SPORTS BETTING LAWS IN INDIA
ABSTRACT
The paper examines the changing legal landscape surrounding sports betting in India against the backdrop of burgeoning international and online betting platforms and online fantasy sports. While bets are regulated largely by outdated laws such as the Public Game Law of 1867, and online sports betting exists in a legal gray area, its legal status is largely ambiguous due to the absence of central legislation. The paper illustrates the varying legal status of sports betting, both in terms of state regulatory measures or absence thereof, recent court decisions interpreting sports betting as gambling, and the recommendations of the Law Commission of India (2018) advocating for legalization and regulation of sports betting. The paper makes a comparison with regulatory practices in jurisdictions in which sports betting is licensed and regulated (e.g., UK, USA, Australian jurisdictions) in order to clarify what potential risks unregulated betting poses—addiction, corruption or fraud, young people accessing betting sites, etc. The paper argues we need a collegiate regulatory authority established at a national level to prevent illegal operations connected to unregulated betting and supports establishing a legal framework for sports betting that distinguishes between games of luck and skill, promotes responsible gaming initiatives, and commits to oversight at a national level.
KEY WORDS
Sports Betting in India, Public Gambling Act, 1867, Online Fantasy Sports, Game of Skill vs Game of Chance, Central Gambling Regulator, IT Rules and Online Platforms, Comparative Betting Laws
INTRODUCTION
Sports betting (mostly on cricket) has become a central part of the Indian consumer as well as an activity that exists in an opaque field of legality. The wide-ranging growth of online platforms, as well as a multitude of fantasy gaming apps, has made the line that separates legal entertainment and illegal gambling increasingly unclear. Sports bets exists as an illegal massive mass economy in India. But, the legality of sports betting is the subject of debate and remains unregulated in a legal sense at the national level. This article seeks to critically analyze the legal framework around sports betting in India, summarize judicial rulings, review legal regulation shortfalls, and propose legal changes to keep pace with technology.
LEGAL FRAMEWORK OF GAMBLING IN INDIA
The public game in India is mainly governed by the Public Game Law of 1867. This is a legacy law that predates independence through which public gambling houses are prohibited and gambling in such houses is criminalized. While the act may criminalize the act of gambling, it fails to encapsulate the myriad means of today’s betting, especially online betting.
Numerous states have taken the path of self -regulation within these permissible games of illegal versus ability coincidence games. By creating definitions surrounding games of skill versus games of chance, lawmakers created confusion for interpretation of fantasy sports and online websites. The issue lies within the Public Gambling Act since it cites the definitions for both games of skill and games of chance without a clear distinction or definition.
The Information Technology Act of 2000 does delves into the meaning and definition for gambling or betting. Given the lack of a central law concerning online sports betting, it has been left up to the individual states to govern and regulate.
CONSTITUTIONAL POSITION AND THE FEDERAL CHALLENGE
“Betting and gambling” location in admission 34 of the Indian Constitution State List (List II, Seventh Schedule), Thus enabling states to become the only MLA of the subject. However, with the phenomenon of online and cross-border platforms, the limitations of pure territorial legislation by states have clearly emerged. Online betting simply crosses state territories and creates gaps in the legal framework when there are inconsistencies with laws in a neighboring state. This fragmentation runs counter to the constitutional scheme of uniform economic regulation and makes for a compelling proposal for statutory legislation at the Centre that is coordinated.
STATE REGULATION
According to the Constitution of India, betting and gambling is included in the entry 34 of the state list (List II), Seventh Schedule, and gives states special rights to enact laws on the subject. This has led to a disjointed legal landscape, where different states have different sets of rules:
• Goa, Daman and Diu and Sikkim have legalized and regulated some forms of gambling (Casino and online
game);
• Sikkim has also issued licenses for operators, who offer online sports betting after being enacted.
Sikkim Online Gaming (Regulation) Act, 2008;
• States like Telangana and Andhra Pradesh have enacted stringent laws outlawing online gambling entirely;
• Nagaland, has enacted the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 and legalized online games of skill.
This state-based regulatory style has created inconsistencies and loopholes which are taken advantage of by online operators offering services outside their state of jurisdiction.
