ABSTRACT
The industry of sports betting has boomed since as the number of users has been rising at a very rapid pace. This paper explores into the legal intricacies of Indian sports gambling, with an emphasis on the debate over betting’s legality. It investigates the growth of sports betting and the effects of the Public Gambling Act of 1867, which is a colonial law regulating sports gambling and betting in India. It also refers to the rise of internet platforms such as Dream11. It further examines the differences between games of skill and games of chance within the Indian legal context, with a focus on legal and regulatory concerns. The topic of match-fixing in sports betting, as well as the financial consequences of gambling addiction, are examined to emphasise the complex effects. Reflecting on foreign regulatory models from the United Kingdom, the United States, and Australia, the paper proposes revising laws, establishing regulating organisations, and promoting responsible gambling practices to meet the complexity of sports betting in India in the current times. Ultimately, it proposes for a balanced approach to legalising and regulating sports betting in India that takes into account legal, economic, and social factors.
KEYWORDS
Sports Gambling, Legality of Betting, IPL, Dream11, Fantasy sports, Game of skill, Game of chance
INTRODUCTION
Sports gambling and betting – a process of prediction of the sports results and staking money on those outcomes, are an inseparable part of people’s lives. Over the years, this practice which involves placing of bets on the outcomes of sporting activities or any other activity ranging from mere friendly bets to professional betting legally or illegally has experienced tremendous changes.
The term Gambling can be defined as the activity of betting money, for example in a game or on a horse race. The country of India has a historical legacy when it comes to gambling, starting as early as to be written in the epic tale of ‘Mahabharata’. The text describes how Yudhishtir, the eldest son of Pandu had a penchant for gambling which led to the game of dice between the Pandavas and Kauravas giving rise to the greatest war to be ever fought in the history of mankind. One of the most gripping scenes in the Mahabharata shows Yudhishtir losing not only his whole kingdom, but also his brothers and wife in the ‘Game of Dice’. This serves as the prime illustration of the addiction, attraction and destruction by gambling. Sports gambling involves a wide range of activities, including traditional betting on the outcomes of sporting events, fantasy sports leagues in which players choose teams and receive points based on real-world performance, and online betting platforms. Sports gambling has an impact on economic, social, and legal aspects of society in addition to providing entertainment.
In India, the colonial law – The Public Gambling Act 1867 prevails to legalize most games of the skill performed in the country while restricting most types of gambling. This distinction has resulted in a complex legal landscape in which the legality of various types of betting is constantly contested. The popularisation of Cricket and the introduction of IPL in India gave rise to the main centre of betting. The emergence of online betting apps and websites and the fantasy sports leagues like Dream11, MPL, and My11Circle have worsen the scenario and has raised questions related to regulation, taxation and consumer rights.
RESEARCH METHODOLOGY
This paper is of descriptive nature and the research is based on primary as well as secondary sources for the deep analysis of the Legality of Sports Gambling and Betting in India. Primary sources like legislative documents, court judgments, and official reports and Secondary sources like newspapers, journals, and websites are used for the research. Comparative studies with other jurisdictions are also utilized to provide a global perspective.
REVIEW OF LITERATURE
- Aviral’s discussion on “The Regulation of Fantasy Sports in India” sheds light on the intricate aspects of governing fantasy sports, as shared through a Times of India Blog. The article delves into the legal nuances and hurdles within the evolving realm of fantasy sports platforms in India, providing valuable insights and analysis (Times of India Blog, 2023).
- Agrawal and Das offer a comprehensive analysis of the “Legalization of sports betting in India” on The Law Brigade platform. Their research delves into the potential impact, challenges, and advantages of legalizing sports betting in India, presenting a thorough overview of the legal framework and regulatory considerations (The Law Brigade, 2019).
- The Law Commission of India’s Report No. 276 examines the “Legal Framework: Gambling and Sports Betting, including Cricket in India”, providing an extensive review of the legal landscape surrounding sports betting. The report offers a detailed analysis of current regulations, obstacles, and suggestions for regulating sports betting in India (Law Commission of India, 2018).
