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The Legality of Skill Gaming

07 FEB 2019

There are many who would like to get into online gaming to widen their scope, improve their skills and to interact with elite gamers everywhere. There are those interested in online gaming simply as an entertaining and challenging pastime. However, there is a certain sense of hesitation usually born out of a lack of knowledge about games of skill, their legality, and the reliability of the service providers.  We look at the legality of skill gaming; particularly at the laws governing this in India.

Gambling differentiated from skill games

The legal definition of gambling is the act of risking something of value for the chance to win a prize. The element of chance is central to gambling and this differentiates it from games that depend upon the player’s skill. Games of skill range from classic board games to games that require abstract thinking, strategizing, involve memory and require a certain aptitude. The difference between gambling and skill games is vital to determine the legality and to decide what kind of games fall within the ambit of what is permissible by law.

The gambling act expressly excludes skill games

An old law that dates back to the British Raj governs gambling in India. This law is generally applicable though different states such as Maharashtra, Goa, Nagaland and Sikkim do have specific provisions governing gambling and some states even issue their own state lotteries.  The Public Gambling Act of 1867 prohibits gambling but provides that it does not apply to games of skill. The act does not define the term ‘skill’, however.

In the event, the Supreme Court clarified the point of what constitutes skill and clarified that there would be games where “success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player”. Games whose outcomes are wholly uncertain and doubtful are games of chance and hence held to be gambling, which is impermissible under the law.

What if a game, such as ‘Poker’ depends on skill but also has an element of chance? Would this be legal? The test here would be the predominant factor in that particular game. If skill level of the player, adroitness, attention, training, experience and knowledge of the game, were factors more likely to influence the game’s outcome than mere chance, then such a game would not be considered to be gambling and would be considered legal and permissible. The Supreme Court has expressly excluded games such as rummy and horse racing from the definition of gambling, holding them to be legal. Though the SC has not opined on the matter of poker, the Karnataka High Court has held that poker is a game of skill and not chance. Other states such as Nagaland and West Bengal have also held that poker is legal.

What about online skill games?

The gambling act uses the words “wherever played” which can be deemed to include online and offline games. Broadly speaking, the games deemed legal in the offline setting are also legal in the online setting. Cheap data and the exponential growth of Smartphone usage in India means that online gaming is a rapidly expanding space in India; growing at the estimated rate of 60 to 70% a year. The ease of playing from anywhere at any time and access to a wider range of opponents with varied skill levels as well as access to game histories makes online gaming a very attractive proposition. Online and offline gaming is governed by the same basic rules.  It is generally accepted that online skill games such as poker, rummy, horseracing, and fantasy cricket are legal under Indian law. Games played for entertainment and not for cash payouts, are deemed legal too.

The next obvious question would be whether it is possible and legal for Indians to use foreign gaming websites to play in India. Foreign gaming websites generally have no problem permitting Indians the use of their gaming platforms. While there is no actual law (except in Maharashtra) that prohibits Indians from using such platforms, this does not imply that it is advisable, particularly, in view of foreign exchange laws. As a foreign entity, an Indian player would have no recourse under Indian law should there be a dispute of any sort.

This article was written exclusively for Gaming360 by Chandini Khanna

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