ has been defined by the courts as the application of established norms and set probabilities of sagacity, including five parameters: a learnt or acquired aptitude, strategy, physical coordination, technical experience, and knowledge.
Courts in India have acknowledged Rummy, Chess, Bridge, Billiards, and Golf as skill-based games.
The courts have ruled that poker cannot be considered a game of skill, yet it has been said that it is permissible to play poker in places where it is not outlawed.
Courts have also concluded that the degree of talent necessary in physical games cannot be compared to those played online, since the degree of chance rises in online games and the degree of ability required to play these games online is debatable. In places that ban gambling, online games, even those demanding a high degree of skill and performed by gaming companies giving prize money and a share of the winning hand, are thus unlawful.
Courts in India have also ruled that these online gambling portals are effectively a replacement for conventional casinos, since they function as common gaming houses7 where members communicate and make wagers. Thus, the firm and its directors, agents, and players are subject to disciplinary action.
In addition, it has been determined that profit-making online gaming cannot be included in the definition of trade, business, or commerce under Article 19 (1)(g)8 of the Constitution. In addition, sports betting is illegal in India, and persons who profit from wagers placed on games of skill are not protected by Article 19(1). (g).
In light of the above, it is evident that only games of skill and those performed in physical form have been deemed genuine and within the scope of different Indian statutes dealing with gaming. However, as far as online gaming is concerned, the courts are of the opinion that it cannot be likened to a genuine game being played and would not be permitted unless it passes a "skill" test.
Gambling in Odisha is governed by the Orissa Prevention of Gambling Act of 1955.
The Orissa (Prevention Of) Gambling Act, 1955, also known as the Orissa Prevention of Gambling Act, 1956, monitors gaming activities to guarantee that gambling is prohibited in the state. A common gaming house is defined by the law as a house, room, tent, enclosure, vehicle, boat, or other site used for gambling. A gaming instrument is anything or document that is used as a method or accessory to facilitate gaming. A person who owns a gaming house (a residence, a room, a tent, an enclosure, a vehicle, a vessel, or other gambling venues) or gaming equipment for financial gain is guilty of a crime. The statute contains a broad variety of offences and sanctions.
Due to the Orissa Prevention of Gambling Act of 1956, there are no internet gambling outlets in the state.
Common Gaming House is defined in Section 2(a) as any gaming-house where instruments of gaming are held or used for the profit or advantage of the user, owner, occupant, or keeper of such house, whether by means of a charge for the use of the instruments of gaming or of such house or otherwise.
(b) "Gambling or gaming" does not include lotteries and refers to a play or game for money or other stake, as well as betting and wagering, and any other act, game, or contrivance by which a person intentionally exposes money or other valuables to the risk or hazard of loss by chance; (c) "Gaming house" refers to any house, room, tent, enclosure, space, vehicle, vessel, or location where gaming or gambling occurs or where instruments of
(d) "instruments of gambling or gaming" includes any article used as a subject or means or for the purpose of conducting or facilitating gambling or gaming, or in connection therewith, as well as any books, lists, tickets, forms, or other documents used or intended to be used as a register or record or evidence thereof.
The term "lottery" refers to a mechanism for the random distribution of rewards. (Allowed in Orissa)
When a law's legality is challenged on the grounds that it breaches the protections in Part III of the Constitution, its impact on the violation of basic rights is decisive.
It is the impact of the law on the constitutional right that compels the courts to correct the breach. The person feels offended because the legislation is painful. The harm to a person is quantified by the infringement of a constitutionally protected right. In determining whether a law violates a fundamental right, however, it is not the purpose of the legislator that matters, but rather whether the legislation's impact or functioning violates basic rights.
In State of Arizona vs McDowell and Co., at paragraph 101 of the report, the Supreme Court defines obvious arbitrariness in the context of a legislation as something done by the legislature capriciously, arbitrarily, and without a sufficient determining basis, so that it is disproportionate and excessive. The court continued by emphasizing that "Under Article 14, arbitrariness in the sense of apparent arbitrariness would also apply to the invalidation of legislation. The objection to the challenged Reserve Bank circular based on Article 19(1)(g) of the Constitution and the principle of proportionality. At paragraph 193 of the report, the court noted that the imposition of any restriction on the exercise of a fundamental right may take the form of control or prohibition; however, when the exercise of a fundamental right is prohibited, the burden of demonstrating that a total ban on the exercise of the right alone may be in the public interest rests with the government "carries a heavy burden for the State.
