Despite the growing popularity and the revenue generated by betting and gambling in the country, Indian laws and the Courts themselves have been averse to any game of chance and probability; except in the states of Goa and Sikkim.
Sikkim is considered one of the most liberal states when it comes to gambling laws. The Government of Sikkim issued a memorandum on March 4, 2009 known as the Sikkim Online Gaming (Regulation) Rules, 2009, which was a follow up on the Sikkim Online Gaming (Regulation) Act, 2008.
The state therefore became the first to move towards some sort of legislation on online gambling, which has been taboo for most states in the country for decades. It is also one of the states to permit lotteries with the Sikkim State Lotteries being one of the most popular lotteries with draws held frequently, as much as two or three times a day.
The Sikkim Online Gaming (Regulation) Rules, 2009 is considered a ground breaking law that made it legal to play online, a number of casino games such as blackjack, roulette, keno, baccarat, bingo, and poker, to name a few. Gaming operators can apply for a license, which if approved, will be issued a one year renewable license costing around $2,000 annually.
The Government of Sikkim first issues a provisional license if it is satisfied with the applicant’s ability to provide the necessary infrastructure to commence online operations. Once the applicant is ready to operate online gaming and sports gaming in compliance with the rules of the Sikkim Online Gaming (Regulation) Rules, 2009, the government may grant a regular license on a payment of around $8,000 for five years. In addition, online operators are required to post a bank guarantee of around $1 million with the government, which is valid for one year.
According to the terms and conditions of the Act, the license permits the operator to conduct online games and sports games only in the State of Sikkim.
Operators are required to pay a monthly tax of 1% of gross yield from gaming. It is also mandatory for all licensed online gambling sites to display specific information such as details of the registered company and its office, information on its license and a statement that the site is regulated by the State of Sikkim. Other conditions include hyperlinks to government sites and Gamblers Anonymous and various legal statements concerning the prohibition of underage players.
Strict laws on advertising standards have also been set by the state under the Sikkim Online Gaming (Regulation) Rules, 2009 Act. In addition, there are strict rules and regulations on fair play, auditing, security of transactions, publishing the house advantage, random number generation, and more.
Several amendments were made to the Act where the words “Online Gaming and Sport Gaming” were added in place of “online games and online gaming”, giving more clarity to the state’s stand on online gaming.
Included to the list of approved games in August 2009 in addition to casinos games was cricket, football, horse racing, lawn tennis, and chess, to name a few, which involved predicting the results where bets could be placed on the outcome.
The objective was to make online sports betting in Sikkim legal, as long as the operator acquired the requisite gambling license under the terms and conditions of the Act. In March 2011, the Act was further amended with land based casinos taxed either 10% of gross gaming yield or around $200,000.
Betting on cricket in India remains primarily illegal.
The Sikkim Government posted the Sikkim Online Gaming (Regulation) Amendment Rules, 2009, to effect changes to the Sikkim Online Gaming (Regulation) Rules, 2009.
The amendments included online gaming and sports gaming, with cricket also featuring in the live of approved games.
Sikkim has been at the forefront in permitting casinos to operate.
The Sikkim Online Gaming (Regulation) Rules, 2009 Act provides the legal framework for casinos to operate in the state. In October 2014, M/s.
Future Gaming Solutions Private Limited was granted the first regular license for online gaming in the state, which is likely to change online gaming in the state. The company is headed by Santiago Martin, known as the lottery king. Future Gaming became the first operator to be issued a Provisional License (PL) for online gaming by the state. For the most part, this ended a five year wait and brought more clarity towards gambling in the state.
Currently, Casino Mahjong, which is run by the Mayfair Group, is a fully operational land based, five star casino, offering a range of table games and slot machines as well. The response has so far been overwhelming especially with the state aggressively marketing itself to tourists from around the globe.
The casino has a full-fledged license that was issued to the Mayfair Group, owned by Orissa based hotelier Dilip Ray, who has authorized Trio Ventures Private Limited, which has one of Sikkim Chief Minister Chamling’s son, Pawan Chamling as one of the co-managing directors. Casino Mahjong has around 150 dealers to assist amblers and charges around $9 as entry fee.
However, it was Casino Sikkim, run by the Teesta Ranjit Private Limited (TRPL) at Hotel Royal Plaza that was the first casino to launch in the state in March 2009. It was considered a pilot project by the government and was therefore exempt from having the mandatory five-star property status although it was later upgraded in order to comply with the terms and conditions for renewal of the license agreement.