- FICCI’s report on “Regulating Sports Betting in India” offers valuable insights into the complexities of regulating sports betting. The report delves into the legal, economic, and social dimensions of sports betting in India, exploring the challenges and opportunities in regulating the industry (FICCI, 2012).
CURRENT LEGAL FRAMEWORK OF GAMBLING IN INDIA
The legal status of sports betting in the country is mainly anchored to the Public Gambling Act of 1867 which was promulgated in the British colonial period and generally outlaws gambling in India. This Act also prohibits the running of public gambling houses and prescribes penalties for their use or running. Nevertheless, some certain exclusions for instance, games of skill are permitted in the process leading to the complexity of legal position.
The seventh schedule Entry 62 of the Constitution of India provides the sovereign rights to a state legislature to enact the laws on taxes and gambling. For example, Goa and Sikkim states allow limited kinds of gambling, such as casinos and sports betting, while the other states retain severe bans. Consequently, it can be asserted that the principal purpose of gambling legislation at different tiers is the prohibition and control of gambling in ‘Public Gambling’ establishments.
An Important classification that exists under the Indian law is the classification based on games of skill and games of chance. The Supreme Court of India has ruled that games of skill—like fantasy sports—do not fall under the purview of gambling laws due to the preponderance of skill involved in such games. On the other hand, games involving chance including the typical wagering on sporting events falls under the provisions of the Public Gambling Act. This distinction is crucial especially given that many new Internet based sites where people are able to place bets on players or teams are legal since they engage in online skill-based gaming.
ANALYSIS OF SPORTS GAMBLING IN INDIA
The legality of sports betting in India, particularly in cricket, remains a contentious issue. In accordance with The Public Gambling Act of 1867, various types of legal gambling are banned with an exception to games that are based on the player’s skill – games of skill. According to the law of India and particularly, the Supreme Court, horse racing, where there is pre-requirement of essential skill, is not considered as gambling. Nevertheless, placing bets on different events, in particular sports, such as cricket, is considered unlawful under this Act.
Cricket stands as the most dedicated sports in the hearts and minds of Indian population. The country passionately refers to it as a religion and the most recent example of it was how the Many fans of the Indian cricket team flooded the Mumbai’s Marine Drive for the victory parade of the T20 World Cup. Cricket has especially taken a new dimension with the introduction of IPL. The IPL with its considerable wealth, involvement of international players and high viewership has emerged as the centre for legal as well as illegal betting. It has been involved in various betting and match-fixing controversies. The 2013 IPL spot-fixing incident, which involved important players and team executives, exposed deeply rooted problems in the system and called for more laws and control.
Sports betting is vigilantly tracked by regulatory bodies. The Board of Control for Cricket in India (BCCI), as the sport’s regulating body, holds vast authority over its management, including concerns of betting and corruption. The BCCI has developed a number of measures to address illegal betting and match-fixing, including anti-corruption units and stringent codes of conduct for players and officials. The effectiveness of these protective measures, however, has been questioned in light of the recurring controversies. Furthermore, the emergence of online fantasy sports platforms such as Dream11, MPL, and My11Circle has further complicated the legal stance.
ONLINE FANTASY SPORTS – LEGAL OR NOT?
Fantasy sports, also called rotisserie sport, involve an online game where participants virtually manage a team of actual athletes by drafting, trading, and selecting their lineup. This interactive game mimics real sports matches, providing players with the experience of predicting outcomes based on the performances of actual athletes.
According to a report published in February 2022 by the Federation of Indian Fantasy Sports (FIFS) and Deloitte, the fantasy gaming industry in India is valued at over INR 34,000 crore. With investments driving growth, the industry serves more than 13 crore registered users, with a significant portion of revenue, 85%, attributed to cricket. Football follows as the second most popular sport, contributing 6.32% to the revenue share. The FIFS projects the fantasy sports sector to reach INR 1,65,000 crore by the fiscal year 2025. The rapid expansion of the fantasy sports industry in recent years has posed challenges in regulation, as different states have varying laws, causing confusion among the public.
