All transactions should be linked to the Adhaar/ PAN Card of the operator and participants, and any income derived from betting or gambling should be taxable under relevant laws
IN THE realm of gaming, there are two primary categories of games: games of skill and games of chance. Distinguishing between these two types of games is crucial, as it holds significant legal implications.
Skill games are those that necessitate the utilization of a player’s mental or physical abilities to emerge victorious. These games rely on strategy, knowledge, and expertise. Unlike games of chance, skill games determine outcomes based on players’ actions and decisions rather than sheer luck. Chess, poker, rummy, bridge are common examples of skill games. Conversely, games of chance solely depend on luck. These games typically involve gambling or betting, and outcomes are determined purely by chance. Roulette, slot machines, and lottery games are popular examples of games of chance.
Legal Implications
In India, there exists a clear differentiation between skill games and games of chance. In the case of State of Andhra Pradesh vs. K. Satyanarayana, the Supreme Court established that rummy is a game of skill. However, if gambling is involved, or if the gambling house derives profit from the game, it can be considered an offense under the laws of AP. Additionally, the court ruled that three-card games such as flush or brag are games of pure chance.
In another case, Dominance games pvt. Ltd. v. state of Gujarat, the court determined that poker qualifies as gambling under the Gujarat Prevention of Gambling Act, 1887, as it is primarily a game of chance. The legal implications of skill games and games of chance are significant. If a game is deemed a game of chance or is played with stakes involved, it may be considered gambling and thus illegal under gambling laws. Whether in online or offline gaming, it is crucial to establish that the game is a skill-based one and played without stakes to fall within the exceptions of the law.
It is essential to note that if online gaming is prohibited in a particular state, promoting such gaming within that state would violate the Advertising Standards Council of India (ASCI) Code as well as the Cable TV Network Regulation Act 1994.
Understanding the distinction between skill games and games of chance is of utmost importance, particularly when it comes to legal implications. Skill games rely on mental or physical abilities, employing strategy, knowledge, and expertise, while games of chance rely solely on luck and often involve gambling. Comprehending the difference between these two types of games can help individuals abide by the law while enjoying their preferred games.