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Introduction

Online Poker gaming has seen a resurge in the past few years, with a cosmic shift in the gaming industry, leaning towards a dynamic combination of technology and entertainment. The present article, forming Part 1 of a two-part series on Online Poker Gaming, expands on the basic idea of Poker as a game, played online or offline and the prevalent international trend, keeping in mind the Covid-19 pandemic.

General Trend

Poker, a card game, historically enjoyed as a leisure activity, has lately been commercialised, forming a major part of the Indian gaming industry. Although various versions of the game exist (Texas Hold ‘Em, Omaha, etc.: basis varying levels of pot limits), the basic principle for the same remains common: wherein each player is required to put down some amount of money, cards are dealt from a standard 52-card deck and speculations are made by each player over their set of cards, since they remain hidden. At the end, based on whoever has the biggest hand, wins the round, and takes away all the money that was put together for the same.

The game is centred around the elements of chance, where it is distributed equally among the players, depending on the kind of cards dealt to each, the outcome might depend largely on the basis of how a player chooses to use the cards dealt to him, thus employing skill therein. This principle, as per the skill v. chance debate, goes in favour of poker largely being classified as a game of skill, as against a game of chance or gambling, since it involves real-time money.

Poker Games Online: How They Operate

As mentioned earlier, traditionally, the structure of any game of poker remains the same, with a standard procedure and uniform rules governing the game. However, difference comes in through variations, which depend mostly on the pot limit or dealing with cards (community or hole). A few major variations of the game are as follows:

  1. Texas Hold ‘Em: Most popularly played; provides for formation of best five - card combination of two hole cards (dealt personally to the player) and five common cards dealt on the table.
  2. Pot Limit Omaha: Same principle as Texas Hold ‘Em, requires forming best five-card combination out of the two hole cards and the five common cards; however, pot limit is capped.
  3. Omaha Hi- Low: where the pot money is split in half- between player forming best high hand and best qualifying low hand.

These being the three major variants of the game, have multiple other sub- categories and newly evolved mutations, for example: Crazy Pineapple, Hold ‘Em ++, Stud, Razz, Horse, etc.

The rules of poker remain uniform throughout, with 10 forms of Hand Ranking, 5 forms of action on the table and 4 kinds of Betting Rounds. An understanding of these is imperative for a basic proficiency in Poker. The employability of specific skill is separately considered.

In India, online poker is offered in multiple web domains, with options of playing free or with real time money. The top 4 leading domains, based on the number of users playing with real time cash, in this category are:

  1. Poker52
  2. Adda52
  3. PokerStars.in
  4. Spartan Poker

Many poker players that invest real - time money rake in considerably high winnings, which are exposed to the taxation mandate, as per Section 194B of the Income Tax Act, 1961. In order to play with real money, the players link their bank accounts directly or indirectly (through UPI, Paytm, etc) and select an amount for which they wish to buy ‘chips’ or virtual currency, in order to play. When a player decides to cash out (or convert the chips into real money), the same is transferred to the linked bank account, subject to TDS deduction, which stands at 30% on net winnings (Total withdrawal - Total Deposit), from withdrawals during financial year, in excess of INR 10,000. Any amount of net withdrawal lesser than INR 10,000, in a single day (midnight to midnight) is not subject to TDS. This is a uniform policy for all online poker gaming platforms, as notified on their websites.

International Trend

In the United States, the ‘dominant factor test’ is applied by many States to determine whether a particular game is skill based or chance based. This test requires to determine answers to the following questions:

  1. Is it impossible to win without skill?
  2. Does an amateur have the ability to participate?
  3. Whether skill or competitors’ efforts sufficiently govern results?
  4. Are participants aware of the skills involved in the game?

Therein, poker is considered to be a game of skill since more skilful players will always win over novice players. In Australia, as per the Interactive Gambling Act of 2001 (IGA), with its 2017 amendment, interactive gambling services are inter alia prohibited and are subject to regulation. These interactive gambling services, referred to as ‘online casinos’, include online poker. In France, Poker as an offline game, in casinos is allowed and all online activities are regulated by ARJEL (Autorite de regulation des jeux en ligne) licensed operators.

With the Covid-19 pandemic, a large number of the global population turned towards online gaming, in general, for respite. Consequently, the gaming industry saw a growth of 35-40%, at a global scale. As per reports, the Indian online gaming industry is set to expand to almost thrice its revenue by 2023. The time spent by people online has compounded, rendering even the online poker platforms extremely profitable. Due to a worldwide lockdown, poker players transcended national boundaries, seeing an overall increase by 255%, leading to a sudden upsurge in the revenue of casinos in different locations. This overall growth has also provided enough incentive to the gaming companies to update their infrastructure and platforms, to help provide their players a seamless experience.

The above is facilitated by the recent change in legislative framework of USA, in 2018 legalising betting. In a few states, such as Nevada, Pennsylvania and New Jersey, online betting is also regulated, paving way for a larger ambit of online poker and allowing online casinos, among other activities. With Canada being largely unregulated and Mexico seeking review of its legislations, the expanding market dynamics are witnessing a welcome change.