Parallel Innings: Indian Premier League and Illegal Betting Websites

29th May, 2024 - 6:59 am Categories: News & Updates Online Gaming Sports Law 0 Comments

INTRODUCTION

The Indian Premier League (IPL), 2024 being one of the most watched sporting events globally is hitting the headlines for setting new records for its popularity and viewership. With the outset of the cricket matches, plethora of illegal sports betting platforms have simultaneously increased their operations in order to lure cricket lovers by offering various discounts, treasure hunts and lucky draws. As per a report by Think Change Forum, an independent think tank about the betting sector in India, the sports betting industry, operating outside India receives around Rs. 8,20,000 crore ($100 billion) per year from India and is growing at a 20% annual rate since the deadly pandemic. Illegal betting websites not only cause financial losses for their users, resulting in psychological distress, but they also raise worries about national security, money laundering, tax evasion, and data breaches, among other issues.

Instances of individuals tragically succumbing to debt and taking their own lives due to involvement in online betting activities continue to emerge, underscoring the urgent need to regulate this domain and ban the unauthorized operators who keep changing their domain and operate from far-off to prevent their tear down. The grey area surrounding the legality of online betting games poses increased susceptibility to exploitation and fraud and questions the consumer protection measures by the government.

BAT vs BET: EMERGENCE OF SPORTS BETTING

Betting essentially refers to the act of investing money or anything valuable for an uncertain outcome in an attempt to win additional value on them. Since the beginning of time, betting and gambling have been prevalent in different forms in India. However, with the advent of time and technology, traditional gambling transitioned into a wider, catchier and easily accessible source of gambling, the cyberspace. Various online platforms and websites facilitate online betting in forms of different games. A relatively newer form of betting has emerged in the name of Fantasy Sports wherein users make their own virtual teams of real-life players and compete through statistical performance of these players in their respective sports.

UNDERSTANDING LEGALITY CONUNDRUM

The interplay of different laws and statutes surrounding betting in India makes its legality ambiguous. Since, there is no one unified law to regulate the act of betting, the complexities of each law push its legal status into a grey area. India being a federal country, gambling falls into the entry 62 of the ‘state list’, making the complexities more intricate, since every state regulates the sector with different restrictions.

GAME OF CHANCE VS GAME OF SKILL

The archaic Public Gambling Act, passed in the year 1867, could not keep up with the modern form of gambling. The Act prohibits gambling and sports betting. It is although imperative to note that the act differentiates the games on the basis of games where chance or skill is involved. The “games of skill” are not considered illegal, as it involves practice and presence of mind and not a mere outcome of luck or chance.

The Supreme Court in Avinash Mehrotra v State of Rajasthan[1], ruled that Dream 11 fantasy game is a game of skill involving use of knowledge, judgement and discretion and does not constitute as gambling. The court held it to be a business activity entitled to its fundamental right to carry on its business.

In Dr. K. R Lakshmanan v State of Tamil Nadu[2], the court differentiated between the game of chance and a game of skill. The court ruled that the latter is “one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player.” According to the court, in the game of chance, luck plays a superior role over the element of skill. The true character of the game can be figured by finding the dominant aspect encompassing the game, i.e chance or skill.

The court in Manoranjitham Mandram V State of Tamil Nadu[3], was of the opinion that there is no unified or a blanket approach to ascertain if a particular game is of chance or skill. It ruled that the facts and circumstances of each case should be referred.

In State of Andhra Pradesh v K. Satyanarayana & Ors[4], the court opined that there can be an interplay of chance and skill in a particular game citing Rummy as an example. It cited Rummy as a game of chance rather that a game of skill as it requires, memorizing and building up skills unlike other card games like the “three card game” where sheer luck decides the outcome.

The Information Technology Act, 2000 also comes into play since it talks about web-based wagering and gaming.  The Ministry of Electronics and Information Technology (MeitY) in an attempt to regulate sport based online betting games introduced the “Draft Rules for online gaming in India”. The Draft mainly focuses on protection of the players of these games from fraud and privacy breach. The draft mandates the gaming platforms to register with a self-regulating body, only the games registered and approved by the body can operate in India legally. It goes ahead to introduce additional due diligence to be observed by intermediaries by asking them to publish a no bot certificate from a reputed certifying body along with a random generation certificate in order to maintain transparency and curb fraud. It directs every gaming intermediary to set up a Grievance Redressal Mechanism and appoint a Grievance officer to effectively resolve its user’s concerns.