Game of Skill vs Game of Chance
The Supreme Court of India in the case of Dr. K. R. Lakshmanan v. State of Tamil Nadu & Anr. stated that, “Gambling in a nut-shell is the payment of a price for a chance to win a prize. Games may be of chance, or of skill, or of skill and chance combined. A game of chance is determined entirely or in part by lot or mere luck. In these games, the result is wholly uncertain and doubtful. A game of skill, on the other hand – although the element of chance necessarily cannot be entirely eliminated – is one in which success depends principally upon the superior knowledge, training, attention, experience, and adroitness of the player.” Therefore, in a game of skill, the probability of success depends on the skill of the participants; it is not dependent on luck which is the situation concerning a game of chance.
Fantasy sports are viewed as games of skill because they involve developing strategies and utilizing player knowledge, skills that are absent in games of chance. Another judgement was recently delivered by the Punjab and Haryana High Court in the year 2017 for the particular case of Shri Varun Gumber v. Union Territory of Chandigarh and Ors., that has pointed out to the definition of fantasy sports stressing that such games hinge on the skill rather than chance.
In September 2022, to remove the existing ambiguity, the Supreme Court rejected Avinash Mehrotra’s petition against daily fantasy sports in India. The court was in agreement with the assertion that games such as Dream11 comprise some level of skill and are protected under the Constitution’s Article 19(1)(g).Also, in 2023, considering it is a separate form of activity than betting and gambling, the Rajasthan High Court provided interim relief to an online platform, Myteam 11 for online gaming activities.
These court rulings have had a significant influence on the fantasy sports business, offering a legal protection against gambling allegations and allowing platforms to operate with more confidence. As a result, this sector has expanded significantly, gaining substantial financing and a quickly growing user base.
INTERNATIONAL PERSPECTIVE
Currently, almost all countries have taken three different measures to control gambling as well as betting activities. The countries that put a lot of emphasis on religious decency usually consider all forms of gambling as prohibited while on the other hand, the countries view gambling and betting as a business that creates trade and revenue and equally generates tourism and employment. However, some countries are in between these two extremes while permitting gambling within the controlled atmosphere; thus, such nations earn a lot of revenue from the taxes imposed on these related activities.
- United Kingdom
The United Kingdom takes gambling regulation seriously, with one of the most comprehensive frameworks in the world. The Gambling Act of 2005 established The UK Gambling Commission which oversees all gambling activities to ensure fairness, prevent crime, and protect vulnerable individuals. The focus is on stringent regulations, consumer protection, and responsible gambling. Betting operators must follow strict rules to obtain licenses, maintain high advertising standards, and put in place measures to prevent gambling addiction.
- United States of America
Over time, the United States has undergone a major change in terms of legislations relating to sports betting. Before individual states started to regulate sports betting, the Professional and Amateur Sports Protection Act (PASPA) of 1992 prohibited it across the entire country with a few exceptions. That was until 2018, when the Supreme Court finally ruled in Petition for Writ of Certiorari, making gambling in sporting events legal and left it to the states to regulate it. Ever since, a number of other states have also legalized sports betting having their individual regulation mechanism. It enables the states to make their own regulations that can suit a particular state while having federal guidelines to keep a check on any unlawful practices.
- Australia
Australia has a strong sports betting market, overseen by both federal and state regulations. The Interactive Gambling Act of 2001 controls online gambling, while state laws manage in-person betting. Australia places a high priority on minimizing harm, with strict rules on advertising, required responsible gambling measures, and self-exclusion programs. The Australian approach highlights the need to balance market expansion with protecting consumers and promoting responsible gambling.
GROUNDS FOR ILLEGALITY
The illegality of sports gambling in India derives from a complex framework that includes social, moral, economic, and legal issues. While there are arguments for regulating and legalising sports gambling, numerous convincing grounds support its current ban.
From a social and moral perspective, gambling is frequently seen as a harmful habit that can cause significant damage to individuals and society. Many Indian communities and cultural traditions disapprove of gambling because it is linked to moral decline and social issues. The Mahabharata, an ancient Indian epic, illustrates the risks of gambling through the story of Yudhishthira, who loses everything in a dice game. This tale highlights the enduring cultural disapproval of gambling.
