India’s gaming regulations are believed to be exceedingly convoluted and open-ended, with ambiguous language that makes clear interpretation difficult. The fundamental cause of this flaw is that the regulating rules, which were enacted before India’s independence, are highly antiquated. In India, gambling rules were traditionally overseen by the Public Gaming Act of 1867, which was enacted by the central government.
Betting and gambling were declared a part of Entry 34 of the State List after India’s independence and the Constitution came into effect in 1950. In layman’s terms, this means that state governments in India would be responsible for drafting betting and gaming legislation for their various states.
Any game of skill will not be treated as gambling or illegal, according to the Public Gaming Act of 1867, but any game of chance will be treated as gambling and will be illegal. However, when we talk about gambling today, we mean both the classic and modern senses, which encompasses both physical and online gambling. However, most states enacted separate legislation after independence by amending the Central Act.
Our country has a number of gaming regulations. The first is the Central Law, which governs everything. Second, which is governed by state regulations, and third, which change depending on whether the game is physical or online, and whether it is a game of skill or a game of chance.
We’ll delve into the murky waters of what defines a game of skill vs a game of chance, and after a 10 to twelve-minute read, we’ll be able to tell the difference between the two.
Games of Skill and Games of Chance
In its most basic form, ‘gaming’ is defined as “the practise or act of gambling.” An agreement between two or more people to play a game of chance together for a stake or wager that will become the winner’s property and to which everyone contributes. The inclusion of a payment or consideration, chance, and prize or reward are all elements of gaming.”
Instead of chance, a “game of skill” is dependent mostly on a player’s mental or physical degree of proficiency. One of the most important advantages of a skill-based game is that it allows participants to test their ability in the sport. These games encourage players to become familiar with a set of rules while also looking for methods to improve and adopt new techniques through repeated practise. It is a myth that skill games do not have a chance element; in fact, they do to some level. Individual skills, on the other hand, determine the success rate.
A “game of chance,” on the other hand, is primarily determined by a random factor of any kind. In games of chance, talent is used, but success is determined by a larger amount of chance. Games like cards, roulette, dice rolling, and even picking a numbered ball are considered chance-based games. It’s important to emphasise that the participants have no control over the outcome of the game. Blackjack and roulette are two examples.
Naturally, there are aspects of chance and elements of skill in any game. To evaluate whether a game is a “game of chance,” it must be determined that the element of chance predominates over the element of skill. In a nutshell, a game of chance is one in which the outcome is determined by luck rather than ability.
The Difference Between Skill and Chance
A substantial distinction exists between a game of skill and a game of chance. To begin with, the main distinction is “who” the player is playing against. The player is engaged in a game of chance if he or she is playing against the house (in simplified terms, the casino itself is referred to as the house). When a player is matched against other players of similar skill levels, however, the game is considered a skill game. Furthermore, any individual who can successfully and without a doubt demonstrate that a certain game incorporates the significant usage of skills such as statistics, math, and strategies, as well as a minor element of luck or chance, the game will be classified as a game of skill.
There are currently a number of games, such as Ludo and online rummy, that are attempting to persuade the authorities to classify it as a skill game. It may be safely assumed that the dispute over which games are skill-based and which are not will rage on indefinitely until a proper means of resolving this issue is devised.
The good news in this convoluted issue is that there are numerous legal dictums, particularly by the Hon’ble Supreme Court of India, on matters relating to defining specific groups as games of skill versus games of chance.
Several lawsuits have been brought by gaming groups and organisations to define them as a skill game in order to get legal status and avoid being labelled as illegal. When the Hon’ble Courts of India are confronted with tough questions, they respond with an elegant explanation of their view of the subject matter. From time to time, the courts have carefully evaluated skill and chance in each game to find the preponderance of one over the other and whether betting in such games is gambling. The following are some key Indian court decisions that clarified the distinction between skill and chance games.
In Manoranjithan Manamyil Mandram v. State of Tamil Nadu (2005), the court concluded that determining whether a game is one of chance or skill is a question of fact that must be determined based on the facts and circumstances of each case.
Rummy as a Game of Skill
In the case of State of Andhra Pradesh v. K. Satyanarayana (1968), the Hon’ble Supreme Court interpreted the difference between the three-card games ‘Teen Patti’ and ‘Rummy,’ holding that while the former was a game of pure chance, the latter required some skill because one must memorise the fall of the cards and the building up of Rummy requires considerable skill in determining which cards to keep and which to discard. As a result, the Apex Court determined that the game of rummy had a higher prevalence and hence qualifies as a skill game.
Horse Racing as a Game of Skill
While dealing with the issue of horse racing in the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu (1996), the Hon’ble Supreme Court held that horse racing is not to be considered ‘gambling’ or ‘gaming,’ but rather a game of ‘mere skill,’ and that the expression ‘mere skill’ would mean a substantial degree or prevalence of skill. This was considered as such on the grounds that horse racing is based on the animal’s intrinsic potential, the jockey’s skill and expertise, the horse’s shape and physical fitness, the weight it can carry, and the race distance, all of which are fair facts that racegoers can judge or study.
Poker as a Game of Skill
In the case of Indian Poker Association (IPA) v. State of Karnataka (2013), the Hon’ble High Court of Karnataka held that Poker is a game of skill and that no licence is required for conducting a game of skill, including Poker, in club premises intended for recreational purposes, as long as it is conducted in accordance with the law enacted by the State. It went on to say that because poker isn’t classified as gambling under the West Bengal Gambling and Prize Competitions Act, 1957, law enforcement officers can’t meddle with it.