NEED FOR REGULATION: RECENT DEVELOPMENTS

In 2016, the FICCI approximated the illegal sector of gambling to be worth Rs. 10 lakh crores in 2016. The Report by Justice R.M. Lodha advised authorising sports betting so as to regulate the huge market. The 276^th Law Commission Report reiterated the need to regulate gambling highlighting the impracticality of eradicating it fully.[5]  According to Think Change Forum, the market has been showing growth of 20% per annum in the last three years due to the lockdown in the deadly pandemic. The number of users peaked from 140 million players to up to 370 million, the paramount cause being the Indian Premier League. The report by the Forum suggests apt implementation of the GST guidelines by establishing a task force to observe illegal offshore betting activities and compel their operators to register within India in order to preserve the outflow of Rs. 3 lakh crores from legally authorized gaming platforms to offshore platforms.

With IPL 2024 starting in full swing, many illegal websites like have stepped up their game in the betting industry which presses the need the need for stringer regulations to curb the operations of illegal websites who by providing a sense of authenticity are tricking users into believing them to be just and legal. According to the FICCI report[6], various off shore gambling websites still exist, increasing the portfolio of illegal game play and diversion of funds outside India. In early 2023, MeitY banned 138 betting and gambling sites and apps by offshore operators providing sports betting on account of suspected harassment of borrowers, exploitation of user data, and money laundering.

CONCLUSION

The Regulations by MeitY on online gaming is a positive step towards the unregulated online betting sector but falls short of removing the ambiguity and complexity of the current sports betting regime in India. The continuing operation of these illegal websites is not only disrupting people’s lives financially but is also capable of affecting them mentally, causing them anxiety depression and even suicide. These illegal websites not only deprive innocent people of their money but also breach their privacy by selling their confidential information in millions on dark web causing them more distress. The consequences of these illegal operators go beyond the simple loss of valuable money; they have wider repercussions, such as the loss of tax revenue for the country and the losses faced by authorized gaming websites. It is time that India adopts a blanket legislation regulating the diverse betting sector.

Author: Srashti Talreja, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

REFERENCES

ONLINE SOURCES

• US Sports Betting Revenue 2020, THE LINES, https://www.thelines.com/betting/revenue/

https://perma.cc/2JP3-EZBW

• Illegal betting sites start new innings as IPL action picks up, https://economictimes.indiatimes.com/tech/technology/illegal-sports-betting-sites-revive-activities-amid-ipl/articleshow/109110264.cms
• Offshore betting platforms to mushroom in the absence of regulating authorities, reveals Think Change Forum report,

https://www.financialexpress.com/business/brandwagon-offshore-betting-platforms-to-mushroom-in-the-absence-of-regulating-authorities-reveals-think-change-forum-report-3280423/

ARTICLES

• Saakshi Anand, “Internet Gambling in India: Regulation or Prohibition?”, Vol 4,

JOURNAL ON CONTEMPORARY ISSUES OF LAW [JCIL], 173-187, 2020.

• Nelson Rose, “Gambling and the Law: An Introduction to the Law of Internet

Gambling”, Volume 10, UNLV Gaming Research & Review Journal, 1-14, 2005.

• Chanvi, Online Betting in Sports: A Comparative Analysis, 3 INDIAN J. INTEGRATED RSCH. L. 1 (2023).
• Sakshi Pawar & Naman Lohiya, Legalising Online Sports Betting in India: A Gamble unto Itself, 4 INDIAN J.L. & PUB. POL’y 35 (2017).

[1] Avinash Mehrotra v State3 of Rajasthan, SLP (C) No. 18478/2020,

[2] Dr. K. R Lakshmanan v State of Tamil Nadu, 1996 AIR 1153

[3] Manoranjitham Mandram V State of Tamil Nadu, LAWS(MAD)-2005-1-20

[4] State of Andhra Pradesh v K. Satyanaayana & Ors, 1968 AIR 825 1968 SCR (2) 387

[5] Law Commission of India Report 276

[6] FICCI-KPMG, the power of a billion: realizing the Indian dream, FICCI-KPMG report,2013. http://ficci.in/spdocument/20217/FICCI-KPMG-Report-13-FRAMES.pdf