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Gambling And Its Related Legislation

The topic which is going to be discussed here in this project carries a certain and specified history in itself. Since the Vedic period or before, its influence has been seen time to time in different texts written at that time such as: Rig-Veda, Atharvaveda, in the context of Mahabharata, etc.

From the game of betting in cricket and such other games to Chausar and modern days Casinos, everything comes under the influence of gambling.

Laws to prohibit gambling has been seen in texts like Manusmriti, and even in Arthashashtra but all these laws have seemed to be failed always.

To understand this partially entertaining but completely destructing game, we have to understand it one by one in a chronological order from the ancient time to modern era.

It is termed as destructive because it involves a lot of risk and uncertainty, and the main thing is that people who entertain themselves by playing gambling always consider it as a skill which they already mastered and thus they have no idea of risk they are being going through.


Meaning of Gambling:

If we discuss about gambling in very simple language then it is meant as winning a large sum or quantity of goods in a small sum of money in a one go, i.e. in a one round.

In a simple way, gambling is an act where money or some asses is kept at stake for a desired but uncertain outcome. Primary target is to win as much as you can but it is totally based on uncertainty.

But according to this principle there are three things mainly needed for gambling:
  1. Consideration
  2. Risk (Chance).
  3. Prize


It means that assets kept at stake must be of equal worth. I.e. in simple language, in exchange of one thing, provided the other must be of equal worth.

Risk (Chance): There is a principle in business, 'more risk more profit'. This principle is equally applied in gambling also. It means that more amount you put at stake, more are the chances of game. It all is a game of probability.

Prize: When consideration and risk get completed then comes the third stage i.e. PRIZE. As we have told earlier, prize always depend on risk. And the main and complete goal of any gambler is to receive a good prize.

Gambling in ancient India:

In the history of India, as discussed earlier gambling has been seen in practice, and it adversely affected the society at that time also. In a reference from Mahabharata, Yudhishthira, the eldest Pandav has been shown to lose everything related to him, even his brothers and his wife also in a game of dice.

There are such other instances also seen in ancient India where such references to gambling has been seen and certain rules and laws have been made to regulate it but all seems to failed at this point. In the works of 'Yagnavalkya', 'Narada Smriti' and 'Kautilya', they have advocated to frame laws to regulate gambling.

Even in the Vedas like Rig-Veda and Atharva-Veda which were written around 1500b.c. have proofs of such instances of gambling.

In Katyayani Smriti, verse 935-939, it is written that if gambling can't be stopped, it should be thrown open to all the citizens of that country, under the Law.

And taxes should also be imposed on the Gamblers as it is important part to regulate the Gambling.

Thus, according to them it can be played but only by paying proper taxes to the king.

Manu said that:
These type of activities such as Gambling, Betting, etc. are harmful for the society as they are immoral, unethical and these acts betray the moral values of people and thus lead to the degradation of moral value and thus resulting in the downfall of social and ethical values in the society.

In Narada Smriti, gambling is considered as an entertaining act which should be practiced in public games so as to entertain public.

From the above context, it can be concluded that scholars in ancient India kept a miscellaneous or mixed approach towards the act of gambling and it always remained a matter of discussion, whether it an act of skill or it is just a random chance.

Along with time forms of gambling and betting have been changed and evolved with the use of technology and everyone's access to internet. Now-a-days people put betting through mobile phones etc. and thus making it more difficult to be regulated.

Difference between wagering, betting and gambling


It includes different acts of probability which may be possibly happen or may not happen. In these type of acts there is an operator which individually or with a small team run a game, it may be based on anything like numbers, words or figures etc. where players put their money at stake in hope of possible outcome to multiply that amount. It also includes the game of cards in which players put something worthy to risk of wining.

It includes events like possibility of happening of some incident and all these type of events are definitely and completely illegal in India.


Gambling on the other hand is different and can be understood by the FINANCE ACT 1994 'BETTING AND GAMBLING' under section 65-B (15), according to which it is stated that 'Gambling is an act in which an individual put on stake something valuable, specially money with the knowledge of Risk of losing it and Hope of gain by the result of a game or an event whose outcome may be decided by probability or luck or on the possibility of something happening or not happening'.


