Illegal Gambling, Betting, And Lottery Prosecutions

13 Oct 2025 --
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I. Legal Framework

Illegal gambling, betting, and lottery prosecutions in India are primarily governed by:

The Public Gambling Act, 1867 (Central Act – applies to some states)

State Amendments and Local Gambling Acts (since “betting and gambling” is a State subject under Entry 34, List II of the Seventh Schedule to the Constitution)

The Lotteries (Regulation) Act, 1998

The Information Technology Act, 2000 (for online betting and gambling)

Indian Penal Code, 1860 (for cheating, criminal conspiracy, or fraud related to gambling)

II. Key Concepts

1. Gambling / Gaming

Gambling generally means wagering money or valuables on an uncertain event with the intent to win money. The Public Gambling Act prohibits keeping or operating a “common gaming house.”

2. Betting

Betting is a specific form of gambling, often involving sports or events (e.g., horse racing, cricket matches).

3. Lottery

A lottery involves distribution of prizes by chance among persons who have paid for the chance. Regulated under The Lotteries (Regulation) Act, 1998.

4. Skill vs. Chance

A critical legal distinction in gambling law is between:

Games of Skill → Not prohibited (e.g., chess, rummy)

Games of Chance → Prohibited (e.g., dice, cards purely of luck)

III. Important Case Laws

Below are five landmark judgments that shaped gambling, betting, and lottery law in India:

1. State of Bombay v. R.M.D. Chamarbaugwala (AIR 1957 SC 699)

Facts:
The State of Bombay imposed a tax on competitions that involved solving puzzles or crosswords for a prize. The respondent argued it was a game of skill, not gambling.

Issue:
Whether such competitions are protected under freedom of trade and profession (Article 19(1)(g)) or amount to gambling.

Held:

The Supreme Court held that gambling is inherently harmful and not protected under Article 19(1)(g).

Competitions where success depends substantially on skill are legitimate businesses.

But competitions based on chance fall under “gambling.”

Principle:
This case laid down the “skill versus chance test”, which continues to determine legality of gaming activities.

2. State of Andhra Pradesh v. K. Satyanarayana (AIR 1968 SC 825)

Facts:
Police raided a house where people were playing rummy for stakes. They were prosecuted under the Andhra Pradesh Gaming Act.

Issue:
Whether playing rummy for money constitutes gambling.

Held:

The Supreme Court held that rummy is a game of skill, not pure chance.

Playing rummy in a private place is not illegal.

However, if the owner of a place profits or derives commission from the game, it may become a “common gaming house.”

Principle:
A game predominantly of skill does not amount to gambling even if played for small stakes.

3. Dr. K.R. Lakshmanan v. State of Tamil Nadu (AIR 1996 SC 1153)

Facts:
The Tamil Nadu government banned horse racing under the Tamil Nadu Horse Races (Abolition) Act, 1974. The petitioner (a horse owner) challenged it, claiming horse racing is a game of skill.

Issue:
Whether horse racing is gambling or a game of skill.

Held:

The Supreme Court ruled that horse racing is a game of skill, not gambling, because success depends on knowledge, skill, and training of horses and jockeys.

Therefore, betting on horse races conducted on licensed racecourses is legal.

Principle:
The Court reiterated that games where skill predominates over chance are exempt from gambling prohibitions.

4. B.R. Enterprises v. State of U.P. (1999) 9 SCC 700

Facts:
Several states banned lotteries, while others allowed them. The petitioners argued that such selective bans violated Article 14 (equality before law).

Issue:
Whether states could ban lotteries selectively.

Held:

The Supreme Court upheld the validity of the Lotteries (Regulation) Act, 1998.

It held that state governments have discretion to organize, regulate, or prohibit lotteries.

There is no fundamental right to conduct lotteries since lotteries are a form of gambling.

Principle:
Lotteries are res extra commercium (outside commerce), meaning they are not a trade protected under Article 19(1)(g).

5. Varun Gumber v. Union Territory of Chandigarh (2017 SCC OnLine P&H 5372)

Facts:
The petitioner claimed that fantasy sports (like Dream11) amounted to online gambling and should be banned.

Issue:
Whether online fantasy sports constitute gambling.

Held:

The Punjab and Haryana High Court held that Dream11 is a game of skill, since success depends on user’s knowledge of sports, statistics, and strategy.

It is not gambling or betting under the Public Gambling Act, 1867.

Principle:
This judgment extended the “skill test” principle to online gaming, protecting legitimate fantasy sports platforms.

IV. Prosecution and Punishment

Under the Public Gambling Act, 1867 (sections may vary by state):

Running a gaming house → Imprisonment up to 3 months or fine up to ₹200 (varies by state amendments).

Being found in a gaming house → Imprisonment up to 1 month or fine up to ₹100.

Online gambling → Punishable under state laws and IT Act, 2000 for illegal online activities.

Under the Lotteries (Regulation) Act, 1998:

Organizing or promoting illegal lotteries → Punishable with imprisonment up to 2 years or fine up to ₹10,000.

V. Summary Table

Aspect	Legal Principle	Key Case
Gambling vs Skill	Only games of skill are legal	Chamarbaugwala Case (1957)
Rummy legality	Rummy = Skill-based, not gambling	Satyanarayana Case (1968)
Horse racing legality	Skill-based, legal	Lakshmanan Case (1996)
Lotteries regulation	States can prohibit	B.R. Enterprises (1999)
Online fantasy sports	Skill-based, not gambling	Varun Gumber (2017)

VI. Conclusion

Indian courts have consistently distinguished games of skill from games of chance, shaping the jurisprudence on gambling and betting.
While traditional and online gambling remain largely prohibited, skill-based games and licensed lotteries may be legally permissible under strict regulation.