[Opinion] An In-depth Exploration of e-Gaming, e-Gambling & e-Sports in India

Tamanna Gaba – [2023] 150 taxmann.com 296 (Article)

Introduction

In recent years, the world of online gambling and betting has experienced exponential growth, captivating the attention of both enthusiasts and entrepreneurs. In India, where the market potential is immense, understanding the legal framework surrounding this industry is of paramount importance. This article aims to shed light on the laws governing online gaming, the distinction between games of skill and games of chance, the stance of state governments, jurisdictional considerations, key regulatory laws, proposed amendments, and restrictions under the Foreign Exchange Management Act (FEMA).

1. Distribution of Legislative Powers in the Indian Constitution to regulate Gambling

Article 245 of the Constitution of India deals with the distribution of legislative powers between the Union and the States. It states that the Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State.

Article 246 of the Constitution of India further elaborates on the subject by dividing legislative powers between the Union and the States.

The 7th Schedule to the Constitution of India specifies the allocation of powers and functions between the Union and the State legislatures. It embodies three lists; namely:

(a) Union List
(b) State List, and
(c) Concurrent List.

The Union list has a total of 97 subjects over which the power of the Union parliament extends. Similarly, the State list enumerates a total of 66 subjects for state legislation. The Concurrent List contains 47 subjects on which both the Union and State Governments can legislate. Both the Union and State Governments have the power to make laws on these subjects, but in case of any conflict, the Union law prevails over the State law.

1.1. Gambling as a ‘state matter’ in India

Gambling is a state subject, and only states in India are entitled to formulate laws for gambling activities within their respective states. “Betting and gambling” is listed in entry no 34 of the state list.

Each state has its laws related to betting and gambling, which vary depending on the State to State. Some States have enacted laws that permit certain forms of gambling, while others have completely banned gambling activities. Some States have also enacted laws that specifically address online gambling and betting.

For example, the state of Sikkim has legalized and regulated online sports betting and casino games within its jurisdiction, through the Sikkim Online Gaming (Regulation) Act, 2008.

Similarly, the state of Goa has legalized and regulated casinos and other gambling establishments within its jurisdiction, through the Goa, Daman and Diu Public Gambling Act, 1976.

2. Laws on online gaming: Status of Online Gambling and Card Games in India

As far as India is concerned, no clear regulatory framework can be looked upon to decide the legality or illegality of online poker, online rummy, online card games, fantasy sports, etc.

There are no specified federal laws that prohibit online betting in India. Only a few states have made recently explicit laws against online betting. Earliest regulations like the Public Gambling Act of 1867 are still in place.

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