Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.

A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc. Companies like Flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.

The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.

Regulation of gambling

The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.

The following legislation is pertinent to gambling:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gambling

The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.

As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.

There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.

Enforcement over foreign jurisdictions

If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.

Some Answers to Your Questions About Gambling Addiction

How Do I Know If I Have A Gambling Addiction?
You will know if you have a gambling addiction if gambling has affected your life negatively socially, emotionally, financially and spiritually. If you have gambled alone, and have missed work, lost more than you could afford, or lied about gambling, you more than likely have a gambling addiction. “Compulsive Gambling” is considered an impulse control disorder and is characterized by unstoppable thoughts and uncontrollable impulses to gamble. “Problem Gambling” is considered less severe than compulsive gambling, but it is still a very serious problem.

Someone in my family is addicted to gambling. What should I do?
There are many paths you could take when a family member is addicted to gambling. You can go to a gamanon meeting yourself to get 12 -Step support from other family members of gamblers.(Check links and resources). This might be a good first step in finding out how to approach your family member, since every situation is different. Please check resources page for more information on this topic.

I have a gambling addiction and I have lost a lot of money. I am in debt, and I do not know what to do. Can you help?
Going into debt is one of the biggest after-effects of a gambling addiction. It can effect the gambler long after he or she stops gambling and is one of the long-term consequences of gambling addiction. When you attend a Gamblers Anonymous 12-Step Group you can find support from trusted members on how to deal with your debt problems. Please also visit the links and resources page to find out more about debt and credit solutions as a result of your gambling addiction. Remember, gambling addiction is not a money problem.. it is an emotional and spiritual problem with financial consequences.

Can I have a gambling addiction if I go to the casino.. but mostly win?
Yes. There are 4 phases of a gambling addiction. 1. Winning Phase: Usually starts with a big win and a belief that good luck will continue indefinitely. 2. Losing Phase: More pre-occupied with gambling. You are gambling alone, missing work, lying about your whereabouts, and beginning to chase your losses. 3. Desperation Phase: This is truly characterized by a loss of control, preoccupation with gambling, defaulting on most debt, cheating or stealing,loss of job or primary relationship. 4. Hopeless Phase: You hit rock bottom. You may also start abusing drugs or alcohol. Suicide thoughts and attempts are common in this phase.

I gamble when I am lonely and depressed. How come?
You are most likely known as an “escape gambler” You gamble to escape emotional pain. Most “escape gamblers” can become addicted to slot machines, online gambling, and bingo. An “action gambler” is someone who enjoys risk taking and gambles on games of skill such as sports betting, the stock market, and cards. “Action-gamblers” have been traditionally male, however, the genders are becoming well represented in each group.

When Gambling Takes Over

The casino is a world onto itself. There are no windows, no clock, but there are flashing lights, and the din of clacking coins and whirring slot machines. Beyond the slots, figures are mesmerized at the crap table. Interest in poker hit new heights with televised Texas Hold ‘Em tournaments. For the majority of gamblers, this is excitement, recreation, a fun diversion or escape from the ordinary and a chance to beat the odds. For others, an estimated three percent of the adult population, it’s an addiction, an endless roller coaster of excitement and despair.

A pervasive characteristic of addiction of any kind is that the repeated behaviors have led to a range of negative consequences. This may be putting it mildly in the case of pathological gambling, because someone in the grips of compulsive gambling usually suffers severe blows to finances and relationships before seeking help. His or her life may be in shambles.

Often the compulsive gambler’s denial leads him to believe that the next round will save the day. Of course, if the numbers come up right, the cash or credit won is then “invested” again. Gambling addiction is hardly a recent development, but the advent of electronic poker and the break-neck speed of today’s slot machines, as well as Internet gambling have actually sped up the time it takes to gamble for fun and when it slips into problematic, then compulsive behavior.