ONLINE SPORTS BETTING AND DIGITAL PLATFORMS
The last ten years have witnessed a surge of online fantasy sports sites like Dream11, My11Circle, MPL, and BalleBaazi. Users of these platforms create virtual teams and win real money depending upon the performance of real players. They claim legality by positioning what they provide as a game of skill instead of a game of chance.
In the case of Varun Gumber v. Union of India (2017), the Punjab and Haryana High Court ruled that Dream11 involved significant skill, and therefore, was not gambling. Other High Courts have subsequently complied with the ruling of the Punjab and Haryana High Court, and the Supreme Court denied the writ of certificate Strengthen the legal status of platforms, thus refusing to intervene with a high court stand sports games
These platforms are co -existed in an inauspicious environment, such as Betway, 1xbet and with international betting sites Parimatch that works like “skill games” in a grey area of legality as they are hosted in offshore jurisdictions leading to enforcement issues.
The absence of a central authority to manage licensing has allowed such platforms to flourish as there is no entity to enforce accountability on a national level.
CASE UPDATE: TAMIL NADU ONLINE GAMING PROHIBITION ACT, 2022
The state of Tamil Nadu passed the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act in 2022. It sought to prohibit those games where monetary stakes are involved. However, since the law was enacted, it has faced opposition from operators of gaming industries. In 2023, the Madras High Court upheld several provisions of online gambling and online regulation of Tamil Nadu Sports Act and a blanket restriction that was organized on skill-based gaming platforms would be required a narrow tailoring and constitutional justification. This illustrates the ongoing contestation by judiciary between an appropriate moral compass, set by a state-legislated moral compass as opposed to the liberties afforded by constitutional Article 19(1)(g) liberties.
RECENT DEVELOPMENTS AND DRAFT BILLS
First, new developments on developments and draft bills Law Commission of India Report No. 276 (2018):
The Law Commission produced a report called “Legal Framework: Gambling and Sports Betting including in Cricket in India” and noted that illegal betting persists in spite of legal prohibitions against betting. The Commission determined that legal gambling may be a superior solution. The report recommends:
– Legalizing betting, with some sort of regulatory controls
– Licensing the operators
– Taxing the revenues
– Establishing a regulatory authority.
However, there is yet any central legislation developed and enacted based on the Law Commission’s report.
Draft Online Gaming Bills: There have been several private members’ bills introduced in Parliament, even discussion of some of them, to regulate online gaming: including sports betting. So far, no draft bill has become law. In March 2023, the Ministry of Electronics and IT (MeitY) published guidelines for online gaming intermediaries, however, the guidelines do not apply strictly to betting and gambling.
MeitY 2023 GUIDELINES & POLICY GAP
The Ministry of Electronics and Information Technology (MeitY), published the rules for online gaming intermediaries in March 2023 under the Information Technology Act, 2000. The guidelines outlined were intended to regulate online games where the user deposits funds on the platform, expand
(1) The verification of users,
(2) Grievance redressal processes, and
(3) Protection of children.
The guidelines specifically did not apply to betting or gambling platforms, therefore meaning much of the online betting ecosystem is unregulated. This further allows offshore real money betting platforms to operate without any accountability or regulation.
ARGUMENTS FOR – LEGALIZATION, ARGUMENTS AGAINST LEGALIZATION
ARGUMENTS FOR:
– Generates revenue: Legalizing betting will produce tax revenues from betting to the government.
– Presenting jobs: The gaming industry generates thousands of direct and oblique jobs.
– Client protection: Presents legal gaming regulation, transparency, enchantment mechanism and fair recreation
– Reducing the illegal market: Legal betting options will undermine unregulated betting networks and criminal gambling.
ARGUMENTS AGAINST:
– Social injury: Can cause addiction, mental health injuries and family disruption.
– Youth at risk: Legal betting may attract young persons to gambling.
– Morality and ethics: Objectors suggest gambling promotes greed and laziness.
– Match-fixing: Legal betting may still provide the means for match-fixing, unless carefully managed.
JUDICIAL PERSPECTIVE
The Indian judiciary has taken an important role in interpreting gambling laws with respect to new technology:
– Dr. K.R. Lakshmanan v. State of Tamil Nadu (1996) – The Supreme Court held that horse racing is in the nature of a game and is a skill and not gambling.
