Module 6

MODULE - 6

BETTING IN SPORTS

6.1 INTRODUCTION

Betting in sports is the activity of placing wager on the unpredictable outcome of the sport. This
outcome can be the result of the match or any decided occurrence or non-occurrence of particular
event in the match. This betting in sports varies by culture and region. But in majority bets are
placed in sports like soccer, football, baseball, basketball, mixed martial arts, and boxing at both
amateur and professional levels. This also extends to racing sports such as auto racing and horse
racing. In modern days, betting is so common in sports with the advent of internet. But,
throughout the history, betting in sports is always accompanied with negative effects to the
sports. Manipulation of sporting event, involvement of black money and antisocial nature of
betting which allows only a few people to win are seen as negative aspects of betting.1

BETTING
IN SPORTS

LEGAL ILLEGAL
BETTING BETTING

This betting in sports can be either legal or illegal. Any such betting which is approved and in
accordance to the law is a legal betting, if not it becomes illegal betting. Illegal sports betting are
run by various private enterprises. Unlike legal betting, the bets are not taken upfront and are


1 Papaloukas, Marios, Betting on Sports Events (November 21, 2009). IASL International Congress, Warsaw,
November 19-21, 2009. Available at SSRN: https://ssrn.com/abstract=1527576, Accessed on 15 February 2019

collected only when the bet is lost by the bettor. So this creates a possibility of debt for the
Bettor. By which other criminal elements are joined and increases the illegality.

Before the emergence of internet, betting is done through a bookmaker or sports book. This term
“book” refers to the book used by the wage brokers for tracking wages, payment and debts. This
profession of accepting wagers and taking bets is known as book making. But nowadays, with
the advent of internet, betting is brought online and it is more convenient than ever. This online
betting offers more such as accessibility and safety with money. By these, online betting
continues to increase in popularity day by day.

Betting in sports is done in many countries, but only some countries have legalized it. While in
other countries due to non-approval of betting, people tend to involve in illegal betting. This
subject of “betting in sports” has varied effects and internationally countries started approving it
due to its inevitability. For example, in the United States of America it was made illegal for the
States to authorize sports betting under the Professional and Amateur Sports Protection Act of
1992 (PASPA). Hence betting in sports was made effectively illegal. But States like Delaware,
Montana, Nevada, and Oregon were grandfathered and exempted from the effects of the Act,
since they had pre-existing sports betting frameworks.2 Despite this prevention by Federal law,
in 2012 the state of New Jersey enacted a law allowing sports betting to take place in the race
tracks of New Jersey and challenged the authority of the federal government. In 2018, with the
help of the decision of Supreme Court of the United States of America in the New Jersey’s case,
Murphy v. National Collegiate Athletic Association, the ban on betting was reversed and the
Professional and Amateur Sports Protection Act of 1992 was struck down. By this decision,
other states in United States eventually started legalizing sports betting.

6.2 GAME OF SKILL AND GAME OF CHANCE

Betting and Gambling are as old as mankind. It is known from history that, right from ancient
period till now not just rich people enjoy gambling but also the poor, due to the entertainment
value it offers. Several events in Ramayana and Mahabharata are reference to these activities.



2 "N.J. Gov. Chris Christie: "Let them try to stop us" from sports betting", May 25, 2012,
Availableat:https://www.cbsnews.com/news/nj-gov-chris-christie-let-them-try-to-stop-us-from-sports-betting/ , Accessed on 15
February 2019

Cambridge English Dictionary defines gambling as “the activity of risking money on the result
of something, such as a game or horse race, hoping to make money”.3 Betting is also known to
be a part of gambling. The term “betting” is generally considered synonymous with wagering,
however, it alludes to antes in connection with events in the nature of races or matches between
individuals or teams.4

Though both Betting and Gambling are primarily wagers, there is a slight difference between the
two terms. Wagering, gambling and betting are often mistaken to be synonymous. The Madras
High Court in Public Prosecutor v. Veraj Lal Sheth5, explained the distinction as follows:

The principal distinction between gaming and betting or wagering is thus immediately apparent;
in gaming the stake is laid by the players upon a game, the result of which may depend to some
extent upon the skill of the players, but in a bet or wager, the winning or losing of stake depends
solely upon the happening of an uncertain event.

Therefore, one may conclude that wagering includes within its ever-so-wide meaning, gambling,
betting and gaming. Gambling entails the occurrence or non-occurrence of an unpredictable
event. An important distinction between betting and gambling is that in gambling, the stakes or
wager is placed on an event without any clue of the outcome; whereas, in betting the stakes are
placed on an event, the outcome of which is based on the performance of the players, influenced
by their skill.