However, in Dominance Games Pvt. Ltd. v. State of Gujarat (2017), the Hon’ble Gujarat High Court, citing the Supreme Court’s judgement in K. Satyanarayana’s case (mentioned above), found that Poker is a “game of chance.” However, the same Court is currently hearing an appeal of this judgement.
To today, opinions differ on whether poker is a skill-based game or not, and internet poker is frequently deemed unlawful. Several service providers and web companies have even tweaked the game to make it more difficult. To support this, some websites have removed the element of luck from the game, and as a result, the players’ talents have become more important in determining the game’s victors.
Fantasy Sports- Game of skill or Game of Chance
In layman’s terms, fantasy sports games are games in which users create fantasy teams based on pre-determined criteria from a chosen group of players who are scheduled to play live games on a specific day. Users must then pay an entry fee to enter a contest and join a pool for distribution among users after fantasy sports game providers deduct a specific charge (the App). Users pick their teams depending on how well they use their knowledge, attention, experience, and access to information about the sport. The user then accumulates points based on the draught team he has prepared to enter the competition pool.
The users are then rated depending on how many points their chosen players earn in the contest, according to a set of point-rules/scoring criteria specified by the service provider.
When it comes to the question of whether fantasy sports like Dream 11 are a game of chance or a game of skill, numerous High Courts have ruled that it is a game of skill after thorough consideration of various facts and situations.
In Varun Gumber v. Union Territory of Chandigarh (2017)9, the Hon’ble Punjab and Haryana High Court held that games including horse, boat, and foot racing, football, baseball, chess, and golf are games of skill and considerable judgement, not games of chance. In a fantasy game, however, a participant user who creates a virtual team will need to consider skill, knowledge, judgement, and discretion, as the participant will have to estimate the relative value of each athlete/sportsperson in comparison to all other athletes/sportspeople available for selection. He must research the athlete’s skills and limitations in order to predict the game’s outcome and his chances of winning a competition. The Hon’ble Court went on to say that a better outcome in a fantasy sports game like Dream 11 is mostly due to the user’s superior knowledge, judgement, and attention to detail. It was thus deemed to have involved an element of skill that had a major influence on the outcome of the Dream 11 scenario, thus falling outside of the illegal gambling activity and being referred to as a “game of skill.” In 2019, an appeal was filed in the Supreme Court, but it was dismissed.
In the case of Gurdeep Singh Sachar Vs. Union of India and Ors. (2019), the Hon’ble Bombay High Court reached a similar conclusion, stating that success in Dream 11 fantasy sports is clearly dependent on the user’s capacity to exercise his skill based on superior knowledge, judgement, and attentiveness. As a result, the outcome is unaffected by whether a particular team wins or loses in a real-world game on any given day. It is, without a shadow of a doubt, a game of skill rather than chance. “The attempt to reopen the issues decided by the Punjab and Haryana High Court in respect of the same online gaming activities, which are backed by a judgement of the three judges bench of the Apex Court in K.R. Lakshmanan (supra), that too, after the Apex Court’s dismissal of SLP is wholly misconceived,” the Court said.
The Union of India has filed a Special Leave Petition challenging the Bombay High Court’s decision. The Hon’ble Supreme Court, however, dismissed the case. However, Hon’ble Justice Shri R. F. Nariman and Justice Shri S. R. Bhat granted the Union of India the right to bring a limited review petition in the Bombay High Court on the matter of GST avoidance in that instance.
Latest Case
The Rajasthan High Court dismissed a writ petition filed in the nature of a Public Interest Litigation in the case of Chandresh Sankhla vs State of Rajasthan (2020) in October 2020, opining that the issue of considering Dream 11, a fantasy sports game, as having any element of betting/gambling is no longer res integra in light of the judicial dictums and orders passed by the Bombay High Court, Punjab and Haryana High Court.
To resolve the ban of the online game Dream11, a Special Leave Petition was filed. The case was dismissed, and the Rajasthan High Court’s decision (described above) was affirmed. The Apex Court was asked to consider a New York Supreme Court decision (2020) that had to respond to a similar challenge, in which it was held that while participants in interactive fantasy sports contests may use their skill in selecting teams, they have no control over how the athletes on their Interactive Fantasy Sports teams perform.
As a result, we can claim that, based on the aforementioned instances, the Courts have carefully analysed the level of skill involved in a given game in order to determine whether it is gaming or “gambling” as defined by Indian gambling laws.
Way Forward
We’ve come a long way from antiquated laws to state-controlled legislation, but only in a few states. With the rapid advancement of technology and online games gradually taking over and increasingly being chosen over physical games, a set of regulations and reforms can be developed at the national level that will lead to a surge in an expanding market like India. From the perspective of a gambler, having a system of rules and regulations in place eliminates the risk of breaking any laws. To be honest, India isn’t exactly a gaming hotspot.
This process can be accelerated if service providers and owners of web sites sit down with the government and come to smart conclusions that benefit the country as a whole. Because it is difficult to foretell the future, only time will tell what the laws of gambling markets will bring.
Conclusion
The purpose of this essay was to determine what qualifies as a game of skill and what qualifies as a game of chance. We’ve determined which games require more skill than chance based on definitions, layperson interpretations, and numerous judicial dictums, as well as what needs to be proven to prove a game of skill versus chance.
We’ve also dispelled any concerns about which category fantasy sports belong to, thanks to a Supreme Court decision this week. The hazy image of these two terms has become apparent, and the subject is not difficult.
As the use of mobile phones, the internet, and the online gambling market grows, the government begins to realise the potential benefit in further regulating the business in order to keep the money earned within the country. Only time will tell which way the Indian rules on online gaming will go. In the existing situation, a larger number of controlled states is not impossible.
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