Ujwal Trivedi, Partner at MKA & Co, i.e., M/s Manilal Kher Ambalal & Co (Advocates, Solicitors & Notary), MKA Chambers, British Hotel Lane, Off Mumbai Samachar Marg, Fort, Mumbai, Maharashtra, India
The illegal betting market in India runs into billions of dollars. The legality of it being in question stems from the potential for it to harm the social fabric of the Indian society. Whilst the article remains silent on the exact nature of reforms that should be introduced for it to be legal across India, the author touches upon the ‘not so invisible giant’ that sports betting has already become. The article examines the root of gambling which was reportedly prevalent in Ancient India before analysing the statutory framework that governs it today. Moreover, it elucidates the underlying principle of differentiating a game which is ‘skill-based’ against a game which is ’chance-based’, as so popularly echoed and coined in a plethora of Supreme Court judgments (which in turn are inspired by American legal jurisprudence). After examining several such judgments, the author concludes that the judiciary has indeed recognized games like rummy (playing with stakes) and betting on sports like horse racing to have a ‘substantial degree of skill involved’. Many states have legalized various gambling products whilst others haven’t. The author opines that uniformity in application of gambling laws across the country should be order.
SPORTS BETTING – THE INVISIBLE GIANT
Online and off-line sports betting in India commands a huge market on account of its ever- growing popularity. The illegal betting market in India was quantified to be worth USD 150 billion a year in 2016. More recently, it has been reported by many think tanks to be worth around USD 130 billion. In fact, whenever the Indian cricket team plays a 50 over one-day international match, illegal betting around it touches a sensational figure of approximately USD 200 million per game.
Its popularity is embedded in several factors such as (a) the close connection one forges with their favourite sporting events; (b) the excitement that real money gaming generates for public at at large; (c) the ease with which one can make a sports betting account on account of high- speed internet connection; (d) good internet connection in most parts of the country facilitate placing live bets on sporting events without complications; and (e) the high percentage of mobile users in India further enhances the participation rate of sports fans in betting activities. ‘Correspondingly, online casinos provide a wide range of gaming options which not only cover the games that are available in physical casinos, but also the latest one’s in the market. The factor of ‘convenience’ further operates as a catalyst considering it is effortless to sign up with an online website to open a ‘gambling account’. Furthermore, most of the concerned online websites also have their own mobile applications, which really make it easily accessible at your fingertip’.
With the gaming industry already having 3 unicorns in Dream Sports, Game 24x7 and MPL, Lumikai (a gaming-focussed VC) has projected that the gaming industry as a whole in India is poised to increase by 3x in the next 4 years. Therefore, it is questionable whether sports betting and online gambling will remain invisible in times to come.
INDIA’S ASSOCIATION WITH GAMBLING DEEPLY ROOTED IN ANCIENT MYTHOLOGY
The religious texts of Atharva Veda and Rig Veda written in 1500 BC make references to the game of Chaturanga, which gained prominence during the treatise of Mahabharata in 400 BC.. As Aditya Shivkumar correctly opines, Hindu mythology is replete with references to gambling as an intrinsic part of life and has left an indelible mark on the Indian civilization.” An incident involving a game of dice played by two gods has been immortalized in Kailash Temple (in Ellora) in a certain stone carving of the 8th century. It reflects a popular incident that took place between Lord Shiva and Goddess Parvati which involved a game of dice. Goddess Parvati liked the game enough to decree that anyone who would play the concerned game of dice (Chaturanga) on the auspicious day of Diwali would attain prosperity. Additionally, the ‘roll of dice’ played quite an instrumental role in the battle of Kurukshetra fought over 18 days between the Kauravas and the Pandavas. It is historically documented and narrated that Yudhishtra gambles away his family and wealth. Apparently, Chatarunga (a game similar to modern day Chess) was very popular and widely played in the ancient Harappa and Mohenjodaro during the Indus Valley Civilization (3200 BC).