In the case of K.R. Lakshmanan v. State of Tamil Nadu & Anr.6, the Supreme Court while
considering whether horse-racing was a game of skill or chance. It observed that the outcome in
a horse race depends on several factors like form, fitness and inherent capacity of the animal, the
ability of the jockey, the weight carried and the distance of the race, which are all objective facts
capable of being assessed by persons placing the bets. Thus while distinguished game of skill
and game of chance the court stated that,


3 Available at: https://dictionary.cambridge.org/dictionary/english/gambling#dataset-business-english, accessed on
1st May 2019
4 Sethi, Sethi’s Law relating to Gambling, Betting, Lotteries and Clubs 47(Law Publishers(India) Pvt. Ltd., Allahabad,
3rdedn).
5 AIR 1915 Mad 164.
6 AIR 1996 SC 1153.

[In a] game of skill […] although the element of chance necessarily cannot be entirely
eliminated, is one in which success depends principally upon the superior knowledge, training,
attention, experience and adroitness of the player.

In RMD Chamarbaugawala v. Union of India7, the Apex court relied on the ‘skill test’ to decide
whether an activity is gambling or not. The court held that competitions which substantially
involve skills are not gambling activities but are commercial activities, protected under Art.
19(1)(g).

Analysis of the aforementioned decisions brings out two principles. Firstly, prize competitions
and contests, where the winner is determined by draw of lots are in the nature of gambling and
cannot be extended protection under Article 19(1)(g) of the Constitution of India. Secondly,
games where preponderance of skill dominates, that is sports betting cannot be considered
gambling and are protected under the Constitution.

6.2.1 Foreign Interpretations

While interpreting foreign decisions, the distinction between game of shill and game of chance,
is given in the Canadian case of Rex v. Fortier8 as,

“It is a game determined entirely or in part, by lot or mere luck, and in which, judgment,
practice, skill or adroitness, has honestly, no office at all or are thwarted by chance’. Whereas a
‘game of skill’ is one in which, nothing is left to chance and in which, superior knowledge and
attention or superior strength, ability and practice, gain victory.”9

In a study carried out by the Computer Scientist Roman Yampolskiy, it is concluded that Poker
is a game that requires a specific set of skills and some of those skills include:10

i. The ability to precisely calculate probability of a needed card coming on a turn;
ii. The skill to read opponent’s behavior and body language; and
iii. The competence to apply strategic concepts such as “semi-bluffing and playing for

implied odds.”


7 AIR 1957 SC 628.
8 Rex v Fortier 13 Que K.B. 308
9 ibid
10 Roman Yampolskiy, “Game Skill Measure for Mixed Games” 1:3WASET 308-310 (2007).

By this, a sport or athletic event naturally falls in the purview of game of skill. Since factors like,
strength, practice, ability and form will contribute in the win of the team. But sometimes, in
sports element of chance also exists in times like winning of toss. It is seen that both these
element of skill and chance coexist in any sport. A game of chance and a game of skill are
distinguished on the basis of characteristics, as to what dominating element that determines the
result of the game is.11 In the case of State V Gupton12, it was even held that any athletic or
sporting game is not a game of chance but a game of skill. This element of skill was recognized
in UK’s Gambling Act of 1853 and also in its Indian counterpart, Public Gambling Act of 1867.

6.3 COUNTRIES WHERE BETTING ON SPORTS IS LEGAL

Now we have seen that in United States of America, each state is eligible to make sports betting
legal. Likewise there are other countries where betting in sports is approved by law which has
various other impacts, culturally and economically.

6.3.1 ARGENTINA

Throughout the years, unlike many countries around the world, Argentina has generally
exhibited a passive and welcoming approach to betting activities. Argentina has a history of
betting in sports which traces back to 1880s. Betting was usually done on soccer and horse race.
But in 2018, Argentina banned betting on soccer results. As of now betting is made legal only for
horse races. Horse racing has traditionally provided an outlet for people of Argentine to have a
bet. With several large tracks in Santa Fe, San Luis and Buenos Aires, Argentina flies the flag for
South American racing. Betting in horse races is considered legal only when the betting is done
at race tracks or designated betting agencies. The internet started booming in early 2000s and
subsequently it helped the growth of online betting games. The government of Argentina did not
take as hostile an approach to this new form of betting as many other countries. Instead of
issuing a prohibition, the authorities tried to regulate online gambling through various provincial
laws and licenses.


