Skill Vs Chance: Judicial Approach Towards Online Gaming Platforms in India
Introduction
The rapid expansion of online gaming created the legal and regulatory complications in India. Games that are stake –based falls under complex set of legislation both at state and central law in India. Over millions of users are using online gaming platforms like: rummy, poker, fantasy sports and many other digital games.
But the question arises that whether these games are legal or illegal and to what extent?
Indian courts have historically distinguished between legality and illegality of these online games by classified them between games of skills and games of chances.
This article will examine the judicial approaches adopted by courts in distinguishing between skill v/s chances doctrine and will evaluate the extent of implications and regulatory framework.
Historical Framework
The regulation of gambling, online gaming, offline gaming originates from PUBLIC GAMBLING ACT, 1867, a colonial legislation which prohibits the operation of common gaming house and visiting to gaming house, but there exists an exception for games that based on mere skills.
As time passes several states carved or modified the Act with the emergence of online games as dealing with colonial legislation poses interpretational as well as implicational complications.
Distinction Between Games of Skills & Games of Chances
The distinction between games of skills from games of chances is a key fundamental aspect in determining the legality and illegality of the regulation of digital online gaming. Games in which real money involved may fall into the ambit of Gambling law. Games which involved skills get favorable regulatory treatment under the Public Gambling Act1867. The PGA, 1867 act as a backbone of the Gambling legislation which prohibits games of chances (winning is based on chances) and allows the games of skills (winning is based on skills).
Under Section 12 of PGA, 1867[1]states that Act not to apply to certain games.—Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played.
This Act provides exception to the games which is based on the skills of the player
or in which winning is based on the skills of the players.
After the enactment of the constitution of India in 1950 the scenario got entirely changed as the Constitution permits States to draft or enact their own state law regarding betting, gambling etc. as per the requirement within their territories. After which many states drafted their own state laws whereas some stays with the PGA, 1867 which leads to the fragmented legal regulation in the entire nation, due to which judiciary has to interpret the terms in the case by case basis.
Judicial Interretion of “Games of Skills”
Indian court through various landmark judgments tries to distinguish between the games of skills and games of chances.
In the case of State of Andhra vs. K Satyanarayan (196)[2] SC held that the popular card game Rummy is a game of skill it is not the game of chances because it require skills of player to succeed in it. Rummy was declared as a game of chances under Hyderabad Gambling Act.
Also, in the case of K.R lakshmanan vs. State of Tamil Nadu(1996)[3] SC held that Horse Racing is a game of skills since it require Physical fitness, prior elementary knowledge, analytical abilities and skills of horse and jockey can be objectively assessed by the person placing a bet.
Court says that games where winners is based on skills such as predominated prior knowledge, training, attention falls in the category of skills based games.
Emerging Regulatory Challenges
Despite various judicial recognition, the regulating framework governing online gaming remain inconsistent due to state-wise legislative structure governing online gaming like Gambling, betting etc. falls under Entry 34 of state list of the Constitution Of India.
There are several state like Tamil Nadu, Karnataka and Telangana have attempted to introduce stricter regulation on Online gaming but courts have struck down the blanket ban where government fails to distinguish between Game of skills from Games of chances.
Also, Rapid technological advancement creates complication in governing online gaming. Issues like Addiction, consumer protection, taxation, data protection are remains the broader legal discourse around online gaming.
Need for a Uniform Regulatory Framework
Online gaming sector is fast-pace growing sectors which have projected potential growth in coming years require a central legislation governing the online gaming sector, which regulates companies, investors, consumers.
A uniform legislation will maintain consumer protection and will provide safeguard to the economic potential of the online gaming industries.
It requires a clear central legislation to avoid state wise fragmented laws to clearly distinguish between games of skills from games of chances.
Conclusion
Indian Judiciary plays a pivotal role in shaping the legal landscape of online gaming by constantly applying the game of skill vs. chance doctrine test.
Judicial decisions generally favors the games that involves skills, fantasy sports and various card games, thereby providing legitimacy to online games.
However lack of uniformity creates unnecessary complications in distinguishing between skills and chances and continues to creates legislative ambiguity.
As online gaming industries expands it require a balanced approach between judicial principles and modern regularities to support industries growth along with consumer protection.
Author:– Siddhartha Rai, in case of any queries please contact/write back to us atsupport@ipandlegalfilings.com or IP & Legal Filing.
References
- Public Gambling Act, 1867
- State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825
- K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226
- Varun Gumber v. Union Territory of Chandigarh, 2017 SCC OnLine P&H 5372
- Law Commission of India Report No. 276 on Gambling and Sports Betting (2018)
[1] Public Gambling Act, 1867, § 12 (India).
[2] State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.
[3] K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226.