Besides gaming being a popular past-time during the ancient times in India, evidence based on archaeological excavations further reveal the significance and the role gaming played as a popular pastime. It appears that all the classes of society considered gaming to be a prime sport whereby they were willing to place high stakes. Another mythological story that suggests gambling existed in India in a manner which entailed wide participation by society members without being frowned upon was the story of Damayanti and Nala (wherein King Nala lost his entire kingdom because of gambling just to conquer the same back after his exile in due course).
In fact, the Arthashastra on Gambling Regulation suggests that the prosperous states of India attempted to regulate betting as opposed to making it illegal:
“The Superintendents of gambling, shall, therefore, be honest and supply the dice at the rate of a kokani of hire per pair. Substitution by tricks of hand of dice, other than thus supplied, shall be punished with a fine of 12 panas. A false player shall not only be punished with the first amercement and fines leviable for theft and deceit, but also be made to forfeit the stakes he has won. The Superintendent shall take not only 5 percent of the stakes won by every winner, and the hire payable for supplying dice and other accessories of the dice play, but also, the fee chargeable for supplying water and accommodation, besides the charge for a license. He can, at the same time, carry on the transactions of sale or mortgage of things. If he does not forbid tricks of hand and other deceitful practices, he shall be punished with twice the amount of the fine (levied from deceitful gamblers). The same rules shall apply to betting and challenging, except those in learning and art.”
Thus, it can be seen from the aforesaid literature on gambling in ancient India that not only was gambling a popular pastime which members of different strata’s of society participated in, but the powerhouses that governed the state resorted to regulating gambling, instead of illegalising / banning it.
PRINCIPLE OF FEDERAL SUPREMACY: ARTICLE 246
The Constitution of India refers to ‘Betting and Gambling’ in the Seventh Schedule at entry number 34 in the State List, which emanates and derives its power from Article 246 of the Constitution of India. Article 246 states:
“A. 246: Subject-matter of laws made by Parliament and by the Legislatures of States: (1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”).
(2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State 320[* * *] also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the “Concurrent List”).
(3) Subject to clauses (1) and (2), the Legislature of any State 321[* * *] has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the “State List”).
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included 322[in a State] notwithstanding that such matter is a matter enumerated in the State List.”
In order to simplify the aforesaid, the Parliament and the State divide at the outset, the realms of law they would be legislating upon. For instance, the Parliament has the exclusive power to introduce laws which pertain to all the subjects enlisted in List I whereas the State Legislature is empowered to make laws in respect of subjects enlisted in List II.. As enunciated in the case of State of Kerala v. Mar Appraem Kuri Co.. Ltd., the principle of federal supremacy in Article 246(1) cannot be relied upon unless there exists a conflict which is “irreconcilable” between the entries of the State List and the Union List. Therefore, the State Legislatures are empowered to legislate on subjects not only on the State List, but also on the Concurrent List whereby the non-obstante clause in A. 246(1) operates in the event such ‘reconciliation’ is not possible.
To conclude, betting and gambling fall under Entry 34 of List II-State List of the Seventh Schedule in the Constitution of India, which means that the State has power to enact laws on gambling and betting.. (Additionally, the State Legislature has the authority to make laws on taxes related to betting and gambling under Entry 62 of the State List)
GAMBLING STATUTES AT PLAY
This section enlists some prominent existing statutes that govern the realm of gambling in India, which include, but not limited to, as follows:
The above list is not an exhaustive list and several states have enacted similar laws to regulate gambling in India (online and land-based). One can decipher from the aforesaid that Sikkim along with Goa, Daman and Diu have been the reference point for regulation of gambling in India.