11 Peo v Lovin 179N.V.164
12 30 N.C. 271

6.3.2 AUSTRALIA

In Australia, on-track race betting was made legal in 1810 and over all sports betting was
legalized in 1980. Only a few sports betting are illegal in Australia. Most professional events are
fair game. The in-game advertisements on television and radio during certain times to protect
children from a flood of gambling promotion are the restrictions in Australia. The timings
allowed for betting advertisements varies from half-an-hour before a sporting event begins right
through the last five minutes before commencement. The government introduced a code of
practice13 for these. In the gambling reports 2017, Australian used around 25% of the money
they gambled in sports betting14. In the sports betting more than half is wagered on the major
codes in rugby league and Aussie rules football. Statistics from the 2015-16 financial year
showed sports betting expenditure in Australia increased from AUS$815 million ($609m) to
AUS$921m ($690m).15

Sports betting help government in generating revenue but there are also other effects of such
betting. There have been many incidents in Australian sport where the expansion of gambling,
and the problems it creates, has been brought into question. Due sports betting, there were two
high profile incidents in the National Rugby League (NRL). In 2010, former Canterbury-
Bankstown player Ryan Tandy was found guilty of match fixing and he was banned for life. In
2014, Tandy was found dead after an apparent drug overdose. In 2017, Wests Tigers player Tim
Simona was banned for life from the NRL after he was found to have placed bets against his own
team on multiple occasions. In 2011, former Collingwood players Nick Maxwell and Heath
Shaw from Aussie rules were fined and suspended. After an investigation it was discovered that
they shared inside information with their friends and family. Even in the sport of Tennis,
Australian Nick Lindahl was banned for seven years and fined AUS$47,580 ($35,597) for fixing
of a match in a tournament in 2013.16


13 Odds and betting ads in live sport broadcasts — the rules, by Australian communications and media authority.
Available at: https://www.acma.gov.au/theACMA/odds-and-betting-ads-in-live-sport-the-new-rules, Accessed on
12February 2019

14 Roy Morgan betting reports,2017.
15 Available at : http://www.espn.in/espn/story/_/id/23518003/which-countries-allow-gambling-sports-assessing-
impact-betting-world, Accessed on 12 February 2019
16 Available at : http://www.espn.in/espn/story/_/id/23518003/which-countries-allow-gambling-sports-assessing-
impact-betting-world, Accessed on 12 February 2019

6.3.3 GHANA

In Ghana, betting for all sports has been made legal by 1960. By the emergence of sports betting
in Ghana, the government was forced to regulate the process. For which the Gaming
Commission was created. With a law for sports betting in place, Ghanaians can now freely enjoy
the thrills European football, the NFL, NBA, and other sports. Many betting companies have
been set up in Ghana in the past few years. Sites like Safaribet or Premier Betting are used to
place a bet right then and there. Now with the use of mobile apps to bet online, betting on sports
has become far more convenient. These new bookies have recognized Ghana’s betting potential
and are already looking to extend their operations to other parts of the country. As the interest for
football betting grows, more and more markets are added to the offer, which makes sports
betting even more popular. Additionally, these companies and others are also opening new jobs
in the poor African country which supports Ghana’s economy. The unemployment level in
Ghana is pretty high and the government hopes that new betting operators can help. Not
everything is rosy, however. With sports betting being so popular in Ghana, it opens up the door
to problem gambling. Surprisingly, it has also led to a decrease in popularity in Ghanaian
football as fans are more excited by the big European leagues. Many sports betting operators are
hoping to fix this. For example, mybet.com, a new operator that has been online for more than a
year, has included Ghanaian football leagues in their offer and even promoting them instead of
the big guns. It’s a bold move to popularize African football and hopefully draw in big sponsors
and maybe even new jobs. In this way, the sports betting industry is hoping to help Ghana and
it’s clear that the positives are outweighing the negatives in this case.

6.3.4 MEXICO

In the history of Mexico betting and gambling stretches back to the Aztecs, and perhaps even the
Mayans. The Mesoamerican ballgame was played Mayan nobles, this game is known to be as
battle among the lords of the underworld and their earthly rivals and the losers were sometimes
sacrificed to the gods.

In Mexico, betting on all sports is made legal in both betting parlors and online. Betting in
Mexico is made legal with the help of variety of licensed land-based sports books in the country.

Online gambling has become a growing industry in the country, as the Interior Ministry licensed
more international betting operators. Sports bettors ought to be aware of sport book’s licensing
before they make any deposit due to the threat of many unregulated gaming markets. Mexico
embraces gambling, so bettors do not face prosecution for gambling online, but a bettor needs to
know their winnings will be paid. In spite of the freedom given, the lawmakers in Mexico still
attempt to pass a comprehensive gambling reform. The 1947 Federal Games and Draws Law
(Ley Federal de Juegos y Sorteos), is based on the provision from the Constitution of Mexico,

“To legislate throughout the Republic on matters regarding hydrocarbons, mining, chemical
substances, explosives, pyrotechnics, cinematographic industry, commerce, betting games and
lotteries, intermediation and financial services, electric and nuclear energy, and to enact labor
legislation implementing Article 123. “17

Betting operations in Mexico are controlled and licensed by the Mexican Ministry of the Interior.
This Mexican ministry of interior also known as SEGOB is a prominent lawmaker and has
introduced several pieces of legislation to update Mexico’s 70-year old gaming laws.

