LEGALITY

 

LEGALITY

Black Sheep Gaming Private Limited owns and operates the platform ‘Skillpatti.com’ through which it offers registered users an opportunity to participate in tournaments of 2-7 triple draw poker & other poker games for real money and prizes.

The owner and operator have gone to every extent to ensure that the platform remains legal and the 2-7 triple draw poker & other poker games offered on the platform strictly comply with the Central and State legislations of Republic of India to protect the users/participants from any legal risk. The 2-7 triple draw poker & other poker games/tournaments offered on the platform, which is our intellectual property, are structured in such a way so as to comply with legislations and be in conformity with the judicial pronouncements prevailing in India. The 2-7 triple draw poker & other poker games we offer on the platform are ‘games of skill’ and hence, legal.

IS IT LEGAL TO PLAY POKER IN INDIA?

Poker is a game which pre-dominantly depends on skill over chance and is classified as a ‘game of skill’ and is therefore, legal in India. Legality of any game is judged on it being a ‘game of skill’ as opposed to it being a ‘game of chance’.

Game of Chance - These games depend on factors like luck and unpredictability of the final outcome of the game. Games of chance are considered ‘gambling’ and are prohibited in India.

Game of Skill - Skill plays the dominant role and the result depends primarily upon the relative knowledge, training, attention, experience, and/or adroitness of the players. Such games are not deemed to constitute ‘gambling’ and hence are not prohibited under gambling laws. For a game to be considered a ‘game of skill’ under Indian law, the element of skill shall pre-dominate the element of chance in affecting the results of the game. Thus, the extent to which skill is involved in the game is the key factor in the determination of the nature and legality of the game under Indian law.

The Hon’ble Supreme Court of India in the case of State of Andhra Pradesh v. K Satyanarayana, AIR 1968 SC 825 noted that game of skill would be where "success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player". Such games are not deemed to constitute 'gambling' and hence are not prohibited under gambling laws. Element of skill must pre-dominate the element of chance in affecting the results of the game.

The Public Gambling Act, 1867 (PGA) criminalises the act of 'public gambling', however, it creates an exception in favour of ‘games of skill’. Apart from the PGA, several States across India have enacted and implemented State specific laws/regulations governing ‘gambling’ and ‘gaming’ whereby ‘games of skill’ have been exempted from the purview of ‘gambling’. Where a State law on the subject exists, it takes precedence over the PGA as ‘gaming’ and ‘gambling’ is State subject under the Constitution of India.

Under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2016, ‘Games of Skill’ has been defined under Section 2 (3) as follows:

“Games of skill- shall include all such games where there is preponderance of skill over chance, including where the skill relates to strategising the manner of placing wagers or placing bets or where the skill lies in team selection or selection of virtual stocks based on analyses or where the skill relates to the manner in which the moves are made, whether through deployment of physical or mental skill and acumen.

EXPLANATION: FOR THE PURPOSES OF THIS ACT:-

All Games provided in Schedule A of this Act shall fall under the category of “Games of Skill”.

‘Games’ which have been declared or determined to be ‘games of skill’ by Indian or international courts or other statutes, or games where there are domestic and international competitions and tournaments, or games which can be determined to be ‘games of skill’ shall further be entitled to be included in Schedule A.”

Games of skill may be (a) Card based and (b) action / virtual sports / adventure / mystery and (c) calculation / strategy / quiz based.”

Further, the definition of gaming under Section 2(1)(b) of the West Bengal Gambling and Prize Competitions Act, 1957 specifically excludes lottery or games of cards like Bridge, Poker, Rummy or Nap from the ambit of ‘gambling’ & ‘betting’ and therefore classified as ‘games of skill’.

The Assam (Assam Game and Betting Act, 1970) and Odisha (Orissa) (Orissa Prevention of Gambling Act, 1955) legislations pertaining to ‘gambling’ do not have any exception for ‘games of skill’.

The Telangana Gaming Act, 1974 amended vide the Telangana Gaming (Amendment) Act, 2017 dated 07.11.2017 prohibits the residents of Telangana to organise, provide, participate and play ‘games of skill’ (including online ‘games of skill’) for stakes in and from the State.

JUDICIAL PRONOUNCEMENTS

The Hon’ble Supreme Court of India in Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226 laid down a basic principle for classification of games; a game of chance is one in which the element of chance predominates over the element of skill and a game of skill is one in which the element of skill predominates over the element of chance. It is therefore the dominant element out of ‘skill’ or ‘chance’ which determines the character of the game.

The Hon’ble Supreme Court of India in State of Andhra Pradesh v. K. Satyanarayana, (1968) 2 SCR 387 accepts that there is a 'chance' element in all card games yet that alone cannot be indicative of the fact that ‘skill’ is not involved.

Further, the Hon’ble Supreme Court of India in R.M.D Chamarbaugwala v. Union of India, (1957) 1 SCR 930 has held that competitions where the success depends upon a substantial degree of skill are not ‘gambling’. The question as to whether ‘games of skill’ can be offered as legitimate business activities was dealt with by the Hon’ble Supreme Court of India in R.M.D Chamarbaugwala judgment where it has observed that ‘games of skill’ are business activities and shall be afforded the protection under Article 19(1)(g). Therefore, since poker games offered by Skillpatti.com are likely to be classified as ‘games of skill’, they shall in all likelihood be allowed to be operated as legitimate business activities.

Further, the High Court of Karnataka in R. Shankar Creation Association v. State of Karnataka, W.P. No. 16622/2012 vide decision dated 04.06.2012 has held that poker is a ‘game of skill’ similar to games like Chess, Rummy, Dart, Carom etc.

