Source: https://kheladhikar.com/2018/02/23/gujarat-high-court-folds-on-poker-2/
Timestamp: 2019-04-19 04:21:44+00:00

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An onslaught of litigation pertaining to the legality of poker has suddenly gripped multiple high courts across India. The dilemma arises due to the diverse and ambiguous gambling laws that have been enacted in the country. Gambling although regulated and licensed in countries such as US and UK, is completely prohibited in India. Each state has the mandate under List II Entry 34 of the Constitution of India to decide which games would constitute gambling under the state and whether to legalise gambling. Most states (except for Sikkim and Goa) have enacted gambling laws prohibiting gambling within their jurisdiction. These Acts have a generally drafted exception clause which exempts ‘games of skill’ from the definition of gambling. This prejudice towards gambling and the ambiguous exemption clause is the result of a straight-jacketed application of the pre-independence Prevention of Gambling Laws Act, 1887.
Over time the ambiguous exemption clause which prevents “games of skill” from falling within the definition of gambling came to be interpreted by the Honourable Supreme Court. Slowly the test of predominance was evolved and betting on horse racing, rummy, bridge, video games came to be excluded from the definition of gambling and were legally played. It is pertinent to note however, that regardless of these cases, states in India have continued to lack foresight and define which games will be permitted or excluded (certain states such as West Bengal and Nagaland are exceptions). This is the reason why the question of legalisation of poker has now arisen in the states of Gujarat, Bombay and Delhi, with the Dominance Games Pvt Ltd v. State of Gujarat (Dominance Games judgement) in Gujarat at its helm.
Before the article analyses the merits of the case, let us briefly understand the position of gambling laws in the country (for detailed analysis on gambling laws look here). Any game in which the skill predominates the game and determines the outcome of the game is considered as game of skill. This is the test of predominance which flows from US case laws. In UK on the other hand, a game where even an element of chance will affect the outcome of the game will be considered as gambling. This was seen in the R v Kelly judgement where the court considered poker as gambling merely on the basis of an element of chance.
In anticipation of the Dominance Games judgement, KhelAdhikar had already posted an article on the arguments of legalisation of poker. The single judge bench decision provided by Justice Shukla on December 4th, 2017 considered nearly the same amalgamation of arguments, except for an unforeseen analysis of the skill element of bluffing in poker. In this instance, section 13 of the Gujarat Prevention of Gambling Act, 1887 which exempts ‘games of skill’ is being subjected to interpretation.
Counsel spent a considerable time laying that the test of predominance was the standard by which to determine whether poker was a game of skill or chance. For this he relied on the Supreme Court judgements of State Of Andhra Pradesh v. K. Satyanarayana & Ors., (rummy, bridge)(Satyanarayana) and Dr. K.R. Lakshmanan v. State of Tamil Nadu & Anr. (horse racing)(Lakshmanan). The judgement of Satyanarayana has observed that any game possesses the element of chance and therefore, the mere presence of chance cannot make a game akin to gambling. Therefore, the test of predominance was adopted.
Placed reliance on Research & Review Journal by Robert C. Hannum Anthony N.Cabot, “Towards Legalization of Poker : The Skill Vs. Chance Debate” to state that skill predominated the game and could determine its outcome and there was skill involved in learning how to bet.
Therefore, poker did not fall within the ambit of gambling and was protected as a trade and profession under Article 19(1)(g). The petitioners can henceforth not be prevented from carrying on their business.
Substantially relied on portions of RMD v Chamarbaugwala to show that gambling corroded the social fabric of society and resulted in the loss of hard earned money.
Poker requires the ability to match the cards you already hold to the ones that have been distributed. The random distribution of cards seals the fate of the game and the skill is employed only in determining how to use them.
Referred to the Britannic Dictionary’s definition where poker is included in the definition of gambling.
Also relied on M.J. Sivani v. State of Karnataka judgement where ‘poker double up’ was considered a game of chance. Although poker double up was a casino game, it was argued that the method of playing between Texas Hold’em and Poker Double Up did not substantially differ.
Poker originates from games such as Teen Patti and Brag which are pure games of chance.
Also stated that by being played in a tournament the aforementioned circumstances do not change and poker would continue to be played as a game of chance.
The judgment clarified that while poker is permitted in other countries it is also regulated on account of its possible social implications.