Pathological gambling, like other addictions, is both a biological and a behavioral disease. While we don’t know all the factors leading to gambling addiction, they often include social, family and psychological elements. We do know that the brain neuropathways involving the brain’s mechanisms are affected in an individual’s perception of rewarding experiences. The emotional escape that an individual finds in gambling may become entrenched.

We have seen from 15-20 percent of patients who suffer from cross-addictive disorders, such as alcoholism or drug dependency with problem gambling. Some estimates state that 35 percent of those with substance abuse or dependence also have met the diagnostic criteria for pathological gambling at some point in their lives. The SOGS (South Oaks Gambling Screen) is the accepted psychosocial diagnostic tool to identify a gambling problem and its progression.

Both substance and gambling addiction are progressive diseases, and may be characterized by inability to control impulses (to use or to gamble) denial, anxiety mood swings and depression and the need for instant gratification. Gambling, like chemical dependency, offers euphoric highs, which are inevitably followed by emotional valleys and usually remorse and shame. A major difference in gambling versus substance addiction is that the alcoholic or drug addict doesn’t believe the substance is the answer to recovery and to his problems, while the compulsive gambler believes the Big Win will be the answer to all his problems.

Gambling addictions can also result in symptoms such as blackouts and sleep disorders and hopelessness. Divorce, relationship and work problems, even arrests are some devastating consequences of compulsive gambling. A person’s general health is often neglected, including medical conditions that have been ignored. Gambling addiction is certainly a family disease, creating a dysfunctional family system that revolves around the individual’s addiction. Children may be emotionally stranded as well as physically neglected. Kids are affected long term too, with studies estimating 35 to 50 percent of children of pathological gamblers eventually experiencing gambling problems of their own.

It is important that when chemical and gambling addictions co-occur, they are treated at the same time. Like chemical dependency, gambling addiction is addressed in holistic treatment based on the Twelve Step Philosophy. Treatment is individualized and takes into account issues of gender and age.

Gambling: is it the money?

Some experts, including Dr. Henry Lesieur, St. John’s University, NY, who co-authored the SOGS screening assessment, believe it isn’t really about the money, even though money becomes a looming issue. Seeking action seems to be the major impetus for many. Being in action may be similar to the high of taking cocaine. “Chasing losses” is term use by habitual gamblers to describe attempting to recoup the gambling losses by winning. The action gambler usually likes to gamble on site, at a casino, racetrack, or other “live” venue. Often they are identified by casinos as “high rollers” and received comped rooms and meals. Others, though, don’t gamble for action so much as numb their feelings with compulsive gambling, so it becomes the ultimate, albeit temporary escape.

Age and gender as factors

A study by University of Connecticut Health Center psychiatrists published in 2002 evaluated gamblers seeking treatment and found significant differences by age and gender in pathological gamblers. Middle aged (aged 36-55) and older gamblers tended to include more women, at 45-55 percent, than younger gamblers (aged 18-35) at 23 percent. Middle aged and older women didn’t begin gambling regularly until the age of 55, while older men reported a habit of lifelong gambling. Perhaps surprisingly, the women also wagered greatest amounts in the month prior to treatment. Younger gamblers reported most problems with substance abuse, social and legal problems, while older gamblers found more employment-related problems.

There is hope for recovery

Pathological gamblers, like others who suffer from addiction can and do recover. Cognitive Behavioral Therapy, with Rational Emotive Behavioral Therapy, can change unhealthy behaviors and thoughts, including false beliefs, rationalizations, and self-destructive feelings. Dialectical Behavioral Therapy also helps individuals to meet life on its own terms rather than escape painful emotions with compulsive addictions.

A holistic treatment program that addresses the root issues of addiction as well as any co-occurring disorders is an effective approach that treats the whole person. Continuing care may be essential, especially for impulse control, as well as ongoing participation in support groups such as Gamblers Anonymous. The recovering gambler may also need professional financial advise, and family therapy can help to develop a supportive, healthy family structure for sustained recovery.