Report No. 276
Distinction between Wagering, Gambling and Betting
3.1 Wagering is a generic term that encompasses within its ambit, the various acts of gambling and betting. It may or may not require an opposite party. In some instances, the operator conducts the process of gambling through various schemes. It involves people predicting the occurrence or non-occurrence of an event.
3.2 Manuhas defined Gambling as:
This verse means:
when inanimate (things) are used (for staking money on them), that is called among men gambling (dyuta), when animate beings are used (for the same purpose), one must know that to be betting (samahvaya) (223) When birds, rams, deer or other (animals) are caused to fight against one another after a wager has been laid, it is called betting (samahavya).
3.3 Kautilya's Arthshastra defined gambling as wagering with inanimate objects such as dice; and betting as something that involved challenges and was concerned with cock fights, animal races and similar contests21.
3.4 This differentiation may not be very apt in today's time because of the emergence of different forms of wagering.
3.5 Sir William Anson has defined a wager or bet as "A promise to give money or money's worth upon the determination or ascertainment of an uncertain event"22 or it can be said that a wager is a contract where two or more parties agree on a certain sum of money to be paid to one of them on the happening of an uncertain event23.
3.6 The Finance Act, 199424 defined "Betting or Gambling" under Section 65-B (15) as: means putting on stake something of value, particularly money, with consciousness of risk and hope of gain on the outcome of a game or a contest, whose result may be determined by chance or accident, or on the likelihood of anything occurring or not occurring.
3.7 However, the Finance Act, 201725 does not define Betting or Gambling.
3.8 Cambridge English Dictionary defines gambling as "the activity of risking money on the result of something, such as a game or horse race, hoping to make money26".
3.9 According to the Oxford English Dictionary, "Betting can be defined as an action of gambling money on the outcome of a race, game, or other unpredictable event"27.
3.10 According to the Black's Law Dictionary28 gambling is defined as "the act of risking something of value for a chance to win a prize".
3.11 Betting in sports, is the act of wagering on the result of the sporting event. The term "betting" is generally considered synonymous with wagering, however, it alludes to antes in connection with events in the nature of races or matches between individuals or teams29.
3.12 It can be said that wagering has various forms like gambling, betting and gaming. The United Kingdom Gambling Act, 200530, has defined gambling to include, betting, gaming and participation in a lottery. On the other hand, betting is defined as the "making or accepting of a bet on the outcome of a race, competition or other event or process, the likelihood of anything occurring or not occurring; or whether anything is or is not true."31.
3.13 Thus, betting can simply be defined as an act of putting at stake a wagering amount (valuable or liquid cash) on the prediction of occurrence or non-occurrence of an event. It is always done against a second party who places his stake against the one placed by the first party. Neither of the parties that have put at stake their wagering amounts should have any control over the event on which the amount is wagered.
On the other hand, gaming includes a game of chance or skill or a combination of both. Examples of such gaming activities would include Poker, Pool, Billiards, Fantasy Football, Internet Games, Crap, Roulette and Slot Machines.
3.14 "Lottery", being enumerated under Entry 40 of List I of the Seventh Schedule of the Constitution of India, has been generally excluded from the ambit of "gambling", which is a State subject under Entry 34 of List II of the Seventh Schedule. The Public Gambling Act, 1867 (as applicable to States such as Himachal Pradesh and Madhya Pradesh) as well as section 2(i) of the Delhi Public Gambling Act, 1955, suggest the same.
The Goa, Daman and Diu Public Gambling Act, 1976, expressly defines the term 'gaming' in the following words:
'[g]aming' includes (a) wagering or betting and includes wagering or betting on the digits of a numerical figure arrived at by manipulation in any manner whatsoever, or on the order of the digits, or on the digits themselves or on pictorial representations, (b) any transaction by which a person in any capacity whatever employs another person in any capacity whatever or engages for another in any capacity whatever, to wager or bet with any other person, (c) the collection or soliciting of bets, receipts or distribution of winnings or prizes in money or otherwise in respect of wagering or betting or any act which is intended to aid or facilitate wagering or betting or such collection, soliciting, receipt or distribution, but does not include a lottery.
3.15 The Supreme Court in the case of Dr. K. R. Lakshmanan v. State of Tamil Nadu & Anr.32, defined gambling as follows:
Gambling in a nut-shell is payment of a price for a chance to win a prize. Games may be of chance, or of skill or of skill and chance combined. A game of chance is determined entirely or in part by lot or mere luck. The throw of the dice, the turning of the wheel, the shuffling of the cards, are all modes of chance.
A game of skill, on the other hand - although the element of chance necessarily cannot be entirely eliminated - is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. Golf, chess and even Rummy are considered to be games of skill.
3.16 The Calcutta High Court in Bimalendu De v. Union of India33, referred to the definition of Gambling given in the Black's Law Dictionary34, and defined gambling as:
Making a bet occurs when there is a chance for profit if a player is skilful and lucky. A play for value against an uncertain event in hope of gaining something of value. It involves not only chance, but a hope of gaining something beyond the amount played. Gambling consists of a consideration, an element of chance, and a reward. The elements of gambling are payment of a price for a chance to win a prize.
3.17 The Supreme Court in M.J. Sivani & Ors. v. State of Karnataka & Ors.35 referred to two definitions of Gaming as given in the Strouds Judicial Dictionary and the Black's Law Dictionary36, as given below:
(i) The Strouds Judicial Dictionary:
To play any game, whether of skill or chance for money or money's worth; and the act is not less gaming because the game played is not in itself unlawful and whether it involved or did not involve skill.
(ii) The Black's Law Dictionary37
The practice or act of gambling. An agreement between two or more persons to play together at a game of chance for a stake or wager which is to become the property of the winner, and to which all contribute. The element of gaming are the presence of price or consideration, chance and prize or reward.
3.18 The Court also noted that section 2(7) of Mysore Police Act, 1963, defines "gaming" to mean that "it does not include a lottery but all forms of wagering or betting in connection with any game of chance, except wagering or betting on a horse-race, when such wagering or betting takes place". Accordingly, the Court defined 'Gaming' in the following words:
Gaming is to play any game whether of skill or chance for money or money's worth and the act is not less gaming because the game is not in itself unlawful and whether it involved or did not involve skill.
3.19 Though both Betting and Gambling are primarily wagers, there is a slight difference between the two terms. Wagering, gambling and betting are often mistaken to be synonymous. The Madras High Court in Public Prosecutor v. Veraj Lal Sheth38, explained the distinction as follows:
The principal distinction between gaming and betting or wagering is thus immediately apparent; in gaming the stake is laid by the players upon a game, the result of which may depend to some extent upon the skill of the players, but in a bet or wager, the winning or losing of stake depends solely upon the happening of an uncertain event.
3.20 Therefore, one may conclude that wagering, includes within its ever-so-wide meaning, gambling, betting and gaming. Gambling entails the occurrence or non-occurrence of an unpredictable event. An important distinction between betting and gambling is that in gambling, the stakes or wager is placed on an event without any clue of the outcome; whereas, in betting the stakes are placed on an event, the outcome of which is based on the performance of the players, influenced by their skill.