Relied on RMD v Chamarbaugwalla and held that gambling created an addiction in hard working men which led them to splurge their money. It is unacceptable to allow this in India’s social context where people lack awareness and are still struggling for necessities. Also relied on texts of Manu and Yajnavalkya. While gambling was prohibited in the texts of Manu it was required to be regulated under Yajnavalkya.
Legalisation of horse racing cannot be considered as legalisation of all forms of betting, as an exception for it has been specifically created in the statutes of the states. This implies that only horse racing as betting is legal and not all forms of betting, such as the one involved in playing Poker.
Placing reliance on Satyanarayana to show that betting and analysis in horse racing are similar to the analysis involved in Poker would be incorrect. The skill element in Poker relies on deception and bluffing of opponents. Such deception and bluffing could be considered as fraudulent misrepresentation designed to mislead a person while playing the game. Such deception will be considered as cheating under section 420 of the Indian Penal Code, 1860 (IPC). Therefore, the skill component of Poker cannot be practiced.
The court also held that the manner in which a person chose to bet or fold did not depend necessarily on his evaluative skill but also upon his risk taking nature and the depth of his pockets. This leaves the game with the players having to rely on a random distribution of cards. Therefore, the game is one of pure chance and is to be considered as gambling.
Relied on Satyanarayana to hold that any game, irrespective of whether it is predominated by skill, if played with stakes would be considered as a gambling. Therefore, it derived two tests from the Satyanarayana judgement. First, that predominance of skill meant that it was not gambling and secondly, any game, even of skill, would be considered as gambling. It differentiated between rummy and poker, by showing that rummy did not inherently require betting of money to play the game, but poker did. Therefore, poker could never be played as a game of skill.
Adjudicated that poker could not be covered under Article 19(1)(g) as it was gambling and therefore res extra commercium.
The court has selectively picked a portion from the Satyanarayana judgment which mentioned that even when games of skill are played with stakes, it will be considered as a game of chance. The judgement in Satyanarayana wished to prevent a common gaming house from charging customers more than an administrative fee and earning wages from the amount of bets placed and won. Hence, it provided that any game that is played with the operator earning more than the administrative fees would be considered as gambling. Although, this argument does not seem necessary to qualify a game as gambling, it has now been adopted by the Supreme Court of the country and unless it is reconsidered, the high courts must follow it. However, in this case there has also been a skewed interpretation of the judgement to proclaim that any game of skill played with stakes would be considered a game of chance. It would imply that even if two people were to bet money regarding which one of them would win a game of chess, it would be considered as gambling.
The court’s analysis of the skill-based element of bluffing does not pass the litmus test required to prove cheating under the IPC. Cheating under section 420 of the IPC requires a party to be induced fraudulently into doing or omitting to do something which it would not have done save for the influence of the person cheating them. In this case, bluffing or deceiving the opponent is part of the rules for poker and anyone playing the game would expect the other person to bluff. If someone agrees to bluffing or misrepresentation as a part of a skill-based game, then it hardly constitutes as an illegal act.
Moreover, in considering whether any skills are used in playing poker, the court did not consider all facets of the gameplay. Aside from bluffing and the random distribution of cards, poker involves skills such as strategizing about which cards to play and the ability to understand the body language of other players.
A Letters Patent Appeal has been filed by KN Suresh, secretary of Indian Poker Association. The matter will now be heard on 28th February, 2018 by a division bench of the High Court comprising of Chief Justice R. Subhash Reddy and Justice Vipul M Pancholi. It is hoped that this appeal will reconsider the legality of poker and clarify the tests that are needed to determine games of skill.
 Dr. K.R. Lakshmanan v. State of Tamil Nadu & Anr., (1996) 2 SCC 226.
 State Of Andhra Pradesh v. K. Satyanarayana & Ors., 1968 AIR 825.
 M.J. Sivani v. State of Karnataka, 1995(3) SCR 329.
“She, therefore, submitted that one cannot claim fundamental right to carry on trade and business, which is prohibited by the Legislature by the statute like Gambling Act. She also referred to the judgment of the Hon’ble Apex Court in case of M.J. Sivani & Ors. Vs. State of Karnataka & Ors., reported in (1995) 6 SCC 289 and referred to the observations made in Paragraph Nos.18, 19, 20, 29 and 30.

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