Generally betting is also considered to be similar as wagering but it is particular to certain events such as Horse racing or matches between individuals or Teams. Thus we can say that betting is a part of wagering which is done in a sporting event on its resulting day.

Betting can be simply considered as putting something valuable or liquid cash at stake on any events to happen or not happen.

Betting and Indian Constitution

On 2 September 1949 in the debate of constituent assembly Entry 45 (present 34) has been added which include a ways to deal with betting and gambling. It is listed in PART 2 of the seventh schedule.

Members of constituent assembly were thinking to completely ban the Betting and Gambling while Dr. Ambedkar put forth his views which were totally different. He said that if Entry 45 of betting and gambling is being removed then there will be nothing in control of state governments to regulate it but it doesn't mean that we should permit Betting and Gambling. He said that Entry 45 is just a tool for state government to either permit or prohibit betting and gambling. After so many arguments and verdicts Betting and Gambling was included in the state list so that state governments can regulate it.

In a general pretext it can be considered that in India Lottery and Horse racing are two events which are legal under Betting.

According to Entry 40 List 1 parliament has the right to make law over any Lottery organized by any of state governments or by the government of India.

According to List 2 of seventh schedule in Entry 34 state governments have right to make law on gambling.

Constitution also focused on the thing that state should keep children and youths away from the exploitation (moral and material) by Gambling.

Case Studies:

Morality and Betting

On the basis of morality Indian society always rejected such type of activities every responsible citizen of the country should prevent its relative from fallen for this type of activities.

Government also prohibit such type of activities for the social as well as national development. But instead of such type of prevention and prohibition there are such type of falls activities which have been prevailed in the society at a big level.

In the popular case of Guru Prasad Biswas versus state of west Bengal and others. The honorable High Court of Calcutta stated that activities like Betting and Gambling adversely affect an individual's moral values and due to which his/her right to live guaranteed under Article 21 of the the constitution of India is being infringed.

Public Gambling Amendment Bill 2002 was heavily protected by society as it was advocating to legalize Gambling and Betting.

Legal perspective of gambling and betting

There are chances of being people resorted to the unlawful acts in a bid to earn a quick money so in order to prevent this governments continuously work upon laws and legislatives on these acts of Gambling and Betting.

Those who are in the favor of regulating these acts , they found them unethical and immoral which directly harms the public ethics as well as society as they are directly related against the morality.

They think that if Betting and Gambling is legalized, it will create a platform from which any individual can take part in the unethical, corrupt and anti � social activities practiced against the society and nation without any hesitation.

In 2014, Rangarajan committee predicted that approx 30.9% population in rural areas and approx 26.4% in urban areas fall below the poverty line, and it is quite shameful and a big problem that approx one-third of the population falls under the poverty line and involved in the shameful and immoral act of gambling.

Here let us talk a little about doctrine of res extra commercial, this doctrine seeks to exclude certain activities from the ambit of freedom of trade and profession guaranteed under Articles 19(1) (g) and 301 of the Constitution of India. It means that these activities of gambling and betting are not considered as act of trade and commerce as in certain events The Court also remarked that though these activities employ external forms, formalities and instruments of trade, they could not be considered commerce. It is pertinent to note that this distinction between activities that were protected under Article 19(1) (g) of the Constitution and those that were not, was made on the basis of whether the said activity involved substantial element of skill or chance. While the former have been given the protection from Constitution, the latter have termed as illegal from that very same Constitution.

Immorality or opposed to Public policy

According to Section 23 of the Indian Contract Act, 1872 the consideration or object of an agreement would be lawful unless regarded as immoral, or opposed to public policy, by the Court. Here arise the question that what is the public policy? It is answered in the context that Public Policy is a common or a general policy that advocates the public interests and whenever any action affects public interests, the Public Policy is invoked.
Here it can be considered that Public Policy is not permanent and it varies from time to time and it does not remain static at all.

Therefore, it can be said that even if gambling and betting are questionable on the moral grounds, the framers of the constitution were aware of the fact that it would be nearly impossible to completely prohibit such type of activities. And now-a-days with the more access of technology this problem has become worse. Thus the idea of putting betting and gambling under the state list was a very technical decision as it empowers the state to put regulations on these activities as per the socio economies conditions of that particular state.

