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Online Gambling

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 gambling

The 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, 1867

This 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, 1998

This 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, 1860

Section 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 gambling

The 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 jurisdictions

If 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.

Conclusion

Online 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.

Will Real, Clear, Legal Online Casinos and Sportsbooks Come to America Soon?

The United States of America has always had a difficult relationship, to say the least, with the idea of betting. At one time or another, almost every type of wager has been illegal, from lotteries to casino games to placing bets on the Super Bowl. But the worldwide trend is towards the legalization of gambling and the licensing of online casinos to allow people to play games at home.

A major trend started in the US in the 1960s when state lotteries began to be legalized. Previously, the states had largely banned any type of lottery since the scandals of the 1890s. When New Hampshire created a state lottery in 1963, the floodgates opened. Now, 42 of the states and the District of Columbia have state-sponsored lotteries. And even though there are still very old laws on the books prohibiting certain actions in regards to participating in lotteries, none of them are enforced any longer.

When states began to see the amount of money coming in from the sponsorship and promotion of lotteries, combined with the great advances in communication technology since the 1960s, it was inevitable that other types of games would be legalized. Beginning with Indiana in 2001, some states now have “second chance” lotteries that are played solely online, in addition to other games of chance such as keno.

Betting on Indian tribal land has also been legal for decades and is a very popular destination for Americans. As the state lotteries began to gain in popularity, other types of betting, such as horse race gambling and off track betting on horses, began to decline in participation numbers. In order to expand with the times, off track betting companies now offer wagering on horse races from all over the country in real time.

Possibly the final nail in the coffin preventing the United States government from embracing online gambling and offshore betting was the recent decision by the World Trade Organization that found the US discriminates in its gambling policies. While it allows state-licensed cross-border wagering on horses, it does not allow foreign licensing of such companies.

While the government lawyers during the George W. Bush administration attempted to claim that this is not what the US law does, their arguments have repeatedly fallen on deaf ears at the WTO. Antigua, a popular country for offshore online casinos and the country that brought the case against America, has seemingly won the argument in favor of online gambling being allowed in the USA.

Thus, from a complete ban on most forms of gambling in the late nineteenth century, to the legalization of state-sponsored lotteries and other games, to the recent WTO decision attempting to force open America for all kinds of offshore casinos, the world is trending towards the legalization of betting on sports and playing casino games. This article does not even mention the enormity of casino-centered tourist destinations in the country such as Las Vegas, Atlantic City, Northwest Indiana, and Indian casinos. It seems like the entire world — except for the US Congress and Justice Department — is accepting of online gambling.

What Countries Allow Online Gambling

The world of internet gambling is strictly regulated and it is important to first be aware of what countries allow online gambling before you start. Online casinos have experienced a steady growth in popularity over the past few years, with more and more people registering with sites in order to enjoy their favorite casino games.

You will find a few countries around the world where this practice is legal and many of them house servers that are accessible to people residing in countries where it is not. This means that if you live in a country where gambling online is banned, you might still be able to play by dialing into a server that is hosted outside of your country.

The United States of America

It is true that more and more countries are realizing the benefits of legalizing internet gambling and are actively taking steps toward this. However, the law governing the prohibition of internet gambling in America is somewhat unclear. The estimate is that approximately 70 percent of US citizens make up the internet gambling population and suffer little consequences because of it. It may be that the situation is difficult to monitor and regulate because gambling online happens in the privacy of your home and not in the public eye.

Online Gambling Around The World

You can do a simple search online to find out what countries allow online gambling. The list below reflects a few of these where online gambling is legal:

Australia
Belgium
Canada
France
Germany
Gibraltar
Hungary
Ireland
Italy
Liechtenstein
Macau
Malta
New Zealand
Panama
Philippines
Poland
Russia
Scandinavia
Singapore
Spain
Switzerland
Countries like Argentina, Mexico and a few Asian countries have all started the process of legalizing online gambling.

Enforcement and Regulation

Although the internet gambling industry is heavily regulated, experts admit that it is difficult to monitor because of its fairly anonymous nature. This poses a problem where online gambling is banned because it is virtually impossible to pinpoint players in the country who sign on from their homes. This begs the argument that why ban online gambling at all if it is so easily accessible and difficult to monitor? Regulation remains easier than prohibition in most cases and the trend seems to show that more and more countries are realizing this.

It is best to properly investigate what countries allow online gambling to ensure that you are on the right side of the law when enjoying your favorite casino games. This will also guarantee that you get to keep whatever winnings you make online.