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Online Poker Gaming has seen a diverse judicial interpretation, in terms of its underlying principle: skill or chance. Having understood the basic functioning of Poker, the present article seeks to expand on the legal perspective in India, with respect to Poker gaming, online and offline.

Legal Perspective

Gambling, being a state subject, is heavily restricted in India, majorly through The Public Gambling Act, 1867, barring a few state jurisdictions, such as in Goa, Nagaland, Sikkin, etc. This means that although, there is no specific legislation that defines ‘game of skill’ and ‘game of chance’, it based mostly on legal precedent. Due to lack of any proper regulation, the trend followed for approval is with the judicial bodies, since they have also shifted the responsibility of charting out a legal framework for the same, with the State. However, a non- profit organization, by the name of All India Gaming Federation has been established, with a panel of leading industry experts, which allows registration and regulation of skill based games, online (flows from the ‘Charter of Online Games of Skill’).

The general perception with regard to online gaming, as per legal precedent mandates the predominance of skill over chance, for any game, involving real-time money, to not be classified as gambling. A series of judgements over the years, along the lines of State of Bombay v. R.M.D. Chamarbaugwalal AIR 1957 SC 699, M.J. Sivani & Ors. v. State of Karnataka 1995 6 SCC 289, Dr. K.R. Lakshmanan v. State of Tamil Nadu AIR 1996 SC 1153 concludes that any game, which is predominantly functional on chance, regardless of an added element of skill shall not be legal. However, as per Manoranjithan Manamyil Mandram v. State of Tamil Nadu AIR 2005 Mad 261, a game is a mere chance based or skill based is a question of fact, to be decided on facts and circumstances of each case. For a lack of uniform legislation in this regard and due to the discretion of states with respect to formulation of gaming enactments, where states like Bihar, Chandigarh, Chhattisgarh, Haryana, Himachal Pradesh, etc. merely adopted the Central Legislation, many states enacted new statutes to govern gambling and betting like Andhra Pradesh, Assam, Goa, Daman and Diu, Gujarat, Kerala, Bombay, Rajasthan, etc. Only Sikkim and Nagaland formulated rules for online gambling, there is no clarity with regard to poker being considered a game of skill or game of chance and even less so on regulations for online gaming. Due to lack of proper legislation, there is a grey area that exists, with regard to the regulation of online gaming. The decision of the Delhi District Court in M/s Gaussian Networks Pvt Ltd. v. Monica Lakhanpal and State of NCT, Suit No 32/2012, seeking to provide proper guideline for regulation of online gaming, was subsequently overturned in 2016. The Delhi District Court had observed that the degree of skill prevalent in games played in the physical form cannot be equated with the degree of skill involved while game was played online. The Court seems to have assumed that the degree of chance would increase in online gambling; and there was a possibility for manipulation of outcomes by cheating and collusion. Further, due to an absence of proper legislations for online gaming, it is presumed that the primary nature of the games in question, as considered in physical form, shall subsist in the online form as well, barring a few technical differences.

Many scholars and poker players argue that it remains to be a game of skill, for the purpose of the gaming enactments. As per a study carried out by Computer Scientist Roman Yampolskiy, it was concluded that Poker is a game that requires specific skill set.

The gaming enactments/court rulings of Indian state shave taken opposing views, in this regard. Legislatively, the states of West Bengal, Nagaland, Sikkim and Karnataka remain to be few who recognise poker as a game of skill. As per Indian Poker Association v. State of Karnataka 2013 SCC Online KAR 8536, it was held that poker, if played as a game of skill, does not require a license and police cannot interfere with such game being played/conducted. Further, the game of poker is ipso facto not included within the purview of state legislation on betting and gambling.