Wagering Agreement

In the case of Carlill v. Carbolic Smoke Ball Co.90, a wagering agreement was defined as:
one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that, dependent upon the determination of that event, one shall win from the other, and that other shall pay or hand over to him, a sum of money or different stake; neither of the catching parties having the other interest in this contract than the total of stake he can therefore win or lose, there being no different real consideration for the making of such a contract by either of the parties.

Wagering is completely banned in India and according to law a wager is completely null & unenforceable by law. It is considered as immoral and against public policy.
The main reason for the provisions of declaring wager as void is to detach people from such activities of making a quick money and to indulge them in a productive work which would help in the development of their family as well as that of nation.

Wager is also non recoverable as per the Indian Constitution. All the contracts of wager whether they are expressed or impressed are automatically considered as null & void.

It is also given in the Section 30 of Indian Contract Act that any legal cession or online gaming operators could refuse the winner to pay the winning amount as it is unenforceable according to the constitution. Therefore all these provisions are mainly oriented towards the public detachment from such type of activities.

Lawful Provisions
According to the Constitution of India in the Seventh schedule List 2, Entries 34 and 62: Gambling and Betting are the state subjects but central legislations also affect them.

Some examples of these affects are:
  • Indian Contract Act 1872 (IPC).
  • The Foreign Exchange Management Act 1999.
  • The Prevention of Money Laundering Act 2002 (PMLA).

Central Laws
  • The Lotteries Regulating Act, 1998

    1. 'Lotteries' are placed in the Entry 40 of List 1 of the seventh schedule of the Indian Constitution.
    2. Lottery is considered as legal in India. According to Act of 1998 Lottery should be organized by the state government and the place of Draw should be in that particular state.
    3. According to Section 5 a particular state can organize the Lottery within its state boundaries and the sale of tickets cannot be done in the other states.
    4. According to Section 4 revenue collected from the sale of Lottery tickets should be deposited in the state treasury.

  • Indian Penal Code, 1860

    Sub-section (1) of section 292 of the Indian Penal Code
    Provides for a matter to be obscene if:
    It is lascivious or appeals to the prurient interest or if its result, or (where it includes 2 or a lot of distinct things) the result of anybody of its items, is, if taken as a full, like to tend to alter and corrupt persons, UN agency square measure probably, having relation to all relevant, to read, see or hear the matter contained or embodied in it.
    Sub-section (2) supplements Sub-section (1) of Section 292 by laying down a list of instances as also the penalties of offences covered under this provision. Section 294 strikes at punishing anyone who to the annoyance of others does any obscene act in a public place or sings, recites or utters any obscene song, ballad or words, in or near any public place. These provisions of the IPC may be attracted if any obscene matter is used for the purpose of advertising Betting and Gambling activities.
  • Indian Contract Act, 1872

    According to Section 23 of Contract Act, 'consideration must be lawful otherwise it will be prevented by the law if its nature is defeating any provision of the law'.
    Section 30 declares all types of wager as 'void & unenforceable' and it is considered as illegal. While there is an exception to this provision as in the contract act betting on Horse racing is permitted.
  • Prize Competitions Act, 1955

    Section 2(d) of the Act defines the term Prize Competition as:
    any competition (whether called a cross- word prize competition, a missing- word prize competition, an image prize competition or by any other name) in which prizes are offered for answer to any puzzle based upon the ranking pattern, arrangement, combination or permutation, of letters, words, or figures.
    According to P.C Jain committee 2014 most of the states have their own state legislations to deal with Betting and Gambling.
  • Foreign Exchange Management Act, 1999

    Remittance of the Income generated from Lottery winning, racing/riding is prohibited under this act.
    According to Clause 1 of this act any type of collaboration with foreign technology for the purpose of Betting and Gambling is prohibited under this act
  • Payment and Settlement system Act, 2007

    Under this act RBI has the sole authority to regulate all types of Electronic payments. If RBI works to constitute a Legal framework and authority for gambling procedures then in that condition Gambling procedure can be stopped.
  • Information Technology Rules, 2011

