Ladies and gentlemen, place your virtual bets. The gambling bug has hit the Internet!
The world's first online casino - Internet Casinos, Inc. (ICI) - opened its doors on August 18, 1995, with 18 different games, online access to the National Lottery and a sports betting book.
Since then more than 1,400 sites, mostly domiciled in small Caribbean islands like Antigua, have given rise to an industry that grosses over $3 billion a year. Reason enough for their being watched closely by a lot of people in India. Of the estimated 14.5 million gamblers online, almost 30 per cent are from Asia. You do the math.
A bet can be placed in minutes. Anyone with a credit card can set up an offshore currency account with a gambling site, leaving them free to place bets on sporting events like Wimbledon, cricket, horse racing and Formula One, or join a virtual casino to play slot machines, roulette, blackjack, poker etc.
Companies like flutter and Betmart accept bets on anything from who is going to win the Nobel Prize to whether Madonna is getting a divorce or not. Bets can range from a nickel to thousands of dollars and according to whether you win or lose the amount is automatically adjusted to your account. The final balance can then either be mailed to you or left for future bets.
Sounds simple enough, doesn't it? The Indian legislature prohibits gambling on the Internet though, unlike the American Internet Gambling Prohibition Act (Kyl's Bill), it has yet to formulate a specific proposal dealing with an industry expected to grow to $6.4 billion by 2003. Nonetheless, the legal faculty feels that provisions among existing laws are enough to curb it in this country.
Take the Foreign Exchange Management (Foreign Currency Accounts By A Person Resident In India) Regulations, 2000. The Act says that no person resident in India can hold or maintain a foreign currency account unless they have permission from the Reserve Bank or fall under one of the following categories: multinational banks, authorised currency dealers, shipping or airline companies, insurance companies, exporters, students studying abroad or persons going out of the country to participate in an exhibition or fair.
Similarly, FEM (Current Account Transaction) Rules, 2000, prohibit the withdrawal of foreign exchange for the purchase of lottery tickets, sweepstakes, pool etc. And since one can only wager online after maintaining a foreign currency account (usually in dollars) linked to the casino, Indians will have to wait a while till sites like Sportingbet start accepting rupees.
Indian law also places severe restrictions on the industry itself. The Public Gambling Act of 1867 penalises the 'owning or keeping or having charge of a public gaming house' with a fine of Rs 200 or imprisonment of up to three months. Any person found in such a gaming house will be liable to a fine of Rs 100 or imprisonment of up to one month'.
There's also India's first cyber law, the Information Technology Act, 2000, to contend with. It prohibits the electronic publishing or transmission of any material that 'appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely… to read see or hear the matter contained or embodied in it…' Far more stringent than the Gambling Act, this law punishes offenders with a fine of Rs 100,000 or imprisonment up to five years.
The question many ask is, why regulate at all? Well, online gambling is not known as the 'crack cocaine' of gambling addiction for nothing. The industry sucks huge amounts of precious foreign exchange out of the country, leads to tax losses and the spread of organised crime, makes children vulnerable by its easy access and anonymity, facilitates credit card fraud and cannibalises other consumer spending. Data has shown that within three years of gambling being introduced in Atlantic City there was a tripling of total crime and suicide rates while alcoholism soared.
In spite of this, however, it seems that there is no beating the trend. Attempts at banning online gambling present technological and legal problems that the government is ill equipped to counter. For a start, most gambling sites are situated offshore, outside the jurisdiction of Indian courts, making punishment by Indian authorities a pipe dream. Betting companies contend that their practises are legal in countries where they operate and that Indian laws cannot shut them down.
Secondly, loss of evidence is common since all data is routinely destroyed and collection of evidence from outside the territorial extent paralyses the system. It is also impossible to prevent a site that has been blocked from quickly changing its Web address and resuming operations. Finally, as a local gambler asks, "Who is to say what you do in the privacy of your home?"
For a company that saves almost $300 million in building a virtual casino rather than a brick-and-mortar one, no lengths are too extreme. And with heavyweight players like Kerry Packer and Rupert Murdoch entering the field, countries like Australia and UK have chosen to regulate instead of prohibiting, recognising that a ban would be unenforceable.
India can also no longer afford to bury its head in the sand. Not when a simple click of the mouse across the country continues to turn any computer into a slot machine, any house into a sports betting hall and any town into a Las Vegas, albeit virtual.
Anubha Charan is a freelance journalist and practising lawyer.