JUDICIARY’S LIBERAL STANCE
Authors Mukul Mudgal and Vidushpat Singhania rightfully distinguish between betting and gambling. They state:
“Gambling is an act or practice of putting monetary stakes on a game of pure chance, whereas betting in sports, is an act of wagering upon an ultimate outcome of an event which involves, predominantly, an element of skill. Whereas gambling is solely based on a game of chance, betting in sports is based on the skill of the participants, although there is an element of chance given that the outcome is uncertain”
Horse racing is a game of skill and not a game of chance
The Supreme Court in the case of Dr. KR Laksmanan v. State of Tamil Nadu had the opportunity of clarifying games that are ‘skill-based’ and games that are ‘chance-based’. It endorsed the opinion cited in the case of ‘‘People of Monroe wherein the Court observed:
“The winning horse is not determined by chance alone, but the condition, speed, and endurance of the horse, aided by the skill and management of the rider or driver, enter into the result…. In our opinion the pari-mutuel system does not come within the constitutional inhibition as to lotteries…. ‘In horse-racing the horses are subject to human guidance, management, and urging to put forth their best efforts to win.’ 
The Supreme Court further echoes the sentiments of the Michigan Supreme Court in the case of Edward J. Rohan v. Detroit Racing Assn. [166 ALR 1246 SW 2d 987] which distinguished between betting on horse racing and lottery to state as follows:
“Under the above authorities it is clear that pari-mutuel betting on a horse-race is not a lottery. In a lottery the winner is determined by lot or chance, and a participant has no opportunity to exercise his reason, judgment, sagacity or discretion. In a horse-race the winner is not determined by chance alone, as the condition, speed and endurance of the horse and the skill and management of the rider are factors affecting the result of the race. The better has the opportunity to exercise his judgment and discretion in determining the horse on which to bet. The pari-mutuel method or system of betting on a horse-race does not affect or determine the result of the race. The pari-mutuel machine is merely a convenient mechanical device for recording and tabulating information regarding the number and amount of bets (Utah State Fair Assn. v. Green [(1926) 68 Utah 251 : 249 P 1016] ), and from this information the betting odds on the horses entered can be calculated and determined from time to time during the process of betting. The recording and tabulating of bets could be done manually by individuals, but the pari-mutuel machine is a more convenient and faster method. The fact that a better cannot determine the exact amount he may win at the time he places his bet, because the odds may change during the course of betting on a race, does not make the betting a mere game of chance, since the better can exercise his reason, judgment, and discretion in selecting the horse he thinks will win. Horse-racing, like foot racing, boat racing, football, and baseball, is a game of skill and judgment and not a game of chance. Utah State Fair Assn. v. Green [(1926) 68 Utah 251 : 249 P 1016].”
Blind uncertainty being the key element of chance
Thereafter, it further relies upon the American case of Harless v. United States [(1843) Morris (Iowa) 169] to elucidate the difference between a game of ‘chance’ and a game of ‘skill’ by reproducing the following text:
“The word game does not embrace all uncertain events, nor does the expression ‘games of chance’ embrace all games. As generally understood, games are of two kinds, games of chance and games of skill. Besides, there are trials of strength, trials of speed, and various other uncertainties which are perhaps no games at all, certainly they are not games of chance. Among this class may be ranked a horse-race. It is as much a game for two persons to strive which can raise the heaviest weight, or live the longest under water, as it is to test the speed of two horses. It is said that a horse race is not only uncertain in its result, but is often dependent upon accident. So is almost every transaction of human life, but this does not render them games of chance. There is a wide difference between chance and accident. The one is the intervention of some unlooked-for circumstance to prevent an expected result, the other is uncalculated effect of mere luck. The shot discharged at random strikes its object by chance; that which is turned aside from its well-directed aim by some unforeseen circumstance misses its mark by accident. In this case, therefore, we reasonably feel disappointed, but not in the other, for blind uncertainty is the chief element of chance. In fact, pure chance consists in the entire absence of all the means of calculating results; accident in the unusual prevention of an effect naturally resulting from the means employed. That the fleetest horse sometimes stumbles in the racecourse and leaves the victory to its more fortunate antagonist is the result of accident, but the gambler, whose success depends upon the turn of the cards or the throwing of the dice, trusts his fortune to chance. It is said that there are strictly few or no games of chance, but that skill enters as a very material element in most or all of them. This, however, does not prevent them from being games of chance within the meaning of the law. There are many games the result of which depends entirely upon skill. Chance is in nowise resorted to therein. Such games are not prohibited by the statute. But there are other games (in) which, although they call for the exercise of much skill, there is an intermingling of chance. The result depends in a very considerable degree upon sheer hazard. These are the games against which the statute is directed, and horse-racing is not included in that class.”