    According to the Rule 32(b) under this act any internet service provider, network service provider or any search engines will not host any such content which directly or indirectly support Gambling.
    According to Rule 3(4) any type of content which support Gambling should be deleted within 36 hours.
  • Income Tax Act, 1961

    Under this act current taxation policy in India covers all type of Gambling industry directly and indirectly. Thus, it can be said that all regulated and legalized Gambling is supporting in GDP of India.
  • Public Gambling Act, 1867

    This act is taken from British Gaining Act 1845 and Betting Act 1853.
    The main goal 1867 Act was to punish public Gambling and to keep common gaming houses open.
    Public Gaming Act has been ceased to the central legislation such that it cannot be applicable in the whole country unless the state adopted it on its free will because the law making power on these activities directly confers to the state by the constitution of India.
    Currently there are 14 states/UTs were the public gambling act is implemented.
    Parliament can exercise the power of law making on Betting and Gambling under the article 249 to 250 if necessary.

International Views of Gambling

On the international level different countries have different views on regulating and controlling the gambling and betting.
The countries which primarily preferred to religious views have completely banned Gambling while on the other hand some countries have partially banned and regulated it
so as to generate revenue for Gambling. This helps in the growth of the GDP of the country. Thus it can be said that different countries have different policies.

For Instance:
  1. United Kingdom:
    United Kingdom Gambling Act, 2005 in its Section 3 defines 'Gaming',
    'Betting' and 'Lottery'. This act regulates Gambling and Betting in the country and its main target is to protect children and other vulnerable people from being exploited or harm by the Gambling.
  2. United State Of America:
    the laws related to regulation of Gambling and Betting in America are quite liberal and it is regulated in three sets in America:
    • Local
    • State
    • Federal
      According to American Gambling Association commercial casinos directly paid $8.95 billion direct tax at state level. In 2016 $38.96 billion revenue has been generated from the commercial casinos in America.
  3. Australia:
    In Australia (Federal and State Government) keep an eye of every aspect of Gambling.
    Federal Government of Australia makes laws on internet gambling while State Government watches every aspect of gambling and Local Government plans on the regulation of Gambling.
    Sport Racing, Horse racing and Grey hounded racing is legalized for licensed authorities or operators.
  4. Austria:
    Austrian laws are applicable on all types of Gaming and betting activities.
    E-commerce Act of Austria which came into existence on 1 January 2002 regulates all types of Gaming and betting activities.

Views on Gambling: Government of India

A commission was formed on the reference of Supreme Court in BCCI v. CRICKET ASSOCIATION OF BIHAR & ORS. , to study the possibilities of legalization of Betting in India and its positive and negative effects.
In that case the commission asked all Public, Stakeholders and other organizations to provide their views on this matter on 30 May 2017. It was seen that the responses were miscellaneous. Some were in the support while others were opposing it.

The views which were against this idea said that if a gambler has lost its asset, he will again try to gamble in order to gain something and in this process he will violate all the ethics and morality. Therefore Gambling should not be legalize.

While on the other hand some said that Gambling as an illegal activity cannot be stopped so the better option is to legalize it and regulate it in order to create a proper balance. They think that Gambling should be regulated as same as Stock market.

It is also said that just like the Horse racing other forms of Gambling and Betting should be legalized in order to generate a heavy revenue and to keep Gambling in balanced form.

Policies Needed For Regulations of Gambling

It is often seen that a Gambler, in the greed to win more money and play more and more suffers the continuous loss unconsciously.
This concept is called as 'Loss chasing' which is a big problem of Gambling.
It is similar to the drug addiction.
There is no central law till now which can regulate the internet Gambling.
Sikkim and Nagaland are two states which permit Gambling.

In this condition where the professionals are being hired for online Gambling and money is being invested on the professional Gamblers. Govt. needs to keep an eye on these things and it is necessary for the government to include Gambling in Information Technology Act so as to keep an eye in the online Gambling.

Results of Unregulated Gambling

Due to the failure in regulations of Gambling, Illegal trade is indirectly increased.
Corrupt practices are being practiced such as Spot fixing, Match fixing in sport particularly Cricket, other short sports where Mafias also Bet.
According to a data given by Delhi Police 1098 cases have been registered under Gambling Act in 2016 while this count went to 1273 in 2017 and till 5 May 2018 544 cases have been registered. According to this data on an average 104 cases per month are being registered.

