LEGAL ADMISSIBILITY OF “HOUSIE MATH FANTASY”

This has reference to your request for providing legal opinion on the development of “Housie Math Fantasy”(hereinafter referred to as the “Game”) involving real money and a payment gateway to include a substantial degree of skills through your website and/ or mobile application (hereinafter jointly referred as “Portal”).

Henceforth as per our knowledge and understanding herewith providing you with our comments for the Game.

Please be advised that we have reviewed the revised scheme of the Game proposed to be provided on the Portal.

We understand that the Game proposed to be offered by you is governed by the following rules:

  • The players are required to purchase a Housie ticket for participating in a selected contest (online multiplayer/ private multiplayer) available on the Portal.
  • Each Housie ticket shall contain 15 random numbers ranging from 1-90. The players are permitted to shuffle the digits appearing on the generated Housie ticket before the commencement of the Game.
  • Each contest will start at the specified time and once the Game starts numbers will be announced by the Game operator randomly from the range -8 to 99 which will be displayed on top of the Game Play Area for each Game. The Game operator shall also randomly decide the pattern for calculation of ticket number (addition or subtraction) in between ranges from +1 to +9 or -1 to -9.
  • Only the players who can do the calculation and generate the ticket number within the prescribed time limit shall be able to strike the number if the same is present on their Housie ticket.
  • Each player will have to answer the question within a specified time limit.
  • Each contest will offer a number of prizes including but not limited to Early 13, 6 corners, First Row, Second Row, Last Row, and Full Housie and the first player who is able to do the winning combination in the above-mentioned gaming categories will win the Game.

A perusal of the revised scheme of the Game, therefore, reveals that success in the Game depends principally upon the mathematical reasoning, alertness, training, experience, speed, and adroitness of the player. The Game involves the predominance of skill over chance. Games of skill are different from gambling or Game of chance and are, therefore, outside the periphery of gambling (online/ offline, actual or simulated) and are not prohibited.

A. Indian Law on Gambling

  • The central legislation governing gambling in India is the Public Gambling Ac, 1867. This act criminalizes:
    • (a) The act of gambling in a public forum,
    • (b) The keeping of a “common gambling house” refers to a house, walled enclosure, room or place in which instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using, or keeping such place whether by way of charge for the use of the instruments of gaming, or of the house, or otherwise howsoever.
  • The Constitution of India vides entry 34 List II of the Seventh Schedule imparts exclusiveauthorityontherespectiveStatelegislationstomonitorthebetting/gaming/gambling activities within their respective area. The anti-gambling legislations are mostly in consonance with the Public Gambling Act, of 1867 and include the exception in favour of “games of skill”.
  • By virtue of report of the 246th Report of the Law Commission of India, gambling has been defined as putting at stake something of value, particularly money, with a consciousness of risk and hope of gain on the outcome of a Gameoracontest, whose result may be determined by chance or accident, or on the likelihood of anything occurring or not occurring.
  • The Court of law in India in the case of Shri K. L. Mansukhani v. Senior Inspector &Ors., 1999 SCC OnLineBom 843, has recognized gambling to be an act comprising of the following elements:
    • a) Playforvalue
    • b) Playagainstanuncertain event
    • c) The hope of gaining something beyond the amount played
    • d) Elementofchance
    • e) Payment of a price for a chance to win a prize.

B. Exception in Favour of Games of Skill

  • Section 12 of the Public Gambling Act, 1867states that games of mere skill are exempt from the application of the Act. The Hon’ble Supreme Court has interpreted the phrase “games of mere skill” to mean games where there is a predominance of skill. In the case of State of Karnataka v. K. SatyanarayanaAIR 1968 SC 825, the Supreme Court defined a “game of mere skill” to mean a game, “in which, although the element of chance necessarily cannot be entirely eliminated, success depends principally upon the superior knowledge, training, attention, experience, and adroitness of the player.” Such games are not deemed to constitute ‘gambling’ and hence are not prohibited under gambling laws. The element of skill must pre-dominate the element of chance in affecting the results of the game.
  • The legal framework recognizes that the Games with the below elements are not "gambling” as held in the case of State of Bombay v. RMD Chamarbaugwala, A.I.R., 1957 S.C. 699, where success depends on the employment of a substantial degree of skill; and despite there being an element of chance the requirement of application of skill.

C. Position of law

  • Gambling activities in India are perse prohibited by the virtue of the provisions of the Public Gambling Act of 1867.
  • The State legislations have been granted exclusive power to control and regulate all the acts including betting/gaming/gambling being conducted within their boundaries bytheConstitutionofIndia.
  • By the virtue of the above, a few States, as listed below, have permitted the conduct of gambling activities in India (including the running of casinos) in the exercise of the power granted to them, for the purpose to promote tourism and create employment:
    • (a) Western State of Goa and Western union territories of Daman & Diu (as per theGoa, Damanand Diu PublicGambling Act, 1976).
    • (b) North-eastern State of Sikkim (Online Gaming Regulation Act2008 and Rules 2009).
    • (c) Online skill Games are permitted by the virtue of the provisions of the Nagaland Prohibition of Gambling and promotion of Online Games of Skill Act, 2016 enforced by the government of the State of Nagaland.

D. Our Comments

The Game proposed to be provided on the Portal involving real money appears to be a Game of skill as success in the Game requires mathematical reasoning, attention, experience, and adroitness on the part of the players. The player must be able to do the mathematical calculation to generate the ticket number and strike out such a number if it appears on the player’s Housie ticket. Therefore, the player is required to be alert and attentive to ensure that the ticket number is calculated within the prescribed time limit. Accordingly, the Game proposed to be offered on the Portal appears to be a Game of skill different from gambling or a Game of chance and is, therefore, outside the periphery of gambling and is not prohibited.

Legal Opinion By: S. S. RANA & Co. Advocates, New Delhi, 110017, India