The original owner of the property, Balchand Sarda leased it to a friend and former Congress leader from Assam, Moni Kumar Subba, who is also considered the lottery baron in the country. Casino Sikkim was involved in income tax issues under Section 133(A) of Income Tax Act 1961.
Teesta Ranjit Private Limited obtained a stay on investigations by the Income Tax Department, following which the High Court passed an interim order stating that no further action could be taken by the tax authorities on the firm and Casino Sikkim until further orders from the court. In November 2013, the High Court vacated the stay and set 14 July 2014 as the date for the next hearing. TRPL paid its dues to the Sikkim government but did not renew its operating license until later.
Casino Sikkim, which is located on the first floor of Royal Plaza Hotel in Gangtok, now offers a range of games that include baccarat, blackjack, roulette, flush, and slot machines.
For the most part, lotteries have been excluded from the purview of gaming leglisations where states, under the Lotteries (Regulation) Act, 1998 [6], are allowed to promote and conduct lotteries in accordance with Central Lotteries Laws.
Currently, Sikkim is one of the most liberal states when it comes to lotteries. Both paper and online lotteries have boosted revenue for the Sikkim government.
Pan India, which conducts Playwin lottery, is one of the state’s most successful lotteries while licenses have also been issued to Samit Online and Future Gaming Solutions India Pvt. Ltd, who now also has an online gaming license. It is estimated that the Sikkim government earns as much as 50 crores in revenue from lottery licenses. Revenue from lottery sales has jumped from 1 percent to over 20% since it is now played online.
The fact that the Sikkim government has promoted online gaming leaves no doubt that poker, flush, blackjack, rummy, and other card games are popular in the state, especially at its land based casinos.
Currently, online poker play and other games is restricted to players living within the geographical boundaries of Sikkim.
With as many as four ‘go live’ licenses already issued to gaming operators, poker players and fans of other card games will be spoiled for choice.
The issue of licenses sends a positive message to the Supreme Court to rule on pending decisions on online rummy.
Players now have the choice to visit the casinos in the state and also play their favorite card games online. ‘I Love Cash Games’, a weeklong poker series was hosted by Casino Mahjong with several poker games including No Limit Texas Hold’em, Cobra, OFC and Omaha, offered to Sikkim players.
Currently, under The Information Technology Act, 2000, online gambling is restricted to within the state of Sikkim while offshore sites remain blocked. However, the state is likely to pave the way a better future for online gambling in the state that freely permits poker, rummy, flush, and other card games be played at clubs and casinos in the state.
Lottery king Santiago Martin, was the first to obtain a regular license for online gaming operations issued to M/s. Future Gaming Solutions Private Limited. The company became the first Provisional License (PL) holder to procure a regular license. It was broadly considered that online gaming services could be offered across the country.
However, the Union Ministry of Home Affairs issued a notification to the Sikkim government in April 2014 stating that gambling must be restricted to the boundaries of the state while it was not permitted to offer online gambling services to other states in accordance with 34 List II of Seventh Schedule of the Constitution.
For the most part, Sikkim is likely to be the state to be closely watched by others to see how online gambling in India pans out. This may also prompt inter-state pacts between states just like the US which is slowly changing its stand on online gaming.
In January 2015, M/s Maarm International Private Limited was issued a regular license by the Sikkim lottery department. This was the second license to be issued on conditions that online sports betting be permitted only within the state through an intranet connection. The ‘go live’ license issued to Maarm provides a major impetus for other operators to follow suit while Maarm is also considering collaborating with other companies, such as Golden Lotteries, an famous lottery brand, to provide state of the art gaming facilities.
The Essel Group was the next to be issued a ‘go live’ license and is expected to begin operations in the state soon. M/s Pan India Network Ltd, a subsidiary of Essel Group that runs Playwin lotteries in the state may start offering virtual horse racing once some of the rules and provisions in the current legislation are amended in the Sikkim Online Gaming (Regulation) Rules, 2009.
Amendments to the Act will bring clarity to the extent which online gaming will be allowed in Sikkim. All the provisional license holders are updating their infrastructure in order to begin full-fledged operations.
We hope the above guide provided all the information you need to be informed on Sikkim betting laws.