A committee headed by Former Chief Justice of India R.M. Lodha said that regulated Betting should be permitted in India so as to reduce the percentage of Match Fixing and other such activities.

By looking on the current scenario many incidents of Match fixing and betting can be seen in IPL which clearly indicates that Betting and Corruption is prevailed and mainly in cricket throughout the world.

Benefits of Regulated Gambling and Betting Industry:

  1. Easy to control Illegal trade.
  2. Generate Revenue
  3. Protection of Society from unethical ways
  4. Tourism development- As more casinos will be open and interested people will come from outside.
  5. Employment opportunities

By regulating Gambling and Betting all above written advantages will be exercised by Government of India and it will be helpful in the development of country.

Federation Of Indian Chambers Of Commerce And Industry (FICCI) in its report in 2013 stated that underground Betting market in India is very huge and worth approx 3 Lacs Crore.

It is possible to prevent crimes like Match fixing by legalizing the Sports Betting.

It will also prevent Players as well as Coaches to be involved in the unprincipled approaches.

Around 10 million individuals in the United States live with a betting habit issue. A betting habit happens when an individual keeps on betting notwithstanding negative impacts that may affect their funds, connections, or prosperity. Betting enslavement includes impulses to search out betting, wagering, and betting, and the final product can be obliterating for the card shark just as his or her family.

Individuals who battle with a betting or shopping issue frequently shroud their issues out of disgrace and a craving for mystery. His frequently defers recuperation and treatment and enables a betting dependence on lead to different genuine impacts, including loss of occupations, fizzled connections, and extreme obligation. Issue betting is regularly connected with emotional well-being issues, including sadness, tension, and temperament issue. Betting issues don't simply influence psychological wellness. Individuals who have battled with betting advantage extraordinarily from treatment and regularly additionally need family guiding and budgetary training to completely recuperate.

Studies have appeared more than $6 billion has been lost every year to betting addictions. This issue is sweeping and can make the two people and organizations frenzy and act in manners they would not ordinarily act.
Betting addictions likewise place an extreme hardship on jail frameworks, open help programs, and lawful frameworks. There are numerous outcomes of betting addictions that outcome in network monetary expenses.
While the dependent individual will endure amid a betting compulsion, that individual's family will likewise confront difficulties.

The pressure that the issue card shark encounters may cause bad tempered conduct, mystery, and contentions. Calls from banks and bill gatherers dissolve connections. Monetary strains sway all relatives, and stressed connections make the experience troublesome for even more distant family individuals, companions, and associates.

The impacts of a betting dependence are frequently very clear. An extensive number of individuals who take part in habitual betting will utilize Visas and charge cards to pay club or web betting associations. On the off chance that you participate in issue betting, you will in all probability cause obligation, harm your connections, and dismiss your objectives throughout everyday life.

The impacts of betting habit may run anyplace from lost cash to suicide. Also, they may demolish pretty much every part of life. For instance, connections, scholarly or office execution, mental self-view, confidence, conduct, and social duties. Commonly, the impacts amid the withdrawal time frame incorporate certain conditions. They incorporate compelling impulses, fretfulness and declining of prior mental disarranges.
Suicide: For a couple of addicts, suicide might be the main way out. That way, they set themselves far from mounting advances and obligations. In different cases, they may make such pointless stride because of discouragement or a dread of lawful charges.

Numerous individuals who bet too much have blended emotions about betting. They realize they are causing issues for their loved ones. They may wind up restless and miserable, and regularly loathe themselves. Be that as it may, the desire to bet appears to be too incredible to even consider resisting. They believe they can't abandon constantly, cash and feeling they have put into betting. They can't acknowledge that they will never win back what they have lost. A few people still trust their framework will satisfy, their karma will change or they are because of win. Others trust that proceeding to bet is the main way out of a circumstance they are embarrassed about.

Other individuals guarantee to stop, yet can't. They dread their friends and family will discover them out. This drives them more profound into covering up and further into obligation. They continue trusting a major win will end their issues. On occasion they may win, which keeps their expectation alive until the misfortunes mount up once more. On the off chance that they quit now, they will feel like a washout. They should confront every one of the issues betting has caused.

