Maharashtra Betting Laws and Industry

Online Casino Laws in Maharastra India

The State of Maharashtra and especially its capital city, Mumbai, has a thriving gambling industry although many forms of betting are illegal except for horse racing and lottery.

In fact, Mumbai is considered the hub of gambling activities and accounts for a major share of the $60 billion industry where most of it comes from illegal betting.

The turnover was enough for international betting major Ladbrokes to attempt to operate legalized horse betting in the state in March 2008. However, due to the current gambling laws their effort proved futile. While betting on horses is legal, wagering on other sports is banned.

However, illegal betting is rampant with millions of dollars changing hands on cricket, which is controlled by illegal syndicates.

Primary Gaming Laws

For the most part, Maharashtra is the only state that is specific when it comes to operating a gambling website and operating a gambling house. The law is not so clear in other states.

The state’s gambling laws are governed by the Maharashtra Prevention of Gambling Act 1887 [1], which is considered outdated by many, just like the Public Gambling Act of 1867 [2].

As compared with many other states, Maharashtra is more moderately friendly to betting. The Bombay Prevention of Gambling Act [3] aka the Maharashtra Prevention of Gambling Act deems it an offence to run a gaming house.

When it comes to betting most laws focus on running gaming houses. The punishments are minor with a 1 month prison term and a meager fine of around $4. The second offence invites a three-month prison term although the fine remains the same while a third time offender is liable to face a jail term of 6 months.

As per the laws of the state, public gambling and operating a common gaming house is an offence. Anyone can also be charged even if found present in the gaming house. Online gambling laws are also complex in nature with the state deeming online gambling an offense under the Bombay Wager Act [4].

Horse Race Betting in Maharashtra

Betting on horses has always been an exception in a state that has otherwise frowned upon other forms of betting. There is no doubt that horse racing wouldn’t have the same appeal if betting wasn’t involved.

Placing wagers with a licensed bookmaker at a racecourse is permitted. Maharashtra is among 8 states to have created exceptions in their statutes to allow horse race betting with specific rules and conditions found in a separate statute, the Bombay Race Courses Licensing Act, 1912.

Mumbai and Pune is where all the horse racing action takes place under the aegis of the Royal Western Turf Club of India (RWITC), the premier racing club of India. Both racing tracks host a number of prestigious thoroughbred horse racing events that include the Derby, 2000 Guineas, St. Leger, and Poonawalla Multi-million, and many more. Mumbai’s Mahalaxmi Racecourse has a packed calendar from November to April.

Legality if horse race betting in Maharastra India

The Pune Racecourse also hosts a number of prestigious events such as the Southern Command Cup, RWITC Gold Cup, Pune Derby, and many more. Races are scheduled at the Pune track from August to October.

It is also the venue of the annual sales of 2-year olds. Betting is permitted at Tote windows while there are Tote Service Outlets in the cities. Punters can bet on variable or fixed tote odds and includes plenty of horse racing betting options such as Win, Place, Forecast, Treble, Exacta, Trinella, jackpot, and more.

There are many licensed bookmakers at the racecourses in Mumbai and Pune that offer different types of betting options.

This includes Win, and Each Way win and place bet. The RWITC has set up hundreds of tote booths and several off course betting centers where punters can place wagers on the tote pools which are linked to the overall pool.

For the most part, thoroughbred horseracing was legalized following a Supreme Court ruling in 1996 in the case of Dr. KR Lakshmanan v. State of Tamil Nadu (AIR 1996 SC 1153) [5] which stated that horse betting was both a game of chance and a game of skill based on which it is not illegal gambling according to the Police Act of 1988 or Gaming Act of 1930 [6]. As a result of the Supreme Court’s ruling, betting on horses became legal. In its ruling the court observed

We have no hesitation in reaching the conclusion that the horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better trained jockey can touch the winning-post.

As far as horse racing in Maharashtra goes, there are days when the two courses in Mumbai and Pune can give Ascot, Epsom, and Sandown a run for their money. The Government of Maharashtra also earns millions of dollars in taxes under The Maharashtra Betting Tax Rules of 1961 [7] and the Maharashtra Betting Tax Act of 1925 [8]. The State Government and the Bombay Municipal Corporation continue to net a hefty 48 percent in taxes and license fees on horse betting.

Speaking of taxes, horse racing is so popular an activity that even the Income Tax Act of 1961 has provisions for winnings from horse races. Section 115BB of the Act mandates a 30 percent tax on all forms of betting including horse-race winnings. In addition, according to Section 194BB [10] of the Act states that winnings above Rs. 5,000 (approx. $82) accrued from wagering with a licensed bookmaker will attract a tax deduction of 30.90% at source and paid to the government before any winnings are released.