6.3.4 NIGERIA

Betting on sports in Nigeria was made legal by the National Lottery Act in 2005. This legalized
betting on all sports with restrictions on betting advertisements in televisions and radios.
Football, like everywhere in the world, is the favourite sport in Nigeria to bet on. Millions of
football fans in Nigeria, absolutely love the game and spice up the excitement through betting on
their favourite teams, players and matches. Especially a high rate of betting can be seen in
Nigeria when the people’s favourite teams. Most of these bettors bet on offshore online sports
book operators, which means they prefer online betting than retail betting. This is because some
cool features have implemented in online sports betting facilities such as live streaming of
matches, in-play betting, which satisfies their need to follow their gut feeling while watching the
game.

One of the biggest issues that are facing the Nigerian sports betting market is the inconsistency in
sports betting regulations between the state and federal levels. This is one important issue and


17 Constitution of Mexico, Art. 73, Section x

there is an urgent need in reviewing the betting industries in Nigeria. There should be a
consistency and strong oversight implemented across the entire country. One of the major issues,
in all countries that are poorly regulated countries like Nigeria are missing out extensive tax
revenues. In a similar way Nigeria is crippled by the proliferation of overseas sites which do not
pay taxes to it, however this is not the only issue. Due to the non-regulation, the National Lottery
Regulatory Commission is not sure about collection of taxes from state-licensed operators, which
in many cases may be leading to tax avoidance. There is also a growing concern of addictive
gambling problems in the country as around 30% of young adults bet on sports in Nigeria at the
moment.

However, there are many positive aspects of sports betting. The strength of sports betting in
Nigeria is seen to be growing at a rapid rate. The reports show that the Nigerians are betting
around $4.2 billion a year on sports, which is a number that surpasses casino betting by far, with
the $40 million the licensed casino industry brings18. The positive side of this industry is that
once the betting operators effectively taxed this will be a great boost for the entire country, as it
will be a good source of revenue. This is why these betting organization is crucial in the near
future with the before mentioned review of the regulations to occur and this will help the
domestic operators and the entire country benefit greatly from this.

6.3.5 UNITED KINGDOM

In United Kingdom, betting on all sports was made legal by 1961. It was estimated that within 6
months from the enactment of the law, over 10,000 betting shops have been setup in UK. Both
the retail and online betting are legal in UK. Betting can take place anywhere in stadiums and
major sports venues through betting operators who operate booths and bet cashiers by roaming
throughout the stadium.

Earlier during, 19th and 20th centuries when betting was not legal, punishments such as
imprisonment and fines were imposed on people for betting using United Kingdom Gaming Act,
1845. By which the state felt that they don’t have to deal with unregulated gambling disputes. In
fact, one of the reasons for the 1845 enactment was the clogging up of courts with gambling


18 Available at: https://www.btobet.com/en/stories/nigeria-promising-market-mobile-sports-betting-operators,
Accessed on 16 February 2019

disputes.19 The English parliamentarians believed that that this act of gambling in sports has
passed from higher class people to lower class people. 20They felt it was an act of leisure for
higher class but for lower class people they saw betting as a social evil which will worsen their
poverty. For instance, Admiral Rous argued that “the poor should be protected; but I would let a
rich man ruin himself if he pleases.”21 This is the reason why the 1845 legislation prohibited
betting in the common houses while it never bothered betting by the rich.

In 2009, players, coaches and match officials were found to be bribed in 200 matches, including
12 in the UEFA Europa League competition and three in the UEFA Champions League in a pan-
European police inquiry. Also in 2009, four players at Football League clubs are banned and
fined for their alleged involvement in a fixed match by the Football Association.

In 2010, Pakistan cricket players Salman Butt, Mohammad Asif and Mohammad Amir received
custodial sentences for spot fixing in cricket matches. This is one of the biggest cases in recent
years. In this case undercover reports from News of the world secretly filmed the fast bowlers of
Pakistan, Mohammad Asif and Mohammad Amir accepting money from a bookie named Mazhar
Majeed to bowl no balls at certain points in the match. Scotland Yard arrested the bookie in
charge of match fixing. The International Cricket Council (ICC) banned the captain Salman Butt
and the bowlers Mohammad Asif and Mohammad Amir for terms between 5 and 10 years. They
were also tried by the London court and were found guilty under Prevention of Corruption Act,
1906 and the Gambling Act of 2005 for conspiracy and cheating respectively. Salman Butt was
given prison sentence for two years and six months, Mohammad Asif for 12 months and
Mohammad Amir for 6 months.