In light of the aforesaid, the Supreme Court in the present case held that horse racing was neither gambling, nor a game of chance as it was certainly a game where ‘skill’ was involved.
Rummy is a game of skill and not a game of chance (unlike “flash” and “brag”)
The Supreme Court in the case ofState of A.P. v. K. Satyanarayana faced a pertinent question: whether the gambling house raided by the police officers in Secunderabad where they found men playing “Rummy” was an offence under the Hyderabad Gambling Act (2 of 1305F). Answering in the negative, it held:
“The game of rummy is not a game entirely of chance like the “three-card” game mentioned in the Madras case to which we were referred. The “three card” game which goes under different names such as “flush”, “brag” etc. is a game of pure chance. Rummy, on the other hand, requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of rummy is a game of entire chance. It is mainly and preponderantly a game of skill. The chance in Rummy is of the same character as the chance in a deal at a game of bridge. In fact in all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack. From this alone it cannot be said that Rummy is a game of chance and there is no skill involved in it. Of course, if there is evidence of gambling in some other way or that the owner of the house or the club is making a profit or gain from the game of rummy or any other game played for stakes, the offence may be brought home. In this case, these elements are missing and therefore we think that the High Court was right in accepting the reference it did.”
Competitions where ‘substantial degree of skill’ is involved is not gambling
The Supreme Court in the case of State of Bombay v. R.M.D. Chamarbaugwala was presented with an opportunity to address and clarify the nature of prize competitions that constitute gambling.’ The word ‘prize competition’ was defined in the earlier Bombay Prize Competitions Tax Act 1939 to include “any other competition success in which does not depend to a substantial degree upon the exercise of skill”. The same definition was reproduced in the Bombay Lotteries and Prize Competition Control and Tax Act 1948 (it replaced the earlier 1939 Act). On interpreting the aforesaid definition of ‘prize competition’, the Court observed:
“On the language used in the definition section of the 1939 Act as well as in the 1948 Act, as originally enacted, there could be no doubt that each of the five kinds of prize competitions included in the first category to each of which the qualifying clause applied was of a gambling nature. Nor has it been questioned that the third category, which comprised “any other competition success in which does not depend to a substantial degree upon the exercise of skill”, constituted a gambling competition. At one time the notion was that in order to be branded as gambling the competition must be one success in which depended entirely on chance. If even a scintilla of skill was required for success the competition could not be regarded as of a gambling nature. The court of appeal in the judgment under appeal has shown how opinions have changed since the earlier decisions were given and it is not necessary for us to discuss the matter again. It will suffice to say that we agree with The court of appeal that a competition in order to avoid the stigma of gambling must depend to a substantial degree upon the exercise of skill. Therefore, a competition success wherein does not depend to a substantial degree upon the exercise of skill is now recognised to be of a gambling nature. From the above discussion it follows that according to the definition of prize competition given in the 1939 Act as in the 1948 Act as originally enacted, the five kinds of prize competition comprised in the first category and the competition in the third category were all of a gambling nature. In between those two categories of gambling competitions were squeezed in, as the second category, “competitions in which prizes were offered for forecasts of the results either of a future event or of a past event the result of which is not yet ascertained or is not yet generally known”. This juxtaposition is important and significant and will hereafter be discussed in greater detail.”
Thus, once can decipher that any game which entails a degree of skill set to be deployed to achieve a certain outcome, it will fall under the category of a ‘skill-based’ game not a ‘chance- based’ game. Moreover, even if a game exhibits facets that have an element of chance, it wouldn’t be construed as ‘gambling’ provided the game itself is preponderantly a game of skill.