However, the High Court of Gujarat in Dominance Games Pvt. Ltd. v. State of Gujarat & Ors, 2018 1 GLR 801- distinguished between Texas Hold ‘Em poker and rummy stating that rummy is a game of skill while poker is a game of gambling and betting as an inseparable part of the play, thus being classified as a gambling activity under the Gujarat Prevention of Gambling Act, 1887. This judgement relied on Supreme Court’s decision of State of Andhra Pradesh v. K. Satyanarayana 1968 CriLJ 1009 which held that “the game of Rummy is not a game entirely of chance like the 'three card' game. The three-card game which goes under different names such as 'flush', 'brag' etc. is a game of pure chance” and stated that poker being a necessary corollary of the same falls in the category of game of chance. Therefore, poker is prohibited in Gujarat. Additionally, even in Nasir Salim Patel v. State of Maharashtra & Ors W.P. (Criminal) 427 of 2017, the Bombay High Court observed, albeit in a cryptic manner that poker is a game of chance, not skill (though not specifically referring to poker but used the phrase “game of cards”). However, in an online medium, web-based betting is a prohibited offense in Maharashtra under the Bombay Wager Act, 2017, making real-money poker illegal in Maharashtra.

Barring a few states, like Sikkim, Nagaland, Maharashtra, etc., with respect to the online medium, there is much uncertainty that surrounds the play of poker, which creates ambiguity over commercialisation of the game, in the absence of an explicit prohibition. However, most major online poker domains have specific adaptations that ensure the play of poker in an effective manner, while incorporating elements of skill within the game, to ensure the preponderance of the same over chance and ultimately avoid any current or future repercussions. These are as follows:

  1. An explicit online disclaimer on their website stating prohibition of real money services in particular states of Assam, Odisha, Sikkim, Telangana, Gujarat and Maharashtra.
  2. Proper rules and strategies described on the website that implicitly emphasise on the application of skill, during game play.
  3. Further, free versions of the game are also provided in order to allow the players to practice their strategies distinctly offered, before investing real time money in the game.

As noted above, incorporation of an element of skill in a predominantly chance based game, even on an online medium, allows stable ground for legal cover and avoidance of punitive action, therewith.

For lack of proper legislation, the activity of gambling can additionally be covered under the following legislations, for domestic operators:

  1. The Lottery Laws (The Lotteries (Regulation) Act, 1998.
  2. Section 294A of the Indian Penal Code
  3. The Prize Competition Act, 1955
  4. The Information Technology Act, 2000 wherein, the internet medium providers are regulated and the Government of India and the Courts, may pass orders for blocking such domains, after being convinced of the presence of the website hosting unlawful content.
  5. The Information Technology (Intermediary Guidelines) Rules, 2011, within which the internet intermediaries are required not to knowingly host/publish information ‘relating to or encouraging gambling’.
  6. The Prevention of Money Laundering Act, 2002.
  7. Payment and Settlements Systems Act, 2007.
  8. As per Circular No. 15 of 2015 issued by the Central Board of Direct Taxes, e-wallets or virtual card accounts maintained with offshore online gaming/ poker websites being akin to bank accounts with inward and outward movement of cash, the valuation and declaration of such accounts must be made as in the case of a bank account. Under extant Foreign Direct Investment (FDI) Policy of India, FDI in lotteries and gambling is prohibited.

For operators located outside India, the applicability of Gaming Enactments, the Prize Competition Act and the Lottery Laws is slightly ambiguous since there is no particular provision for treatment/extra-territorial applicability and enforcement of the said laws against foreign entities. Furthermore, each state law will have to be individually scrutinised for any such activity conducted within its territory, in collaboration with a foreign entity. Additionally, the websites which are internationally placed may be blocked under the IT Act, if found. The Foreign Exchange Management Act, 1999 and the Current Account Rules explicitly prohibit outward remittances and therefore, will be applied to outward remittances to offshore gaming operators. However, the provisions under Prevention of Money Laundering Act and the Payments and Settlements Systems Act shall not be incorporated in this instance.

Conclusion

Poker, as a means of entertainment, has been in prevalence for over 200 years, which transitioned from the physical medium to the electronic medium in no time, and is now compounding into a seemingly commercial activity in itself. The ensuing debate of skill v. chance gets enhanced, when it encounters the regulatory mechanism, leaving a significant level of divide between the existing legislations and development of time and technology. For now, the ingenuity of twisting chance in one’s favour for commercial gain, whether online or offline, shall help poker maintain the position of one of the most played forms of entertainment of all times.