While looking at positive effects, the premier league becomes the most viewed domestic sports
competition in the world due to the attractiveness brought by the sports betting. In the UK, the
industry is itself encouraged to play a vital role in preventing problem gambling.22 By the virtue
of Gambling Act, 2005, the bookmakers are forced to provide corrupt activity to the state
authorities. By which the chance of match fixing is also prevented. A voluntarily funded


19 Review of the Gaming and Lotteries Act, 1956-86, Report of the Inter-departmental Group, Department of Justice,
Equality and Law Reform, Ireland, 2000.
20 M. Clapson, Popular Gambling in English Culture, c. 1845 to 1961 (University of Warwick: 1989)
21 Ibid
22 Department of Culture, Media and Sports, United Kingdom, Gambling Review Body Report, Cm. 5206, July
2001

gambling trust, over seen by Gambling Commission to provide support for treatment, education
and research that would be a crucial counterbalance to deregulation.

6.3.6 INDIA

Gambling and betting are age-old activities in India. Several instances of these have been found
in Indian mythology and history. Likewise many of our ancient sources of law such as vedhas,
Naradha smrithis, Kautilya have recommended gambling with the control of state.

In Kautilya’s Arthshastra, gambling is defined as wagering with inanimate objects such as dice;
and betting as something that involved challenges and was concerned with cock fights, animal
races and similar contests.23

In 1949, during the constitutional debates24 though the addition of gambling under list II was
opposed by Prof. Shibban Lal Saksena, Shri Lakshminarayan Sahu and Sardar Hukam Singh
fearing that it would the conflict the principles of Mahatma Gandhi. But Dr. Ambedkar however
found the necessity to add gambling in the central list. This is because; the non-addition of
gambling in any of the lists will result in non-regulation of the activity. He thought that only the
entry of gambling can prevent the ill effects of it by controlling them. This power of state
government to make laws relating to gambling is given under, Entries 34 and 62 of List II of
Seventh schedule of Constitution.

As we know, gambling and betting are extensive terms, in which the distinction is known
through the determination of game of skill or game of chance. In India, horse racing is regarded
as a game of skill. The Supreme Court of India in the case of Dr. K.R Lakshmanan vs. State of
Tamil Nadu25 observed that:

“Betting on horse racing or athletic contests involves the assessment of a contestant’s physical
capacity and the use of other evaluative skills. Horse racing is an organized institution. There is
nothing illegal in horse racing: it is a Lawful sport. We have no hesitation in reaching the
conclusion that the horse-racing is a sport which primarily depends on the special ability


23 LN Rangarajan (ed.), Kautilya’s Arthshastra 347 (Penguin Books India Ltd., Calcutta, 1992).
24 Constituent Assembly Debates, Official Report, Vol IX, Sixth Reprint, Reprinted by Lok Sabha Secretariat, New
Delhi, 2014.
25 AIR 1996 SC 1153

acquired by training. It is the speed and stamina of the horse, acquired by training, which
matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better-
trained jockey can touch the winning-post. In view of the discussion and the authorities referred
to by us, we hold that the horse-racing is a game where the winning depends substantially and
preponderantly on skill.”

Along with this, in the case of State of Andhra Pradesh vs. K. Satya Narayana26, the Supreme
Court of India held that the “three cards” game which is known by different names such as
“flush”, “brag” etc., as a game of pure chance. But it held Rummy as a game of skill.

6.3.6.1 Central legislations

Despite the powers of states to make laws in the field of betting and gambling with entries in the
state list, there are central legislations which have effect on betting in India. Such as the Public
Gambling Act, 1867 and the Foreign Exchange Management Act, 1999.

Foreign Exchange Management Act, 1999

The Foreign Exchange Management Act, 1999 when read with Rule 3 and Schedule 1 of the
Foreign Exchange Management (Current Account Transaction) Rules, 2000, remittances of
income from lottery winnings, racing/riding, sweepstakes etc. are prohibited.

“Foreign Direct Investment” and “investment by a person resident outside India” are prohibited
in entities conducting “lottery Business includes Government/private lottery, online lotteries
etc.” and “Gambling and Betting including casinos etc.” through The Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations,
201727 and the Consolidated Foreign Direct Investment (FDI) Policy, 201728 issued by the
Government of India. National Policy of India in matters pertaining to foreign direct investment
and investment by a person resident outside India are reflected in the Consolidated FDI Policy
and the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident


26 AIR 1968 SC 825
27 Notification No. FEMA 20(R)/ 2017-RB, Reg. 15, 07-11-2017, available at:
https://rbi.org.in/scripts/BS_FemaNotifications.aspx?Id=11161 (last visited on 31-05-2018).
28 D/o IPP F. No. 5(1)/2017-FC-1, 28-8-2017, available at:
http://dipp.nic.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.pdf (last visited on 31-05-2018).

