"Games were not just a diversion, I realized. Games could make you feel."

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The Indian Gaming Sector has witnessed colossal growth, owing to the covid 19 pandemic, with the market growth projected to reach a whopping $140 million from $62 million in 2019 and is expected to be $ 200million by the end of this year. Few among the major players that reaped tremendous profits were the e-sports, mobile gaming, and real money gaming sectors. The gaming business has successfully touched millions of netizens in India.

The number of players in our vicinity exceeds 650 million and is expected to remain consistently high. In terms of gaming engagement and awareness, India ranks fifth on the global level, indicating the immense indulgence of people in the industry.

What is this all about?

With the growth in this industry, the law has to catch up with it. One such issue in the legal space is the question whether a game involves skill or chance.

     Game of skill is a game that you can win by using your brain or body. You need to think, learn, practice, or use some strategy to improve your chances of winning. For example, chess is a game of skill because you have to plan your moves and outsmart your opponent.

     Game of chance is a game that you can win by being lucky. You do not have much control over the outcome, and it depends mostly on random factors. For example, lottery is a game of chance because you have to pick some numbers and hope that they match the ones that are drawn.

Some games can be both games of skill and games of chance, depending on how you play them, and this is the grey area where most of the legal issues and disputes can be seen in the present day with the advent of technology. For example, poker is a game that involves both skill and chance. You need to know the rules, the cards, and the odds, but you also need to bluff, read your opponents, and deal with the luck of the draw.

Different countries have different laws about games of skill and games of chance. Some games are legal, some are illegal, and some are in between. The laws can affect how people play these games and what they can win or lose. In India, game of chance and prohibited by virtue of the Public Gambling Act, 1867.[1]Games of skill can operate without any hassle in India under the Prize Competition Act, 1955.[2]The games that involve both skill and chance pose a major challenge to the government as well as for judiciary to regulate them.

One such case that came up before the Hon’ble Supreme Courtin the year 1957 was R. M. D. Chamarbaugwala vs. Union of India[3].In this case the Supreme Court held that “competitions in which skill is the main deciding factor of the competition's outcome are not prohibited under the Prize Competition Act.” This case is known as bible of gaming laws in India. In another case of Dr. K.R. Lakshman v. State of Tamil Nadu[4] ,the court held that “the test of predominance of skill is applied as set out in to validate the nature of the game, and where skill was the predominant factor, the activity would be protected by Article 19(1)(g) of the Constitution as a permitted business activity.”

After the country saw a boom in the online gaming industry, multiple States started imposing blanket ban on online games even if they had predominance on skill over chance, using their power to legislate upon the same. In the case of Junglee Games India Private Limited v. State of Tamil Nadu & Ors[5],the High Court of Madras ruled that “the blanket prohibition on online gaming, both skill and non-skill based, enacted by the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021 ("Amendment Act") is unconstitutional. The Madras High Court completely overturned the Amendment Act on the grounds that, while the state government could regulate the area, the restrictions imposed by the state government were disproportionate, lacked proper justification, and thus violated the freedom guaranteed to individuals under the Indian Constitution. The Hon’ble Supreme Court has overturned the judgement of the Madras High Court, but the case is lis pendens.

So, combining all the precedents and laws, I have prepared a table to properly distinguish between games of skill and chance.

Need for a Central Legislation

States have the authority to establish rules against 'betting and gaming' under the Indian Constitution. As a result, state laws differ. Most Indian states exempt "skill gaming" from the scope of their gambling restrictions. Some states, such as Goa, permitted licenced brick-and-mortar gambling operations, but others (such as Meghalaya, Nagaland, and Sikkim) established a licencing scheme to govern internet gaming activity. This in turn creates a tussle over both the jurisdictions, i.e., the centre and the states.

The conflict between the centre and state governments regarding gaming laws in India often arises due to the interpretation and implementation of these laws. The central government has taken the position that games of skill are not considered gambling and therefore fall outside the scope of the Public Gambling Act. Meanwhile, various state governments have different perspectives and may consider certain games involving skill, such as poker or rummy, as forms of gambling and subject them to their respective state laws.

The lack of a unified approach and the varying interpretations of gaming laws have led to inconsistencies and legal challenges in different states. Some states have implemented laws that either prohibit or heavily regulate online gaming, while others have taken a more permissive approach. As a result, several legal disputes and controversies have arisen, with conflicting judgments from different courts across the country.

It's worth noting that gaming and gambling laws can change over time as governments and courts reconsider their positions. The position in the USA is similar to that of India, where the states have different legislations and approach as compared to the Federal Governments.

Conclusion

It is important to distinguish game of skill and game of chance because they have different legal implications and social perceptions. In many countries, including India, gambling is prohibited or strictly regulated, and games of chance are considered as gambling. However, games of skill are generally exempted from the definition of gambling, as they involve the use of mental or physical abilities, rather than mere luck, to influence the outcome of the game. Games of skill are also seen as more respectable and rewarding than games of chance, as they require skill, strategy, and effort to master.

However, distinguishing game of skill and game of chance is not always easy, as many games have elements of both. For example, poker is a game that involves both skill and chance, as the players have to use their knowledge, experience, and strategy to play their cards, but they also depend on the random distribution of the cards. Therefore, different courts and jurisdictions may have different opinions on whether poker is a game of skill or a game of chance.

To avoid such ambiguity and confusion, some experts suggest that a mathematical or quantitative approach should be used to determine the nature of a game. This would involve measuring the degree of skill and chance involved in a game and comparing them to establish which one is dominant.

[1]The Public Gambling Act, 1867. [online].

[2]The Prize Competition Act, 1955. [online].

[3] R.M. D. Chamarbaugwala vs. Union of India. AIR 1957 SC 628.

[4] Dr.K.R. Lakshmanan vs State Of Tamil Nadu And Anr. 1996 AIR 1153.

[5]State Of Tamil Nadu vs Junglee Games India. 2021 SCC OnLine Mad 2762.