Games that are played for stakes will fall outside the ambit of the gambling acts
The Andhra Pradesh High Court has further expanded the boundaries of ‘skill-based’ games to exclude them from the category of outright gambling games. The Court in the case of D. Krishna Kumar v. State of A.P. observed:
“From the above clarification of the Division Bench of this Court also, it is clear that conducting card room where members and guests play the game of rummy (13 card game) with stakes/syndicate would not attract the provisions of the Act. That must be the reason why the writ petitioner club was permitted to run the card room for members and guests playing the game of rummy (13 card game) with stakes/syndicate by the Division Bench. In view of Sec. 15 of the Act, the provisions of the Act do not apply to game of rummy, which is to be treated as a game of skill only. Therefore, the question whether the management of the club or the club is making profits, and what is the rate of profit that is being made from out of the game of rummy with 13 cards/syndicate may not be of any relevance. Therefore, even if the petitioners, who are running the club that was raided by the police, were making profits by allowing persons to use the premises for playing the game of rummy with 13 cards/syndicate, they cannot be said to be running a ‘common gaming house’ as defined in Sec. 3 of the Act, because Sec. 3 of the Act, in view of Sec. 15 of the Act, does not apply to a place where Rummy is being played.”
As exemplified hereinabove, the application of the various gambling acts to various games will depend on the degree of skill involved as opposed to it being a mere game of chance. From the aforesaid observations of the Supreme Court and the High Courts, the author opines that a liberal interpretation would be accorded to classifying a given game as a game of skill, as long as one can evidently prove that even a slight iota of skill is involved in playing the game negating the outreach of chance (not necessarily in toto). The author has intentionally not addressed issues related to esports, online betting and proposed reforms in the concerned space as the intent of the present paper is to draw the contours of regulatory framework within which the latest developments in this realm are challenging to operate. Sports and online betting is a topic that merits and mandates extensive attention and coverage, which the author endeavours to address in future publications. But at the outset, the author firmly opines that legalization of betting in sports and online games (where skill is involved) merits legalization all across the country. The potential for the government to generate a consistent revenue making stream and streamline the grey market that already exists (which introduces its own societal perils) are just some of the factors that deserve serious consideration.
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 Supra Note 2
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 Aditya Shivkumar, ‘Roll of a Dice: The ball is in motion’ (2013) PL Sep 59, SCCONLINE, p. 60.
 Id, at 60
 Id, at 60
 Id, at 61
 Gerard L Muller (translated), Nala and Damatyanti: A tale of love, gambling, and Adevnture in Ancient India
 Arthashastra on Gambling Regulation, 350-283 B.C. (as appearing in the book titled “Law and Sports in India
 Id, at 227
 Constitution of India, Article 246
 Union of India v. H.S. Dhillon, (1971) 2 SCC 779
 State of Kerala v. Mar Appraem Kuri Co. Ltd., (2012) 7 SCC 106
 Supra Note 14, at Entry 34 of the State List
 Supra Note 14, at Entry 62 of the State List
 Ranjana Adhikari and Shashi Shekhar Misra, Gambling Laws and Regulations India 2022, (last visited Oct. 04, 2022, 9:45 pm), https://iclg.com/practice-areas/gambling-laws-and-regulations/india
 Mukul Mudgal and Vidushpat Singhania, Law and Sports in India – Developments, Issues and Challenges, at 229
 Id. at 233
 Supra Note 21. at 246
 Supra Note 21, at 246
 Supra Note 21, at 247
 State of A.P. v. K. Satyanarayana, (1968) 2 SCR 387
 State of Bombay v. R.M.D. Chamarbaugwala, 1957 SCR 874
 Id. paragraph 9
 Supra Note 29, paragraph 17
 Supra Note 29, paragraph 17
 D. Krishna Kumar v. State of A.P., 2002 SCC OnLine AP 810
 Id. paragraph 14