Outside India) Regulations, 2017. Similarly, collaborations for the purposes of gambling and
betting activities with any form of foreign technology, is also prohibited.

The Public Gambling Act, 1867
This act was enacted during the British regime and it is actually derived from British legislations,
the British Gaming Act, 1845 and the Betting Act, 1853. The main purpose of this act is to
punish gambling in public and regulate gambling in common gaming houses.
After 1935, when the Government of India Act, 1935 was enacted, due to the addition of
gambling and betting in the List II, this Public Gaming Act, 187 lost its status of central
legislation. By this the Act of 1867 became no longer applicable to whole of territory of India.
But the states had their option to adopt this act for their use. As a result of this, these 14 states,
Andaman Nicobar, Arunachal Pradesh, Chandigarh, Dadra and Nagar Haveli, Haryana,
Himachal Pradesh, Lakshadweep, Punjab, Madhya Pradesh, Chhattisgarh, Manipur, Mizoram,
Tripura, Uttarakhand have passed enactments to adopt the Public Gambling Act, 1867.
6.3.6.2 State legislations

Maharashtra and Gujarat
The Bombay Prevention of Gambling Act, 1887 applies to the States of Maharashtra and by
virtue of the Bombay Reorganisation Act, 1960 this act applies to Gujarat as well. This Act
prohibits and penalises ‘betting or wagering’. But under section 3 of the Act, “wagering or
betting upon a horse-race or dog race” are exempted. Along with this, “games of mere skill
wherever played” under section 13 are also exempted.

Telangana
The Telengana Gaming Act, 1974 was amended by The Telangana Gaming (Amendment) Act,
2017 to implement the objective of “the policy of zero tolerance against gambling which has
serious impact on the financial status and well-being of the common public”. These changes are

incorporated with the help of Ordinances of June29 and July30, 2017 introduced by State of
Telangana with the object of expressly prohibiting gambling as a whole, both online and offline.

This amendment seeks to completely eradicate the menace of gambling. This is due to its ease of
access and wide solicitation, several people, the youth in particular, are being addicted to online
gaming when played for stakes etc. This addiction is found to cause threat to the very public
order itself as it affects various sections of society including students and women.

Rajasthan

The Rajasthan Public Gaming Ordinance, 1949 provides that nothing therein shall be held to
apply to any game of mere skill, as distinguished from a game of chance and skill combined or
unless it is carried on in common gaming house. Thus, according to this ordinance, even games
of skill can be prohibited if not played in a common gaming house.

Tamil Nadu

The Tamil Nadu Gaming Act, 1930 applies to the State of Tamil Nadu, aims to “provide for
punishment for gaming and the keeping of common-gaming houses in the State of Tamil Nadu”.
This Act, excludes the City of Madras, which is governed by the Madras Police Act, 1888. Under
the Act of 1930, “gaming” does not include a lottery but includes wagering or betting, which for
the purposes of this definition are “deemed to comprise the collection or soliciting of bets, the
receipt or distribution of winnings or prizes, in money or otherwise, in respect of any wager or
bet, or any act which is intended to aid or facilitate wagering or betting or such collection,
soliciting, receipt, or distribution”.31

Games of mere skill are exempted from the prohibition contained in Sections 5 to 10, under
Section 11 of the Act. After the judgment in the case of Dr. K.R. Lakshmanan32, where horse-
racing was considered a game of skill, betting on horse-racing is legal in the State of Tamil
Nadu. The Tamil Nadu Betting Tax Act, 1935 provides for the structure of taxation with respect
to horse-races and pony-races in the State.


29 The Telangana Gaming (Amendment) Ordinance, 2017.
30 117The Telangana Gaming (Second Amendment) Ordinance, 2017.
31 Ibid., Explanation to Section 3.
32 K.R. Lakshmanan (Dr) v. State of T.N., AIR 1996 SC 1153.

The Tamil Nadu Prize Schemes (Prohibition) Act, 1979 has been enacted to “prohibit the
promotion or conduct of prize schemes in the State of Tamil Nadu”. Prize schemes are defined
under Section 2(b) of the Act. The State Government from Section 12 of the Act can exempt
prize schemes or classes from this prohibition.

Sikkim

The Sikkim Casinos (Control & Tax) Act, 2002 authorises the Government of Sikkim to grant
licences to businesses and individuals to operate casinos in the State. The discretion to grant
licences, authorizing gambling on certain days and making certain gambling houses legal is upon
the government by the Sikkim Regulation of Gambling (Amendment) Act, 2005. By Section 18
of the Act, The Sikkim Casino Games (Control and Tax) Rules, 200733 are made. These Act and
the Rules regulate the games of chance played in five-star hotels using a machine or instrument.
In July 2016, the Government of Sikkim, banned its local population from playing in casinos
situated in the State.