Upon establishing a prima facie case of violation on such grounds, the burden of showing that the challenged law is within the allowable constitutional bounds and that the limitation imposed is reasonable would shift to the State. In this respect, paragraph 49 of the report is pertinent. The court noted that "no one may be regarded to have a basic right to engage in such businesses, trades, callings, or professions as gambling, betting, or dealing in intoxicants, or an activity that is harmful to public health and morality."
All kinds of gambling were not outlawed, but any wagering or betting transaction or plan in which the receipt or distribution of rewards or prizes in money or otherwise relied on chance was forbidden.
Specific contention in wanting amended Section 11 struck down is based on six grounds:
Paragraph 36 of the report contained a disclaimer stating that if a license was denied for an irrelevant reason, the aggrieved party might contest the decision.
Similar to the State of Delhi, the State of Goa has enacted specific legislation in order to permit gaming. The only state that permits online gambling is Sikkim. However, some limits apply. In India, the laws effectively permit these games of skill to be played over the Internet.
To identify what constitutes gaming as specified in different state statutes (i.e. gambling), it is essential to comprehend the distinction between a "game of skill" and a "game of chance." Various courts in India have studied the distinction between the two. It would be worthwhile to analyse the following Indian legal rulings for this purpose:
In State of Bombay v. R. M. D. Chamarbaugwalala, the Supreme Court of India ("Apex Court") ruled that competitions (games) where success depends on a substantial degree of skill do not fall into the category of "gambling" (i.e. gaming as defined by state statutes); and despite the presence of an element of chance, if a game is predominantly a game of skill, it would still be considered a "mere skill" game
In State of Andhra Pradesh v. K. Satyanarayana & Ors, the Supreme Court held that the card game – baccarat – was illegal "Rummy" is not a form of gambling, as stated by the fact that "Rummy requires a certain amount of skill because the fall of the cards must be memorised and the building up of Rummy requires a great deal of skill in holding and discarding cards. Therefore, it cannot be said that Rummy is a game of pure chance. It is mostly and overwhelmingly a game of skill."
In M.J. Sivani & Ors. v. State of Karnataka, the Supreme Court made the following observation: "Even a good player in a game of simple skill might be fortunate or unlucky; thus, even in a game of mere skill, luck must play a role. When determining whether a game is a game of pure skill, however, it is not required to determine with mathematical accuracy the proportion of ability to chance. When the element of chance heavily predominates in a game, it cannot be a game of pure skill. Consequently, it is impractical to determine whether a certain video game is a game of skill or a game of skill and chance. It depends on the specifics of each situation."
In Dr. K.R. Lakshmanan v. State of Tamil Nadu, the Supreme Court once again went into the question of what defines a game of skill, stating: "Games may be based on chance, talent, or a combination of skill and chance. A game of chance is decided wholly or in part by chance or a random draw. The roll of the dice, the spin of the roulette wheel, and the shuffling of playing cards are all instances of chance. In these games, the outcome is entirely undetermined and unpredictable. No human intellect knows or can know what the outcome will be until the dice are rolled, the wheel stops spinning, or the cards are dealt. A game of skill, on the other hand, is one in which success relies mostly on the player's better knowledge, training, attention, experience, and dexterity, while the element of chance cannot be totally eradicated. Golf, chess, and even Rummy are seen as skill-based games. The courts have reasoned that there are few, if any, games that are composed solely of chance or skill, and thus a game of chance is one in which the element of chance predominates over the element of skill, and a game of skill is one in which the element of skill predominates over the element of chance. It is the predominant aspect - "skill" or "chance" - that defines the game's nature."
From the above judgments, it can be concluded that what is permitted in India is only a game of skill, and for a game to be considered a game of skill, the mechanics (nature of the game, mode of play, rules, etc.) of the game must clearly demonstrate that the requirement of skill predominates the element of chance, and that the player's success depends primarily on his or her superior knowledge, training, attention, experience, and dexterity. In addition, it may be deduced that "games of skill" do not fall within the jurisdiction of the majority of state gambling statutes, indicating that playing games of skill for stakes in its physical form would not be considered gambling (as defined in such enactments).