Betting Cricket and Other Sports

Betting laws and legality in Maharastra, India online

The main cricket stadiums in Maharashtra are the Wankhede Stadium and DY Patil Stadium in Mumbai, and the Maharashtra Cricket Association Stadium in Pune, and the VCA Stadium in Nagpur. Domestic and international games are played on these grounds which are always packed in capacity.

While residents of Maharashtra are cricket crazy to say the least but punters don’t have the opportunity to place legal wagers on cricket matches. Any form of betting on cricket is against the law according to the Public Gaming Act [2] which makes it illegal to operate or visit a gambling venue.

However, the law remains ambiguous since there is no clear definition of gambling within the Act, which makes it hard to determine if cricket betting as illegal as betting on the roll of a dice. Many argue that cricket is a game of skill and is therefore not covered by the Act. This could be backed up with the clause within the Act which states

12. Act not to apply to certain games. Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played.

As per media reports, back in 2003, there was some ray of hope that cricket betting would be legalized to boost the state’s exchequer and weaken the underworld where cricket betting worth billions of dollars takes place.

Amendments of sections 4 and 5 of the Bombay Prevention of Gambling Act, 1887 were recommended by the police. However, plans never really took off while illegal betting houses continue to proliferate and enter every arena of the sport. The Indian Premier League (IPL) match fixing scandal is one of the ugliest in the country’s history and proves to what extent sports betting is popular not only in Maharashtra but the nation as a whole.

The authorities continue to crackdown on illegal bookmakers periodically but it’s always the small fry who are targeted while the big wigs get away scot free. For the most part, betting on cricket is an issue that has not yet been adjudicated by the Supreme Court. Most legal experts believe the law is not in line with current social patterns.

According to a latest media report, a Supreme Court appointed Special Investigation Team (SIT) has revealed that cricket betting is a key source of black money.

Even though online bookmakers based in India are not allowed to accept wagers on cricket and other sports, there are several offshore betting agencies that accept Indian clients who are not restricted from placing wagers online. The Maharashtra government does not block access to some of these sites.

The International Cricket Council (ICC) CEO, Haroon Lorgat, has also urged Indian officials to make cricket betting online legal and claims that it could help prevent corruption, and monitor illegal bookies and match fixing.

Apart from cricket, betting on other sports is also illegal. The Supreme Court went ahead and banned bullock-cart races in totality. The court upheld a July 11, 2011 notification by the Ministry of Environment and Forest, banning the training or exhibition of bulls as performing animals.

Casinos in Tamil Nadu

Sikkim and Goa are the only two states to legalize and permit casinos to operate. However, it is interesting to note that the state legislative assembly had passed a piece of legislation in 1976 during the national emergency, The Maharashtra Casinos (Control and Tax) Act, 1976 [12].

The legislation was passed by the government under the leadership of Chief Minister Shankarrao Chavan. According to the Act, the state government could grant licenses to casinos in specific areas for a fee.

Casino games fall under the purview of games of chance including betting activities. The state government was authorized via the Act to collect up to 25 percent of the total amount wagered in taxes from the owners.

What is notable is that The Maharashtra Casinos (Control and Tax) Act, 1976 was to supersede provisions of the Bombay Prevention of Gambling Act, 1887 [1], which imposed a ban on all forms of gambling and betting except for horse races and lotteries.

However, no casino managed to set shop in Maharashtra for reasons still unknown. For the most part, the Act remains buried since no notification has been issued by the government in the Official Gazette appoint as mentioned in Section 1(3) of the Act.

A proposal for the launch of a casino in the Raigad District of Maharashtra was presented to the government by the Lotelier Group but nothing did materialize.

The Maharashtra Tourism Development Corporation (MTDC) had also brought forward a proposal to permit casinos in Matheran, a popular hill station in the Western Ghats, in 2012. However, the MTDC did not pursue the matter, citing environmental issues that could be brought up by the Union Ministry of Environment & Forests.

Most recently, Jay Sayta, a student at the National University of Juridical Sciences filed a PIL or Public Interest Litigation, informing the court that although the Maharashtra Legislative Assembly had passed     The Maharashtra Casinos (Control and Tax) Act, 1976 [12], it was never notified.

In response, the Bombay High Court directed the state government under Chief Minister Devendra Fadnavis to respond to the PIL. Sayta, a 22 year old law student is the first one to challenge the government and has provided details on the need for the Act to be implemented, the possible revenue that can be collected, and apprehension on whether it could increase crime. The objective is to make the state government take measures to issue licenses through a transparent process to gaming companies of repute. In the PIL, Sayta urged the court to ask the state government to consider bringing the Act into effect through notification.