In India the first legislation to expressly permit and regulate online gaming is the Sikkim Online
Gaming (Regulation) Act, 2008. Under section 23 of this Act, The Sikkim Online Gaming
(Regulation) Rules, 2009 are framed. In Sikkim under licence from the State Government the
games which can be operated and played are given under Rule 3 of these Rules, read with the
Sikkim Online Gaming (Regulation) Amendment Act, 2009. They are Roulette, Black Jack,
Pontoon, Punto Banco, Bingo, Casino Brag, Poker, Poker Dice, Baccarat, Chemin-de-for,
Backgammon, Keno, Super Pan 9 and sports betting on games, which involve prediction of the
results of the sporting events and placing a bet on the outcome, either in part or in whole, of such
sporting event, and including football, cricket, lawn tennis, chess, gold, horse-racing, etc.

By Sikkim Online Gaming (Regulation) Amendment Act, 2015 the offering of “online games
and sports games” are restricted to the physical premises of ‘gaming parlours’ within the
geographical boundaries of the state.


33 Notification No.FIN/DSSL/2010/III(247)/818, Finance, Revenue and Expenditure Department, Government of
Sikkim, March 30, 2011

Nagaland

The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill
Act, 2015 is the only legislation in India to define “Game of Skill”. In which “Gambling” is
defined as the act of “wagering or betting on games of chance but does not include betting or
wagering on games of skill”. In section 2(5) “Wagering” or “Betting”, has been defined as “the
staking of money or virtual currency, whether or not it is equivalent to a recognized currency”. In
section 2(3), “games of skill” is said to “include all such games where there is preponderance of
skill over chance, including where the skill relates to strategising the manner of placing wagers
or placing bets or where the skill lies in team selection or selection of virtual stocks based on
analysis or where the skill relates to the manner in which the moves are made, whether through
deployment of physical or mental skill and acumen”.

In section 2(3) the explanation for ambit of “games of skill” is broadened as:

i. All Games provided in Schedule A of this Act shall fall under the category of “Games of
Skill”

ii. ‘Games’ which have been declared or determined to be ‘games of skill’ by Indian or
International courts or other statutes, or games where there are domestic and international
competitions and tournaments, or games which can be determined to be ‘games of skill’
shall further be entitled to be included in Schedule A.

iii. Games of skill may be (a) Card based and (b) action/ virtual sports/ adventure/ mystery
and (c) calculation/ strategy/ quiz based.

Detailed list of games that are considered to be ‘games of skill’ are laid down in Schedule A of
the Act. They are Chess, Sudoku, Quizzes, Binary Options, Bridge, Poker, Rummy, Nap,
Spades, Auction, Solitaire, Virtual Golf, Virtual racing games including virtual horse racing,
virtual car racing, etc., Virtual sports, including virtual soccer, virtual cricket, virtual archery,
virtual snooker/ bridge/ pool, Virtual fighting, Virtual boxing, Virtual wrestling, Virtual combat
games, Virtual mystery and detective games, Virtual adventure games, Virtual stock/ monopoly
games, Virtual team selection games and Virtual fantasy games.

In Nagaland Prohibition of Gambling and Promotion and Regulation of Online Gaming Rules,
2016 under Rule 3(1) only those individuals/ companies/ firms that are not engaged in
‘gambling’ are made eligible for a licence.

6.3.6.3 276 th law Commission Report

In 2013, when spot fixing and betting issue came into light in the celebrated game of cricket
during the Indian Premier League (IPL), two committees, Mudgal Committee and Lodha
Committee were formed. In which Lodha Committee suggested legalising betting and while
considering the same in the case of Board of Cricket Control in India v. Cricket Association of
Bihar34. The Supreme Court made a reference to the Law Commission to examine the issue of
legalisation of betting. This 276th Law Commission Report recommends primarily the need to
legalisation and regulation of betting and gambling.

In this report the Commission has discussed the history of betting and gambling in India, which
contains concepts that can be found in ancient history such as Ramayana, Mahabharata, Atharv
Veda, Rig Veda, Kautilya Arthashashtra, Yagnyavalkya Smriti, Brihaspati, Katyayana Smriti,
and Manusmriti. In this report the fact that gambling cannot be stopped it but it can be regulated
to become a good source of income is known from history.