Furthermore, the Andhra Pradesh High Court in D. Krishna Kumar v. State of A.P, 2002 (5) ALT 806; 2003 CriLJ 143 has held that a ‘game of skill’, even when played for stakes is outside the ambit of the Gambling Act whereas the Madras High Court in Director General of Police, State of Tamil Nadu v. Mahalakshmi Cultural Association, W.A. No. 2287 of 2011 (decided on 22 March 2012) has held that a ‘game of skill’, when played for stakes, will not be afforded the protection offered to ‘games of skill’ under the Chennai City Police Act, 1888.

The Calcutta High Court in Kizhakke Naduvath Suresh v. State of West Bengal & Others, W.P. No. 13278 (W) of 2015 vide its Order dated 02.07.2015 directed the State Government, police, municipal and other authorities not to interfere in the poker games conducted by the petitioner and his club.

Recently, the Calcutta High Court (Circuit Bench at Jalpaiguri) in the case of Indian Poker Association & Anr. Vs. State of West Bengal & Ors., W.P.A. No. 394 of 2019 vide its Order dated 29.08.2019 observed that “since the game of poker ipso facto is not included within the purview of the West Bengal Gambling and Prize Competitions Act, 1957, without there being a specific complaint with regard to the petitioners resorting to gambling or other illegal activity in the name of poker, there cannot be any occasion for the police to interfere with such game.”

However, the Gujarat High Court in the case of Dominance Games Pvt. Ltd. vs. State of Gujarat and Ors, Special Civil Application No. 6903 of 2017 under paragraphs 58 and 75 of the judgment has classified Poker to be a ‘game of chance’ and therefore ‘gambling’ under the Gujarat Prevention of Gambling Act, 1887.

Recently, the Division Benches of High Courts in the States of Kerala (Kerala HC) and Tamil Nadu (Madras HC), vide their decisions in the Ramachandran. K vs. Circle Inspector of Police Mallapuram District (WP(C). No. 35535 of 2018 decided on 24.01.2019) and The Director General of Police & Ors. vs. S. Dillibabu (2018 CriLJ 1842) have held that playing rummy (which has been held to be a ‘game of skill’ by the Supreme Court of India) ‘for stakes’ amounts to ‘gambling’ and is illegal.

While these judgments are applicable specifically to rummy, the basic principle of these decisions, wherein a ‘game of skill’ activity ‘for stakes’ has been held to be ‘gambling’, may be applied to other ‘game of skill’ activities for stakes including other skill-based offerings such as Fantasy Sports and/or Poker. Therefore, there exists some degree of risk in offering skill-based gaming for stakes in the States of Kerala and Tamil Nadu.

Pertinently, the game of poker should be classified as a ‘game of skill’ by courts in India because:

i) Beginners’ strategy in poker is very basic and is generally based on the cards he holds in total disregard to the position/role he occupies in the game, therefore it would be generally assumed that he would bet on a stronger hand, call on an intermediate hand and fold on a weaker hand.

ii) An optimum player bases his strategy on the role he occupies on the table, the card he holds, the community cards, the number of players in the game, their betting strategy and position at the table amongst many other variables which require sound knowledge and skill.

iii) Statistical analysis of different variants of poker have shown that more the complexities involved in the game or the higher the number of rounds, the element of skill becomes even more important.

iv) It is more likely that a skilled player would be able to triumph this element of chance to win the game.

In order to achieve success in 2-7 triple draw poker and other poker games on Skillpatti.com, a player must have the aforementioned skills such as knowledge, attention, experience and adroitness. The ‘skill’ element of the Poker is found primarily in two aspects: assessing the challenges provided in the game and playing accordingly. Users are subject to several carefully structured constraints and limitations in the game rules which minimize the instance of chance dictating the outcome and are required to engage in a qualitative assessment of the challenges and their execution in light of the scoring criteria used by Skillpatti.com for 2-7 triple draw poker and other poker games.

While the State of Nagaland (Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2016), as has been stated above, exempts ‘games of skill’ from the purview of ‘gambling’, persons intending to run the business of providing skill based gaming platforms require a license from the respective State Government of Nagaland before offering online games. Similarly, the Sikkim Online Gaming (Regulation) Act, 2008 restricts the offering of “online games and sports games” under the licenses issued under the said Act to physical premises of gaming parlours within the geographical boundaries of the State of Sikkim through intranet gaming terminals.

Pertinently, while the PGA and most State statutes exempt games of 'mere skill’ from their purview, certain Indian states classify all games of mixed skill and chance as gambling regardless of whether skill is the predominant factor. In the States of Assam and Odisha, games of mixed chance and skill cannot be played for any monetary consideration. Moreover, ‘games of skill’ for stakes are not excluded from the ambit of gambling in the State of Telangana. Therefore, 2-7 triple draw poker and other poker games on Skillpatti.com platform shall not be offered to the residents physically located in the States of Assam, Odisha, Telangana and Gujarat.

Skill-based games for stakes may be offered in the States of Kerala and Tamil Nadu however, there exists some degree of risk that the basic principle of the High Court decisions, wherein a ‘game of skill’ activity (rummy) ‘for stakes’ has been held to be ‘gambling’, may also be applied to such skill-based offerings.

Accordingly, the 2-7 triple draw poker and other poker games played on Skillpatti.com would not amount to ‘gambling’ under Central and most State gambling statutes except in the States of Assam, Telangana, Gujarat, Kerala, Tamil Nadu and Odisha. Furthermore, in the States of Sikkim and Nagaland, a license is required to offer such skill-based games.

 

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