Lottery in Maharashtra

As mentioned earlier, horse racing and lotteries are the only two forms of gambling permitted in the state of Maharashtra. Lottery is governed by The Lotteries (Regulation) Act of 1998 [13]  which states that only the state government has the right to print and sell lottery tickets either itself or through authorized selling agents.

According to the Act, the state will conduct draws only once a week. Any violation of the Act can lead to punishment that includes a prison term of up to 2 years and fines. The offense is considered non-bailable and cognizable.

The Supreme Court In the case of H. Anraj  vs. State of Maharashtra [14] ruled that when Parliament had not made any law on lotteries with reference to states, the concerned state does not need to obtain permission of the Union Government to organize State lotteries.

However, the power does not extend to banning the sale of lottery tickets organized by other states. Also, in the case of J.K. Bharati vs. State of Maharashtra, the Supreme Court ruled that there was no doubt about the competence of the State Legislature to legislate the sale of tickets and prohibition of all lotteries organized by any agency other than the Union Government or the State Government.

In 2011, the Government of Maharashtra issued a list of legal lotteries following the proliferation of illegal lotteries in the state. The state finance ministry also warned that promoters and distributors of illegal lotteries would be severely punished under Sections 14 (1), 17 and 18 of Maharashtra Tax on Lotteries Act, 2006 while a case would be registered under Lotteries Regulations Act, 1998.

Under the Act, it is mandatory for promoters of any lottery to register with the deputy commissioner of lottery tax and pay a weekly advance of an amount assessed by the deputy commissioner. The promoter is also required to submit records to the lottery department on a regular basis.  

Flush, Rummy, Poker and other Card Games

Online Poker laws in Maharastra India

Rummy, poker and bridge, are among the popular card games played in Maharashtra.

However, the law leaves much to be desired when it comes to issues of legality.

For the most part, poker and rummy are considered games of skill but the Maharashtra Government is still not clear on the legal status of these card games.

In 2012, according to media reports, 17 senior citizens who
were arrested by police from Andheri Gymkhana in Mumbai in August 2011 under the Bombay Prevention of Gambling Act, 1887 [1] for playing Rummy and Bridge got relief from the Bombay High Court. Each of the petitioners was awarded around $17 each while two women were to receive $435 each.  

The group was arrested and charged under the gambling laws despite both rummy and bridge being considered games of skill. The two judges observed that the police crossed the line and did not verify facts before raiding the venue. The petitioners stated in their plea that they were playing rummy and bridge, which were neither wagering nor gambling under the Gambling Act. They claimed to have been illegally arrested until the next day, which tarnished their image.

Rummy, also known as Paplu in Maharashtra, is one of the most popular games played at clubs, kitty parties, and even during train or bus journeys by commuters, to and from work. The game is usually played for small stakes since the laws are still ambiguous even though the Supreme Court ruled that games of skill like rummy are legal to play under current laws.

This was evident in MJ Shivani v. State of Karnataka [15] (1995) and State of Andhra Pradesh v. K. Satyanarayana where the judge observed that a considerable amount of skill is required in the game of rummy. Only rummy with stakes is not permissible in clubs.

While online gambling is illegal in the State of Maharashtra, there are Rummy and online Poker sites that permit players from India since the Supreme Court ruling in the above mentioned cases state that rummy is mainly a game of skill. The court ruled that competitions in which a substantial amount of skill required to win cannot be considered ‘gambling’, which makes play rummy and poker online legal in the state.

The PIL filed by Jay Sayta, mentioned earlier, with reference to The Maharashtra Casinos (Control and Tax) Act, 1976 [12] could have a positive impact on the state’s gaming laws in the near future. So far, the courts in India have not yet clarified their stand on poker as a game of skill and whether such card games can be played on a commercial basis. Meanwhile, playing online poker is not likely to have any resident of Maharashtra face punishment especially in the absence of a specific law.

Gambling Laws Reference in this Article

[1], The Maharashtra Prevention of Gambling Act, 1959

[2],  The Public Gambling Act, 1867

[3],  Bombay Prevention of Gambling Act, 1887 Complete Act – Bare Act, 1887

[4],  Bombay Act No. III Of 1912, 1912

[5],  Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr on 12 January, 1996

[6],  The Police Act, 1888, 1962

[7],  The Maharashtra Betting Tax Rules, 1961, 1961

[8], The Maharashtra Betting Tax Act, 1925

[9], Income Tax Act, 1961

[10], Winning From Horse Race Tax Section 194BB, 1961

[11],  Animal Welfare Board of India VS  A. Nagaraja & Ors, 2014

[12], The Maharashtra Casinos Control and Tax Act, 1976

[13],  The Lotteries (Regulation) Act, 1998

[14],  H. Anraj And Others Etc vs State Of Maharashtra on 23 January, 1984

[15],  M.J. Sivani And Ors vs State Of Karnataka And Ors on 17 April, 1995