Recommendations by the Commission,

As online betting and gambling are offered and played over media, Parliament can enact
laws on betting and gambling under Entry 31 of List 1 of VII Schedule of the
Constitution of India.
While prohibiting “gambling”, certain skill centric games should be given exceptions.
Only that operator who has valid license granted by the game licensing authority should
be allowed to provide betting and gambling services.
Two categories of gambling such as proper and small gambling based on higher and
lower income groups was suggested. In a ‘proper gambling’ category a person belonging
to higher income group can put higher stakes whereas in ‘small gambling’ a person


34 (2014)7 SCC 383

belonging to lower incomes are confined and they cannot be allowed to stake higher
amounts.
All transactions relating to betting and gambling are to be linked with Aadhaar/PAN card
of the operator and the participant in order to protect the public from ill effects, and
increase State supervision and transparency.
Protection of vulnerable section of society such as minor and people below poverty line,
etc. from exploitation should be in the interest of enactment.
In order to monitor every single transaction, transactions amongst or between operators
and participant/player have to be made cashless mandatorily and any such cash
transaction should be penalized.
The government would be able to generate revenue by the legalization and regularization
of betting and gambling by making it taxable under Income Tax Act, 1961, the Goods
and Services Tax Act, 2017 and other relevant Acts.
Along with this criminalization and penalization of Match-fixing and other sports frauds
were also suggested.

6.3.6.4 Lodha Committee

in the case of Board of Control for Cricket in India v. Cricket Association of Bihar & Ors.,35 the
Supreme Court in order to examine and make suitable recommendations for necessary
amendments in the Memorandum of Association and Rules & Regulations of the Board of
Cricket Control in India, constituted a Committee under the Chairmanship of former Chief
Justice, Mr. Justice R.M.Lodha. The Committee in its Report, distinguished match fixing with
betting. In a match fixing, the integrity of the game is compromised by attempting to change the
course of the match. In the report it is suggested that there is a need for separate treatment for
both. That is by punishing match fixing and regulating betting.

The Lodha Committee recommended the legalisation of betting, except for those covered by the
BCCI and IPL regulations. It also recommended that match/spot-fixing be made a criminal
offence. The Committee opined that a regulatory framework would enable the government in


35 (2014) 7 SCC 383

differentiating betting from match fixing. It recommended that following safeguards be provided
in the legislation regulating betting:36

(i) Regulatory watchdogs would be necessary to ensure that the betting houses as well as those
transacting there, are strictly monitored, failing which their registrations would be susceptible to
cancellation.

(ii) The Players, Administrators and others closely associated with the sport would be required to
furnish the details of their income and assets for the sake of transparency.

(iii) Licence would have to be issued to those placing the bets as well, with age and identification
details recorded.

(iv) Strict penal sanctions would have to be imposed on those transgressing the licence and other
requirements.

6.4 BLACK SOX SCANDAL

This fixing of World Series in 1919 is one of the biggest sport scandals of all times, which is
known as Black Sox Scandal. The reason for the match being fixed was the betting in the sport
of baseball.

In 1919 World Series, the American League champion Chicago White sox face the National
League champion Cincinnati Reds. In which Joseph Sullivan, an American bookmaker and
gambler paid players like, Scar Felsch, Shoeless Joe Jackson, Fred McMullin, Arnold
Gandil, Charles Risberg, George Weaver, and Claude Williams from White Sox around 10,000
dollars to fix the series. On account of this all the eight players were banned for the rest of their
lives from playing professional baseball. This act of the players also banished them from post
career considerations like Baseball Hall of Fame. As the result of this scandal, to restore the
integrity of the sport, Judge Kenesaw Mountain Landis was appointed as the first Commissioner
of Baseball, with absolute control over the sport.


36 Report of the Supreme Court Committee on Reforms in Cricket at 61-62 (December, 2015).

Before this incident in 1989, Peter Rose, an MLB manager was banned from baseball for betting
on games when still being a manager.

6.5 CONCLUSION
Betting in sports has resulted in many scandals and immoral activities in the field of sports such
as match fixings, spot fixings and point shavings. Such disgraces affect the integrity of the sport
largely. Despite these happenings the practice of betting keeps increasing among the people
around the world. This is due to many factors such as chance to win money and the
entertainment value it offers. Along with these, lot other factors contributed to the growth of
betting such as development of internet. In this era of internet online betting has reached people
more due its accessibility and the convenience it offers.
Many countries in the world tend to ban betting just because it is a game of chance and not skill.
But just like a sport, betting can also be viewed as a game which requires predominant skill. In
all sports victory is achieved only using superior knowledge about facts like training, experience
and the statistics of the player. Similarly betting requires the same amount of application of mind
to predict the outcome of any event.
Apart from these whenever a major sports event takes place, people from different countries
come to watch the sports, by which there is an economic benefit when the tourists spend money
in betting. Overall a regulated and approved betting in a country benefits both the people and the
government through the revenue and employment options it generates.