Maharashtra Lottery and Betting Laws

The State of Maharashtra is incredibly important to the Indian gambling industry. It is the richest state in India by GDP, and also the second-most populous. Its capital Mumbai is the economic capital of the country.  Although many forms of betting are illegal, Maharashtra and Mumbai, in particular, has a thriving gambling industry.

How to Bet

In fact, Mumbai is considered the hub of gambling activities in India. It accounts for a major share of the $150 billion industry, with most of the proceeds coming from illegal betting on sports. Millions of dollars routinely change hands here, especially in cricket betting, which is controlled by illegal syndicates.

The turnover in gambling was lucrative enough to attract international betting major Ladbrokes to Mumbai. But their attempt to operate legalized horse betting in the state in March 2008 proved futile, due to the existing gambling laws. While betting on horses is legal, wagering on other sports is banned.

Primary Gaming Laws

Maharashtra is one of the few Indian states that have specific laws that target both offline gambling houses and online casinos, websites, and sportsbooks. The law is not so clear in other states.

The state’s gambling activities are governed by the Maharashtra Prevention of Gambling Act 1887. But like its central counterpart – the Public Gambling Act of 1867 – this law too is considered outdated by many, and unfit for use in the 21st century.

But despite multiple anti-gambling laws, Maharashtra is still considered moderately friendly to betting, compared to some other Indian states. The state laws deem it an offence to run a gaming house, which is a common stance across much of India:

When it comes to betting most laws focus on running gaming houses. The punishments are minor with a 1-month prison term and a meagre 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 offence under the Bombay Wager Act.

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 Indian states to have created exceptions in their statutes to allow horse race betting with specific rules and conditions. These can be found in a separate statute, the Bombay Race Courses Licensing Act, 1912.

Mumbai and Pune are where all the horse racing action takes place in the state, under the aegis of the Royal Western Turf Club of India (RWITC). It is the premier racing club of India with a long and storied history.

Of the two tracks, Mumbai’s Mahalaxmi Racecourse is the more prominent and prestigious venue. It hosts a number of prestigious thoroughbred horse racing events that include the Derby, 2000 Guineas, St. Leger, and Poonawalla Multi-million, and many more. The Racecourse has a packed calendar from November to April.

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 colts and fillies by the prominent stud farms and breeders.

In Maharashtra, betting on horses is primarily permitted at Tote windows in the Racecourse complex. There are also other Tote Service Outlets in the cities. Punters can bet on variable or fixed tote odds and include 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 centres where punters can place wagers on the tote pools which are linked to the overall pool.

For the most part, the legality of thoroughbred horseracing was fully settled in a Supreme Court ruling in 1996 in the case of Dr KR Lakshmanan v. State of Tamil Nadu (AIR 1996 SC 1153). It 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. In its ruling the court observed

We have no hesitation in reaching the conclusion that 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.

High Taxes A Pain For RWITC

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 and the Maharashtra Betting Tax Act of 1925. The State Government and the Bombay Municipal Corporation continue to net a hefty 48% in taxes and license fees on horse betting.

This level of taxation is so high compared to other states, that the billionaire racing enthusiast and former Chairman of the RWITC, Zavary Poonawalla, offered the government Rs 50 crore of his personal wealth in exchange of a rebate on taxes for 5 years. This unprecedented offer was made to save the future of the RWITC from financial ruin.

As of 2020, the RWITC is still in the red, due to high taxes, reduced betting activity, and decreased viewership. The impact of GST on racing and betting business has been quite painful as well. Further compounding the crisis is the reduced number of bookies, many of whom closed shop after getting raided in 2018 for tax evasion.

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% tax on all forms of betting including horse-race winnings. In addition, according to Section 194BB 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

Maharashtra is considered one of the main nurseries of cricketing talent in India. It is the home of Sachin Tendulkar, one of the greatest batsmen to ever grace the cricket field. The state has many cricket venues and a very successful domestic team, as well as an IPL franchise – the Mumbai Indians.

The main cricket stadiums in Maharashtra are the Wankhede Stadium and DY Patil Stadium in Mumbai, 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 to the rafters.

While residents of Maharashtra are cricket crazy, 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 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 crack down on illegal bookmakers periodically but it’s always the small fry who are targeted while the big wigs get away scot-free. In 2015, a Supreme Court-appointed Special Investigation Team (SIT) revealed that cricket betting is a key source of black money.

That same year, while disposing of a case related to IPL match-fixing, the Delhi High Court observed that cricket is a game that involves a considerable amount of skill, and betting on it cannot be considered as based on luck alone.

In 2016, the Supreme Court asked the Law Commission to consider the issue of legalizing sports betting in India. The Commission in 2017 recommended that cricket and sports betting should be legalized and controlled through strict laws. The ball is now in the court of the Indian Parliament, but there have been no updates in the last 3 years.

Maharashtra To Control Online Gambling?

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.

In 2018, the Government announced plans to introduce new laws to curb online gambling and betting in Maharashtra. This was in response to an online betting scandal that was exposed that year, involving Rs 200 crores. It involved several websites and apps owned and operated by GameKing, an Indian company started by Ramesh Chaurasia.

As of 2020, no further action has been taken by the state government in this regard. Players can safely register at many offshore sportsbooks and place bets on cricket and other popular sports from Maharashtra.

On paper at least, betting on other sports besides cricket 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 Maharashtra

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

Under that act, passed by the government under the leadership of Chief Minister Shankarrao Chavan, 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% of the total amount wagered in taxes from the owners.

What is notable is that this Maharashtra Casinos (Control and Tax) Act, 1976 was to supersede provisions of the Bombay Prevention of Gambling Act, 1887, 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, 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, then a 22-year-old law student, was the first one to challenge the government on this subject, providing details on the need for the Act to be implemented, the possible revenue that could be collected, and apprehension on whether it could increase crime.

The objective was 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.

In 2016, the State Government was reportedly considering its options on the subject. They could either repeal the law or consider ways to implement it in the state. But as with many other proposals related to gambling in other states, no progress has been. In 2020, the law remains on the books, but the state is not yet ready to act decisively on it.

Lottery in Maharashtra

As mentioned earlier, horse racing and lotteries are the only two forms of gambling permitted in the state of Maharashtra. The lottery is governed by The Lotteries (Regulation) Act of 1998 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 offence is considered non-bailable and cognizable.

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

The main lottery in the state is the Maharashtra Rajya Lottery. But its sales are low, resulting in revenues of just 132 crores annually, while other states like Kerala earn ten times more than that from lotteries.

The state government has blamed the proliferation of online sales of lotteries from other states for this situation. In 2020, the Deputy CM and Finance Minister of the state, Ajit Pawar declared that online sales of other-state lotteries would be strictly banned in Maharashtra.  

Flush, Rummy, Poker and other Card Games

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. 

Despite such court decisions, raids by police on rummy clubs are quite common in the state. In 2017, a prominent incident in Nagpur resulted in the High Court quashing cases against 27 members of a club in Amravati. The Nagpur bench of the High Court noted that the accused were playing rummy, which is not illegal under the Maharashtra Prevention of Gambling Act, 1887.

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 (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.

In 2015, there were some indications that the Maharashtra government was considering the legalization of rummy cafes in the state. But this proposal faced stiff resistance from the police, who took the stance that such a move would lead to more gambling and crime. In the end, nothing came from that proposal.

Prominent activists like young Jay Sayta have filed PILs to make some impact. But so far, change has not been forthcoming on the state’s gaming laws. And 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.

We hope the above guide provided all the information you need to be informed on Maharashtra betting laws.