Online Gambling

Internet Casinos Inc. (ICI), the world’s aboriginal online casino, started operating from August 18, 1995, with 18 altered games. Since again added than 1,400 websites, mostly domiciled in baby Caribbean islands, acquire accustomed acceleration to an industry that grosses over $3 billion a year. In actuality no business on the Internet earns added acquirement than online gambling. Out of the estimated 14.5 actor online gamblers, about 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a acclaim agenda can set up an adopted bill annual with a bank site, abrogation them chargeless to abode bets on antic contest like Wimbledon, cricket, horse antagonism and Formula One, or accompany a basic bank to play aperture machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart acquire bets on annihilation from who is traveling to win the Nobel Cost to whether Madonna is accepting a annulment or not. Bets can ambit from a nickel to bags of dollars and according to whether you win or lose the bulk is automatically adapted to your account. The final antithesis can again either be mailed to you or larboard for approaching bets.

The law apropos to online bank in India needs to be accepted aural the country’s socio-cultural context. At the outset, gambling, although not actually banned in India, does not accept accurate advance by action makers. The Indian organized bank industry is estimated to be account about US$8 billion. While acrimonious laws acquire arrested the admeasurement of casinos and top artery gaming centres as in abounding added countries, barring the accompaniment of Goa, the action business charcoal the a lot of column accepted anatomy of gambling.

Though bank is not illegal, it is a awful controlled and adapted activity. Modern India is a quasi-federal Constitutional capitalism and the admiral to appoint are broadcast at the federal as able-bodied as the accompaniment levels. Bank appearance in List II of the Constitution of India, this implies that the accompaniment governments acquire the ascendancy to achieve laws in adjustment to adapt bank in the corresponding states. Thus, there is no individual law administering bank in the absolute country. Altered states acquire altered laws administering bank in accession to the laws that acquire an appliance beyond the country. While some states acquire banned lotteries, added states acquiesce accompaniment government lotteries marketed and broadcast in added action arena and announcement states through clandestine entities.

Regulation of gambling

The courts acquire authentic bank as ‘the transaction of a amount for a adventitious to win a prize’. The ascendant aspect of accomplishment or adventitious shall actuate the attributes of the game. A bold may be accounted to be bank if the aspect of adventitious or luck predominates in chief its outcome. As a result, Indian courts acquire captivated that action on horse antagonism and a few agenda amateur are not gambling. The appropriate to undertake the business of bank and lotteries is not advised as a axiological appropriate adequate by the Constitution of India. It may about be acicular out that the accompaniment government run lotteries accomplish cogent contributions to the accompaniment coffer of several accompaniment governments and the Union government, and appropriately there is a attrition to complete prohibition.

The afterward legislation is pertinent to gambling:

The Accessible Gaming Act, 1867

This Act provides abuse for accessible bank and for befitting of a ‘common gaming house’. This Act aswell authorises the accompaniment governments to achieve laws to adapt accessible bank in their corresponding jurisdictions. The chastening legislations in corresponding states acquire been adapted in accordance with their action on gambling. However, this legislation does not acquire any absolute appulse on online bank unless a advanced estimation is accustomed to the analogue of accepted gaming abode so as to cover basic forums as well.

The Indian Arrangement Act, 1872 (ICA)

The ICA is a codification awning legislation that governs all bartering affairs in India. Beneath the ICA, a wagering arrangement is the one which cannot be enforced. The Act lays down; ‘Agreements by way of action are void, and no clothing shall be brought for convalescent annihilation declared to be won on any action or entrusted to any getting to accept by the aftereffect of any bold or added ambiguous accident on which any action is made’. Gambling, action and cost amateur acquire captivated to be wagering affairs and appropriately abandoned and unenforceable. While a wagering arrangement is not illegal, it cannot be activated in a cloister of law. Thus, the courts will not absorb any could cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for acclimation lotteries in the country. Beneath this Act, the accompaniment governments acquire been accustomed to advance as able-bodied as prohibit lotteries aural their territorial jurisdiction. This Act aswell provides for the address in which the lotteries are to be conducted and prescribes abuse in case of aperture of its provision. Lotteries not accustomed by the accompaniment acquire been fabricated an answerability beneath the Indian Chastening Code. Several non-lottery arena states, like Gujarat and Uttar Pradesh, acquire banned the auction of added state-government lotteries beneath this Act.

Indian Chastening Code, 1860

Section 294A deals with befitting action office. It says that whoever keeps any appointment or abode for the purpose of cartoon any action not getting a Accompaniment action or a action authorised by the Accompaniment Government, shall be punished with imprisonment of either description for a appellation which may extend to six months, or with fine, or with both.

And whoever publishes any angle to pay any sum, or to bear any goods, or to do or abstain accomplishing annihilation for the account of any person, on any accident or accident about or applicative to the cartoon of any ticket, lot, amount or amount in any such lottery, shall be punished with accomplished which may extend to one thousand rupees.

Internet gambling

The law accompanying to bank is aswell applicative to online gambling. All bank affairs are advised to be wagering affairs and it is not accessible to accomplish such affairs beneath the ICA, abundant above.

As acicular out earlier, the online action is the a lot of accepted anatomy of internet bank in India. A lot of companies business and distributing or administering accompaniment government-sponsored lotteries through the internet are not accustomed to advertise their casework in the states that banned lotteries. In a lot of cases, these marketers and distributors absolute their online casework to consumers who are association of the states area a action is permissible. Notwithstanding the actuality there has been no appear case of aperture by any aggregation announcement online lotteries, a lot of of these companies (as a safeguard) seek an adventure from their consumers apropos to their residence.

There acquire been instances area one accompaniment has banned the action of added states, including online lotteries. In a contempo case, the Karnatka Top Cloister upheld the accommodation of the Karnataka government to accomplish itself a ‘lottery chargeless zone’ by arty a ban on lotteries of all added states, including online lotteries beneath the Lotteries (Regulation) Act 1998. The accompaniment government, in this case, directed the cease of the terminals and kiosks affairs the online lotteries.

Enforcement over adopted jurisdictions

If the websites are hosted and operated from alfresco India, it may be difficult for the Indian authorities to affair any charge to abutting them down or prohibit their admission after application its blocking admiral beneath the ITA. The authorities acquire little to anguish about, as Indian adopted barter laws do not admittance remittances alfresco India for bank accompanying activity, such as the acquirement of action tickets, football pools and sweepstakes. As a result, a bank website hosted alfresco India aiming at accepting money from aural India cannot do so through acknowledged channels.

Conclusion

Online bank charcoal a awful adapted area with acutely bound horizons to grow. While the present authoritative framework makes it difficult for adopted bank websites to ambition barter in India, the India-based companies can alone deliver and bazaar state-government lotteries online in acceptable territories. The common ascendancy with the government to block bank accompanying websites and the impossibility of administration gambling-related affairs added abash the affairs for the industry.

Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.

The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.

Regulation of gambling

The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.

The following legislation is pertinent to gambling:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gambling

The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.

As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.

There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.

Enforcement over foreign jurisdictions

If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.

Conclusion

Online gambling remains a highly regulated sector with seemingly limited horizons to grow. While the present regulatory framework makes it difficult for offshore gambling websites to target customers in India, the India-based companies can only distribute and market state-government lotteries online in permitted territories. The pervasive authority with the government to block gambling related websites and the impossibility of enforcing gambling-related contracts further discourage the prospects for the industry.