– State of Bombay v. R.M.D. Chamarbaugwala (1957)– differentials games of skill from games of chance.
– Varun Gumber v. Union of India (2017) – advocated Dream11 as a game of skill.
– The Supreme Court has often noted that purposeful action needs to be taken to make comprehensive legislation for new biological forms of betting.
JUDICIAL INSIGHT: MAHALAKSHMI CULTURAL ASSOCIATION V. STATE OF T.N. (2012)
In Mahalakshmi Cultural Ass’n v. State of T.N., the Supreme Court held that games that involve a considerable degree of skill, such as rummy, are protected as a commercial activity constitutionally even when stakes are placed on the game. This decision furthers the understanding that, in terms of dark regulation of gaming, any regime should impose some form of distinction for skill games and chance games in relation to Article 19(1)(g).
COMPARATIVE STUDY: SPORTS BETTING REGULATION IN OTHER JURISDICTIONS
To understand what India could do to adopt a fully developed regulatory model, it is helpful to see how other jurisdictions have properly regulated sports betting through the law and regulated authority.
UNITED KINGDOM:
The United Kingdom is one of the most fully developed and well -regulated gambling markets in the world. The United Kingdom gambling marketplace is regulated through the United Kingdom playing commission under the playing Act, 2005. This regulatory body makes sure all operators comply with anti-money laundering legislation, gambling responsibly, and protect the customers. Both online and offline betting may be permitted by law, but there are strict licensing requirements, periodic audits, and transparency obligations.
UNITED STATES:
The U.S. approach to regulating sports betting has changed completely since the Supreme Court’s 2018 ruling of Murphy v. NCAA, which reversed the federal prohibition on sports betting. Now, states can be valid and regulate sports betting. States like New Jersey, Nevada, and Pennsylvania have created well-regulated, successful, sports betting markets. The state regulates the betting operations, betting taxation, and compliance.
AUSTRALIA:
On line sports making a bet is regulated below the Interactive Gambling Act, 2001 in Australia. Operators are required to hold licenses from the government and comply with restrictions on in-play betting and advertising. The Australian Communications and Media Authority actively oversees the market and is responsible for maintaining ethical standards, age verification, and responsible gambling measures.
These examples demonstrate the potential for a legally sustainable form of sports betting, conducted responsibly from a social standpoint, if proper licensing, regulation, and enforcement take place.
COMPARATIVE INSIGHT: SINGAPORE’S CONTROLLED BETTING REGIME
Singapore adopts a tightly regulated betting model by way of its Remote Gambling Act, 2014. Only government registered operators, e.g., Singapore Pools, legally offer online bet coverage and they must operate under regulatory conditions prescribed by the Act such as age verification, anti-money laundering protections, and player protections. Singapore’s model shows how central regulation can work alongside public welfare aims.
NEED FOR A CENTRAL REGULATOR
Given the fragmented state level regime and proliferation of online platforms, a centralized regulatory regime is necessary in India. A proposed Central Gambling Regulatory Authority (CGRA) could utilize an institutional framework similar to the Security Exchange Board of India (SEBI) or a statutory authority such as the TRAI.
The CGRA could draw upon international regulatory best practice to:
– Provide Pan-India licenses for online and offline operators
– Regulate for compliance with responsible gambling standards
– Regulate to prevent gambling advertising
– Adjust to screen collaboration with financial regulators to limit tax evasion and money laundering.
– Monitor and report compliance with age-verification, self-exclusion and consumer complaints
Centralizing a gambling regulator would create uniformity and transparency, as well as assist in dismantling illegal betting networks that cross state boundaries.
TECHNOLOGICAL AND FINANCIAL RISKS IN ONLINE SPORTS BETTING
Online sports betting is easily accessible and entertaining but also comes with several serious technological and financial risks.
– Unregulated and offshore sports betting sites often only allow payments in cryptocurrency which makes them difficult to trace, making it easier for money laundering and other illicit financial and identity theft to occur.
– Many unauthorized illegal websites or apps pose serious cybersecurity threats including data theft, phishing and identity theft.
– On many illegal sites there are no KYC norms to protect children from gambling.
