Centre argues anything involving money falls under ‘Gambling’ with ‘Seven Sutras
The future of India’s online gaming sector hangs in balance as the Supreme Court hears the Centre’s arguments on taxing online games played with stakes. The hearing, currently underway, could determine the legality and tax structure for skill-based and chance-based games alike.
As per today’s hearing in the Supreme Court, the Union government has stated that any game involving money amounts to gambling. This includes skill-based games when played for stakes. Additional Solicitor General N. Venkataraman, representing the Centre laid out some key principles terming them the “seven sutras” of gambling before a division bench led by Justices JB Pardiwala and R. Mahadevan.
He argued that financial stakes, not the nature of the game, define gambling. “A game of dice leads to a game of vice,” he told the court. The government maintained that outcomes involving uncertain results qualify as speculative and therefore fall under gambling.
The seven key principles were presented in a consolidated argument:
- There is no gambling if no stakes are involved, whether the game is based on skill or chance.
- Gambling arises once stakes are involved, regardless of the game’s nature.
- Even a game of chance involving a competition fee qualifies as gambling.
- A game of skill is not gambling by itself.
- When played with stakes, a game of skill becomes gambling.
- This does not reclassify the game into one of chance.
- Legal protections offered by some states to skill games with stakes only exist because these games are otherwise considered gambling.
