Skill v chance in gaming law: online commission-based wagering portals were treated as unprotected, with ancillary liability upheld.

Games are treated as games of skill where skill predominates over chance; on that test, Rummy, Chess, Golf, Bridge and Billiards were regarded as games of skill, while Poker was left in a grey area and not accepted as a game of skill. Physical wagering on games of skill was treated as lawful, but online gaming portals that offer such games for money and take commission from winnings were treated as operating like gaming houses and not protected as lawful business under Article 19(1)(g). On that basis, promotion of such websites could be curtailed, banking services could be refused, and the company, its directors and agents could face penal liability.

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Issues: (i) Whether Rummy, Chess, Golf, Bridge and Billiards are games of skill, and whether Poker is also a game of skill; (ii) Whether betting on games of skill through an online gaming portal, especially where the service provider takes a commission from the winnings, is protected as a lawful business activity under Article 19(1)(g) of the Constitution of India; (iii) Whether such online gaming websites may be advertised or promoted, whether banks may refuse banking services to them, and whether the company and its directors or agents may incur penal liability.

Issue (i): Whether Rummy, Chess, Golf, Bridge and Billiards are games of skill, and whether Poker is also a game of skill.

Analysis: The relevant test applied was whether skill predominates over chance. On the materials placed, Rummy, Chess, Golf, Bridge and Billiards were found to involve substantial skill, with chance being negligible or insignificant. Poker was treated differently because the material showed conflicting views and a divided position internationally, so it was placed in a grey area rather than accepted as a game of skill.

Conclusion: Rummy, Chess, Golf, Bridge and Billiards were held to be games of skill. Poker was not accepted as a game of skill.

Issue (ii): Whether betting on games of skill through an online gaming portal, especially where the service provider takes a commission from the winnings, is protected as a lawful business activity under Article 19(1)(g) of the Constitution of India.

Analysis: The decision distinguished between games of skill played in physical form and online gaming portals that function like gaming houses. While staking money in a physical game of skill between players was treated as not amounting to gambling, online platforms offering the same games for profit and taking a slice of the winnings were treated as operating a virtual casino. Such activity was held to fall outside protected trade or business and to be capable of prohibition by a State.

Conclusion: Physical-form betting on games of skill was treated as legal, but online commission-based gaming portals offering such games for money were not protected as lawful business activity under Article 19(1)(g).

Issue (iii): Whether such online gaming websites may be advertised or promoted, whether banks may refuse banking services to them, and whether the company and its directors or agents may incur penal liability.

Analysis: Since the online gaming model was treated as illegal in States prohibiting gambling, promotion of such websites was considered liable to be curtailed. Banking facilities could also be refused because payment gateways for such gambling-related activity were subject to blocking. On the same premise, the company and its connected persons could be exposed to penal consequences.

Conclusion: Advertising and promotion of such websites were held liable to be curtailed, banks could refuse services, and the company, its directors and agents could incur penal liability.

Final Conclusion: The opinion was answered partly in favour of the petitioner on the classification of certain physical games as games of skill, but against the petitioner on the legality of online profit-based gaming portals and the ancillary consequences flowing from that activity.

Ratio Decidendi: A game is treated as a game of skill when skill predominates over chance, but an online gaming portal that takes a commission from wagering or winnings may be treated as an illegal gaming house and not as protected business activity.

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