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Updated: June 4, 2011 20:19 IST

Governing online gambling

D. Murali
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There is no specific law governing online gambling in India, writes Justice Mukul Mudgal in ‘Law & Sports in India’ (www.lexisnexis.com). He speaks of two types of online gambling, viz. casino style gaming and lotteries, which are typically based on chance; and the second, betting, particularly in sports, where events take place in real time and can be verified independently. Adding that the only states that allow casino gambling are Sikkim and Goa, the author notes that the former legally permits online gambling.

Taking into account that betting in sports is prohibited in India, it remains to be ascertained whether the government will take steps to regulate sports betting on websites registered outside India, where gambling and betting are legal, observes Justice Mudgal. For, such websites would fall outside the territorial jurisdiction of the Indian law. The scenario of the Net activity described in the book is of a person placing a bet on websites, the servers of which are hosted in countries where betting is recognised by law, with payments happening through bank account, wire transfer, credit or debit card, or through PayPal.

One learns from the book that, to curb online gambling, the Indian authorities rely on the Information Technology Act and the Foreign Exchange Management Act. Section 67 in the former specifies penalty for publishing or transmitting in the electronic form, any material which is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons. The author, however, adds that this section would not govern sports betting since horse racing has expressly been recognised in many states as a game of skill.

As for overseas online betting, he makes a reference to Rule 3 of the Foreign Exchange Management (current account transactions) Rules, 2000, which prohibits transactions such as remittances out of lottery winnings, and for sweepstakes. Even betting on cricket and hockey would fall under the Rule’s purview and person would not, therefore, be able to pay on these websites without contravening the provisions, cautions Justice Mudgal.

Recommended read for the legal professionals.

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