Additionally, gambling is often linked to criminal behaviour and corruption. The belief that gambling encourages greed, dishonesty, and unethical conduct contributes to the negative perception surrounding it. These moral concerns are reinforced by religious convictions, as many religious groups in India discourage gambling as it may lead individuals away from moral and virtuous living.
The economic impact of gambling is a key factor in its prohibition. Gambling addiction poses a serious threat, often causing financial devastation for individuals and their loved ones. Gambling can cause serious financial circumstances, pushing individuals into substantial debt and sometimes driving them to resort to criminal acts to fulfil their addiction. The social consequences of gambling addiction, such as higher crime rates, family rifts, and reduced productivity, carry heavy burdens that can be challenging to address.
One major concern of Sports betting is also match-fixing, where individuals involved in sports events manipulate results for betting gains. This unethical practice not only tarnishes the spirit of sportsmanship but also shakes public confidence in fair competition, leading to a loss of trust in sports leagues and associations. The controversies surrounding the Indian Premier League (IPL) have shed light on the seriousness of gambling-driven corruption, emphasizing the negative consequences it can have.
Additionally, the regulatory infrastructure required to effectively oversee and regulate sports gambling is underdeveloped in India.
SUGGESTIONS
83% of respondents in FICCI Survey said regulating sports betting with proper laws is better than banning it.
To address the complicated issue of sports gambling in India, a diverse approach that includes legislation changes, strong regulatory structures, and initiatives to prevent negative consequences is required.
Firstly, it is important for India to update the old Public Gambling Act of 1867 to align with present-day needs. This could include providing precise definitions to differentiate between games of skill and games of chance, and officially legalizing and regulating sports betting. Establishing a national policy framework would ensure uniformity among states while also permitting adjustments to cater to local requirements. For instance, India can consider the approaches worldwide. Following the UK’s Gambling Act example and setting up a thorough regulatory system could promote fairness, safeguard consumers, and prevent criminal activities. Creating a specific regulatory body, like the UK Gambling Commission, would offer supervision and uphold standards throughout the sector. India could benefit from the US model by allowing individual states to regulate sports betting or from Australia’s commitment to responsible gambling practices and minimizing harm provides by enforcing strict advertising rules, making responsible gambling programs compulsory, and offering self-exclusion options.
In summary, finding a middle ground through modern laws, strong regulations, and proactive steps to tackle social issues can effectively handle sports gambling in India. This approach will safeguard consumers, uphold market ethics, and tap into the economic advantages of a well-regulated sports betting sector.
CONCLUSION
This paper serves as a simple and general overview of the complex issues associated with regulating sports betting, especially concerning remote betting services.
Different committees and a number of other bodies have endorsed legalization of betting in sports. Haroon Lorgat, the former Chief Executive of International Cricket Council (ICC) said that “That’s been our view, if the industry was regulated you could actually work with them, monitor them better and everything would be legal so there is reason to go underground”. Another positive effect is the responsibility for the large amount of money that circulates in the framework of unauthorized betting, to regulate the fight against such vices as fixing, money laundering, and criminality. The issue is of focusing on how to regulate the sources involved in the gambling and designing a regime which encourages the betting operators for compliance.
It is crucial to notice that the market of sports betting has remained only in the scale of growth in the recent decades in India because of having become a favourite pastime among the population as well as because of bringing easy money to the gamblers. According to the KPMG Report on “Online Gaming: “A Gamble or a Sure Bet” –
| Betting market in India | Rs. 300,000 crores |
| Possible rate of tax | 20% of the profits |
| Possible revenue to the Government | Rs. 12,000 crores to 19,000 crores |
Therefore, allowing sports betting to operate legally would offer a way to control this chaotic sector and address the risks associated with underground markets. The government stands to gain financially through taxes if the industry is properly regulated. Legalizing sports betting in India has the potential to generate employment opportunities, boost tax revenue and business income, and attract tourism. It is clear that legalizing sports betting is a necessary step forward for India.
Undoubtedly, regulating sports betting in India will face numerous challenges and controversies, considering that gambling always sparks public attention and debate. However, the current circumstances suggest that India should prepare to confront this challenge.
Research Paper By:
Riya Shah
Institute of Law, Nirma University