GAME OF SKILL – WHAT CONSTITUTES A GAME OF SKILL
As the Gaming Industry is undergoing dramatic changes one of the key questions that both gaming companies and gamers encounter is if the gameplay is a game of skill or pure luck which would make the game akin to gambling.
There are no restrictions on playing games of skill or games of chance when there are no monetary considerations involved and are played purely as an act of entertainment or enjoyment. The challenge comes when games are played with real money it comes under the preview of Public Gambling Act, 1867. Indian law between games of skill and games of chance when monetary offerings are involved. Games of skill are treated compared to any other act of entertainment but there are restrictions and prohibitions when money is involved in the game of chance.
The anti-gambling laws of most Indian states exempt games of mere skill. India’s Supreme Court defines “mere skill” to mean preponderance of skill, meaning the skill element should outweigh chance. According to the Supreme Court, games of skill do not amount to gambling and can be considered as commercial activities.
The major point of consideration which arises is the difference between gaming and gambling. The distinction has been made between games of skill and games of chance.
Games of chance/Gambling are a play for value against an uncertain event in the hope of gaining something of value and is entirely dependent on chance/ luck without any skill of the player involved.
Game of Skill – A game of skill can be defined as any game or contest in which the designating element of the outcome is the judgment, skill or adroitness of the participant in the contest rather than pure chance. Such type of games encourage the user to understand, experience and analyze aspects related to the game. A game of skill is when the player invests his/her time in learning, practicing and honing a skill to win a game.
The Legal framework clearly recognizes the games with below elements are not “gambling”
- where success depends on a substantial degree of skill; and
- despite there being an element of chance there is the requirement of application of skill.
The law in India states a game to be a game of skill, even with the element of chance if it depends upon:
- Superior knowledge;
- Adroitness of the Player;
- The element of skill predominates over the element of chance
Gaming/ gambling is a matter of jurisdiction of State legislations are governed as per State/ local laws. The States have devised their independent laws regulating gaming and gambling activities within their territories. While in most part of India allows games of skill however, in Assam, Odisha, and Telangana, you can’t play a game of skill for money.
Key judgments as to what contributes to the game of skill
In the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu the Supreme Court of India has interpreted the words “mere skill” to include games which are preponderantly of skill and have laid down that (i) the competitions where success depends on substantial degree of skill will not fall into the category of ‘gambling’; and (ii) despite there being an element of chance, if a game is preponderantly a game of skill, it would nevertheless be a game of “mere skill”. Hence, games which satisfy the test of skill are not regulated under gambling legislation.
In the case of State of Andhra Pradesh v. K Satyanarayana, the Supreme Court held that the thirteen card game of rummy was not a game entirely based on chance. The bench, while allowing the game of rummy to be played in clubs, observed “The game of Rummy is not a game entirely of chance like the ‘three-card’ game mentioned in the Madras case to which we were referred. The ‘three cards’ game which goes under different names such as ‘flush’, ‘brag’ etc. is a game of pure chance. Rummy, on the other hand, requires a certain amount of skill because the fall of the cards has to be memorized and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill.”
In the case of Dr. K.R. Lakshmanan v. State of Tamil Nadu, the Supreme Court held Horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better-trained jockey can touch the winning-post.
In the case of R.M.D. Chamarbaugwala versus Union of India (1957), the apex court said that for games where there was a certain level of skill involved, it wouldn’t be considered gambling.