On the off chance that you resemble a great many people who bet too much, you may have endeavoured to chop down or stop ordinarily. It is difficult to change your betting without anyone else. Guiding can enable you to discover long haul answers for your issues.

Uneasiness and Depression
Numerous individuals who bet too much feel pushed, on edge and discouraged. This can make resting, considering and taking care of issues progressively troublesome.

On the off chance that you have a portion of the accompanying manifestations for over about fourteen days, filling your heart with joy to-day life troublesome, you may have perpetual sorrow:
  • You have lost enthusiasm for common exercises
  • You feel discouraged, sad or peevish
  • Your rest has changed (e.g., you have issues nodding off or staying unconscious, or you rest excessively)
  • Your craving has changed
  • You have lost or put on weight
  • You feel defenceless, miserable or despondent
  • It is difficult to think and to recollect things, and your considerations appear to be slower
  • You go again and again liable emotions
  • You cannot quit contemplating issues
  • You have lost enthusiasm for sex
  • You feel physically worn out, moderate and overwhelming; or you feel fretful and jittery
  • You feel furious
  • You consider suicide

In the event that you have any of these challenges, address your family specialist or other medicinal services proficient (a betting advocate can likewise ensure you get the assistance you need). Inform that person concerning your betting issues as well. Treatment may incorporate prescriptions as well as advising and other help.

Conclusions and Suggestions
After seeing the Pros and a Cons of online Gambling one thing is clear that Gambling and Betting has evolved in a gigantic manner and it has its Global presence.
With the changing times the idea of complete ban on Gambling has been shifted to the regulation of Gambling but one thing is to be noted that it will be very difficult for the countries to regulate it.
The market size of global Gambling has been increased in the last decades. In Asia it is increased by 39% while in Europe its growth has been recorded up to 41%.
In this context Japan has the biggest Betting market which is approximately double the size of the Betting market of the United Kingdom.
In the life of an Individual Gambling started from fantasy and end up at the financial loss or sometimes it leads to the enmity and self-destruction.
It always effect on the Economic status, Social status and the personal life of the individual.
In the unregulated environment gambling also support to corruption as well as criminal activities.
Its major drawback is financial loss which lead to be Bankruptcy sometimes and then individual borrow money from others and thus this chain leads an individual to certain diseases like Depression and Stress Etc.
According to current scenario in India legalization of Betting and Gambling is not possible so state authorities should completely ban it.
Since online Gambling and Betting is performed by media therefore to regulate it a watchdog committee should be made.
In the Skill-Centered games like Horse racing operators should focus on the safety and protection of players.
The website which is advertising the Gambling should keep in mind that it would not upload anything which is objectionable or pornographic.
The transactions between operators and players should be cashless so that the government watch them transparently and they will contribute to the revenue.
Match fixing and Sport Fraud should be considered as Criminal offence.
If Gambling is legalized in India than India will collect a heavy tax revenue which will contribute to the GDP of the country.
Tourism will be increased by the opening of new casinos that will contribute to the GDP directly.

At the end of project I would like to suggest some points that must be kept in mind in order to legalize Betting and Gambling.
  1. License should be issued for a certain period of time and there must be a proper procedure to be followed for the license issue.
  2. If any fraud comes under notice there must be a penalty and punishment for it.
  3. The regulatory authority of Government must regularly check the monthly as well as annual reports of the licensed bodies.
  4. A limit should be set on Transactions.
  5. Last but not the least- Every transaction must be Cashless.

  2. The Public Gambling Act, 1867
  3. Sayta, Jay (January 1, 2012). Legality of poker and other games of skill: a critical analysis of india's gaming laws (pdf). NUJS Law Review. Archived from the original (PDF) on November 2, 2013. Retrieved January 3, 2015.
  4. �
  5. Rediff Guide to the Net: Features: Wanna Bet?.
  7. Sanjay, Roy (27 October 2009). Indian online gambling market set to open up. India Bet. Retrieved 28 October 2009
  8. Thompson, James (27 October 2009). Betfair and William Hill target India. The Independent. Retrieved 28 October 2009.

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