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 gamblingThe 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, 1867This 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, 1998This 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, 1860Section 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 gamblingThe 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 jurisdictionsIf 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.ConclusionOnline 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.
The online gambling industry is the most profitable industry on the internet. Millions of people around the world are wagering on sports online, playing online poker, bingo and even the lottery online at any of the thousands of gambling sites available on the net. Even people who have never visited a land based casino or a local bookie are finding themselves visiting online casinos and poker rooms on a regular basis.So, what makes gambling on the internet so appealing? Yes, you can play any game of your choice without having to leave your favorite chair. Still, you will not be served free drinks; you will not be able to watch the game you have wagered on from big TV screens; you can neither see the facial expressions of your poker opponents nor to hear the sounds of the coins fall from the slot machine when you hit the big jackpot…Here are the benefits of gambling online comparing to traditional gambling:Diversity: how else can you jump from an online poker room to the craps table and to a bingo hall while staying seated on your most comfortable chair? Most online casinos feature a large variety of casino table games, slots and video poker machines. Moreover, in many major online gambling companies you can switch from online casino gambling to online sports wagering with the same username and account.Bonuses: where else can you receive free money to gamble with? Most online casinos offer free money bonuses in order to entice new customers and to keep up with the competition. The bonuses can start from 10 dollars free just for downloading the casino software to a couple of thousand dollars for completing a certain required amount of raked handsConvenience: obliviously, what can be more convenient than playing your favorite casino game in the comfort of your own home while listening to your favorite music and drinking your favorite beer? Not to mention being able to put your dealer on hold each time up you want to take a breakSmoking and Dress Codes: whether you are a smoker or a non smoker, when you are gambling online you are free from obeying the rules. Same goes for dressing, eating and drinking; you can either smoke non stop or remain in a non smoking environment; wear your sloppiest clothes or stay naked; eat, drink, talk on the phone, watch TV, whateverAtmosphere: when you are gambling online, there are not any cocktail waitresses who will sedate you with free drinks and distract you from beating the dealer. In addition, you can set an atmosphere of your choice that can include clocks or even a source of day lightBeginner Friendly: a land based casino can be an intimidating place for the newbie gambler. The average online casino, on the other hand, is much more beginner friendly than its brick and mortar equivalent. Interactive tutorials, play money modes and the option of avoiding social embarrassment caused by misunderstanding of the rules and codes of behavior is a more pleasant welcome for the novice casino gamer or poker playerSafety: yes, gambling online is usually safer than playing in a land based casino and carrying big amounts of cash money in your pocket. Most online casinos are reliable and respectable businesses that will not risk their reputation and lose their customers base by scamming their playersIn addition to the list of benefits mentioned above, online gambling offers equal opportunity for people with disabilities or those who cannot afford traveling out of their state to play in a legal land based casino.However, reading about the benefits of online gambling makes the huge popularity of online gambling, online poker playing and online sports wagering much easier to understand.