– Problem gambling behavior characteristics like addiction and urge to bet are more difficult to detect and control when gambling online.
These risks could be reduced via the implementation of mandatory user authentication, financial thresholds and limits, audit trails, or automated real-time surveillance systems regulated by a central regulator.
RBI AND CRYPTOCURRENCY-BASED OFFSHORE BETTING
The Reserve Bank of India (RBI) issued a warning against the usage of cryptocurrencies for unlawful betting purposes. Offshore betting sites operate with Bitcoin and other virtual assets for deposits, leading to illegal usage of funds, accounting practices, anti-money laundering policy violations, and an inability to identify the source of funds because they are not tied to any bank. They are not observing the KYC standards (know your customer) both offshore and onshore. These sites and new ways to access them pose a national security and financial integrity threat in the form of untraceable transactions. In 2023 the RBI reiterated the need for comprehensive supervision of virtual currency transactions.
MOVING FORWARD: A REASONABLE APPROACH
Legalization of sports betting in India does not equate to fostering gambling in an unencumbered manner. It should be understood as a reasonable approach – balancing time and money in the revenue and innovation space with social responsibility and ethical regulation.
This balanced approach should consist of:
– The implementation of an all-encompassing national law that establishes a clear distinction between gambling and skill-based gaming
– The establishment of statutory regulatory authority through which licenses can be obtained, as well as monitor compliance
– The implementation of age restrictions, usage maximums and responsible gaming features
– More advantageous virtual surveillance to fight offshore unlawful making a bet
– Important public attention campaigns to deliver interest to the risks caused by irresponsible playing.
THE CASE FOR A CENTRAL GAMBLING REGULATORY AUTHORITY (CGRA)
Due to the fragmentation of the regulatory landscape, scholars have put forth the idea of a Central Gambling Regulatory Authority (CGRA) , which could trade pan-India licenses and regulate compliance, tax regimes, and assist governments with anti-money laundering laws, like SEBI or TRAI. An external body would encourage rules harmonization between states, allow data to be exchanged between law enforcement bodies and increase inter-country cooperation. Australia and the United Kingdom case experiences suggest where there is a universal regulatory governing authority, marketplaces will develop that are safe, verifiable, and regulated.
CONCLUSION AND SUGGESTIONS
The legal framework for sporting betting in India is a collection of various and varied jurisdictions that are largely outdated and ineffective when it comes to online and offline betting. While some of the High Courts have addressed fantasy sports, the lack of a uniform national law creates uncertainty in law and present the real barrier to growth in India.
To address these issues, India must contemplate central legislation that:
– Defines betting and gambling.
– Distinguishes between a game of skill and a game of threat.
– Creates a licensing regime.
– Minimum age limits and KYC Limits.
– Consumer grievance redressal.
Instead of prohibition, regulation will reduce illegal activity and give players confidence that weed is responsible gaming in India with its digitization process in versatile and under a wide range of recreational activities.
REFERENCES: –
1. The Public Gambling Act, No. 3 of 1867, INDIA CODE (1867).
2. The Information Technology Act, No. 21 of 2000, INDIA CODE (2000).
3. INDIA CONST. art. 246, sch. VII, list II, entry 34.
4. The Sikkim Online Gaming (Regulation) Act, No. 18 of 2008, SIKKIM ACTS (India)
5. The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 (Act No. 3 of 2016) (India).
6. Gambling Act 2005, c. 19 (U.K.).
7. Interactive Gambling Act 2001 (Cth) (Austl.).
8. Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 S.C.C. 226 (India).
9. State of Bombay v. R.M.D. Chamarbaugwala, A.I.R. 1957 S.C. 699 (India).
10. Varun Gumber v. Union Territory of Chandigarh & Ors., C.W.P. No. 7559 of 2017 (P&H High Court Apr. 18, 2017).
11. Mahalakshmi Cultural Association v. State of T.N., (2012) 12 S.C.C. 713 (India).
12. Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018) (U.S. Supreme Court).
13. Law Comm’n of India, Report No. 276, Legal Framework: Gambling and Sports Betting Including in Cricket in India (2018), available at https://lawcommissionofindia.nic.in/reports/Report276.pdf.
