The State of Telangana officially separated from Andhra Pradesh in June 2014. The city of Hyderabad, one of the major horse racing centers in the country, remains the de jure capital of both Andhra Pradesh and Telangana for up to 10 years.
Gambling in Telangana is still governed by the Andhra Pradesh Gaming Act of 1974 where gambling in most forms is illegal. The only exceptions are the state run lottery, horse racing, and rummy. Any violation of the Act leads to arrests and fines although they are negligible in many cases. However, the penalties for repeat offenders are much more serious.
As Hyderabad remains the capital tote and pool betting on horse racing remains legal. Taxes from gambling add millions of dollars every year to the exchequer while other forms of betting considered illegal under the Act also continue to proliferate.
Games like teen patti or 3 Card Indian Flush. cock fights and pigeon racing are popular as gambling dens in Hyderabad and smaller cities and town flourish. Interestingly, between 2007-12 the state recorded 2,67,718 gambling cases, the highest in the country from 2007-12.
According to a KPMG report, India’s gaming market is worth over $60 billion and still growing. The state of Telangana is a major contributor to the gambling industry. Despite this, the country’s laws still remain unfavorable for games of chance and probability. Many laws like the Public Gambling Act, 1867 are archaic and prohibit any game of chance or probability expect for lotteries. The state now collects taxes from horse racing clubs under the provisions of the Andhra Pradesh (Telangana Area) Horse Racing and Betting Tax (Amendment) Act 1986.
In August 2014, Telangana’s Chief Minister, K. Chandrashekhar Rao announced the permanent closure of gambling clubs. Many of these well known clubs are located in areas such as Begumpet, Banjara Hills, Lower Tank Bund, Bowenpally, and Abids, to name a few. Many of these clubs earn thousands of dollars every day and have come in for much criticism because they often remain untouched while smaller clubs are raided.
For the most part the Public Gambling Act, 1867 remains the central legislation while the Andhra Pradesh Gaming Act of 1974 defines gambling as an act of betting or wagering for money and prohibits the use of land based premises for making profits or gains on gambling. The 1867 Act states that it is not necessary to prove that an individual found at a gaming house was placing wagers in order to prosecute and convict them. However, the fine remains as small as $1.50 or one month’s imprisonment under the Indian Penal Code (45 of 1860).
Online gambling in the state of Telangana remains popular since current laws do not cover online gaming. The 2011 Federal Information Technology Act was introduced to curb the penetration of offshore betting sites that allow Indian residents to place wagers online on a host of products that include cricket betting, casino games, and more. However, there are still many grey areas and many online betting portals offer residents in the state of Telangana the opportunity to place wagers online.
As mentioned earlier, Telangana retains Hyderabad as the capital, which is why betting on horse races is legal. The racecourse at Malakpet run by the Hyderabad Race Club (HRC) is among the major racing centers in the country that permits off course betting. Keeping in view the case of Dr. K. R. Lakshmanan Vs State of Tamil Nadu in which the Supreme Court ruled that horse racing is a game of skill, the Hyderabad Race Club has been permitted by the government to run off course betting centers. currently horse racing is available to gamble online as well.
The racing club hosts a number of elite races that includes the Deccan Derby, President of India Gold Cup, and Nizam’s Gold Cup. The state collects taxes from the club under The Andhra Pradesh (Telangana Area) Horse Racing And Betting Tax Regulation 1358 F, which is over $1 million per year in addition to over quarter million in taxes to the Central Government as well. The law is one of the most outdated and even prompted the Hyderabad High Court to advise the state government to bring in new tax legislations and plug any loopholes in the law.
Punters have several off course tote centers operated by the Hyderabad Race Club to choose from. This includes centers in Hyderabad, Warangal, and Nizamabad, to name a few. These centers sell totalizer tickets for major racing centers throughout the country including Mumbai, Pune, and Bangalore, to name a few.
As with every other state in the country, Telangana prohibits betting on cricket and other sports under the Andhra Pradesh Gaming Act of 1974. Cricket betting still remains illegal although it is a multibillion dollar industry where illegal bookmakers thrive. Major illegal betting rackets are busted on a regular basis with the latest being by the Hyderabad police who recovered as much as $45,000 in cash, and several pieces of communication equipment from illegal bookmakers who were accepting bets on a match between South Africa and Bangladesh. That figure is much higher when matches involve Indian teams. Bets on cricket matches are usually conducted over the phone and involves a well networked set of individuals who accept wagers from punters. Several small kiosks and cigarette shops are also active participants in the business.
Any type of sports betting remains illegal in Telangana although there are several stakeholders who continue to urge the government to pass some form of legislation on sports betting given the number of people with disposable cash and the will to bet online. Currently, online betting is illegal and punishable under the Public Gambling Act 1967 and Indian Penal Code (IPC). The Information Technology Act 2000 considers online gambling a cyber crime although there are many loopholes.
Whether Telangana will continue to pursue efforts by earlier ministers from Andhra Pradesh to allow casinos to operate in the state is still unclear. Proposals for a world class gaming facility in Vizag have been floated. However, the port city is not in the jurisdiction of the new state of Telangana while the Andhra Pradesh government is in the process of redefining its plans to allow gaming and casinos to operate in the state. Currently, only Goa and Sikkim have passed legislation that permits casinos to operate.
Lottery is one of the products that the Public Gambling Act of 1867 permitted. However, the state of Telangana has banned the running of lottery even though at one time the state of Andhra Pradesh earned a significant sum from its now banned Bhagyalakshmi lottery that had the potential to rake in over $20 billion every year.
Other players like Playwin and the Essel Group have also been prohibited from operating online in the state. The state Human Rights Commission requested the Chief Secretary to impose a ban while a letter requesting the blocking of Playwin’s website was sent to the Director, Indian Computer Emergency Response Team (CERET-In). Curently, all lotteries are deemed illegal in accordance with the Andhra Pradesh (Telangana Area) Lotteries Act, 1968.
Card clubs continue to flourish in the state of Telangana where poker is considered a game of skill. However, the Hyderabad High Court did not grant relief to clubs that petitioned to prevent police from interfering in the operation of card rooms on club premises where members play rummy with stakes.
Ten clubs including Chiran Fort Club had challenged the shutdown of their operations by the police. The petitioners argued that in the case of Kishan Chander versus state of Madhya Pradesh the Supreme Court observed that rummy was a game of skill and not a game of chance, which made closure of the cad rooms illegal. However, the legal counsel for Telangana’s home department cited a recent case in the Madras High Court, Director General of Police v. Mahalakshmi Cultural Association, where the judge ruled that the provisions of the Chennai Police Act were applicable when rummy is played with stakes. The police invoked the Hyderabad Gambling Act and shut down the card rooms.
According to latest reports, the Supreme Court has declined to adjudicate in the case of ‘rummy for stakes’ matter of the Mahalakshmi Cultural Association. The decision came following the court’s obsersvation that the online rummy companies Junglee Games, Play Games 24Ã—7 and others were not party to the Madras High Court judgment. The judges are likely to pass an order on offline rummy in the next few weeks. However, this order may not have an adverse impact on online rummy companies but has brought clarity on the issue of rummy as a game of skill. The gaming industry has much to gain if the Supreme Court passes a final order in favor of rummy clubs. Telangana is likely to watch developments closely.