The Gambling Laws and Climate in Daman
Did you know that not every state has the license to gamble in India? Well yes! As per the law, Goa, Daman & Diu, and Sikkim are the only regions that are currently exempt from the blanket ban. So, today, I’m going to focus only on the gambling laws in Daman.
Goa, Sikkim, and Daman & Diu are three places where not only are betting and gambling allowed, but also the State treasury accepts a major share of the revenue generated by Casinos and Gaming houses operated on the land or sea.
Since gambling and betting are banned in general, let’s take a look at the gambling laws and climate in Daman. I will also cover what’s in store for you, in case your travel itinerary includes a visit to casinos in Daman.
Overview of the Public Gambling Act of 1867
While the British ruled India, the then government passed a gambling act to regulate public gaming. Later, it went on to become the Public Gambling Act, 1867.
Although the Act itself is archaic according to today’s norms, it still continues to remain in effect across India.
Whether the redundant law should be scrapped in view of the changing social norms is something that still continues to be hotly debated. It’s also something I won’t delve into for now.
So here’s an overview of the Public Gambling Act of 1867 and its implications in the Indian gambling industry:
- As per the Goa, Daman and Diu Public Gambling Act of 1976, electronic amusement games and slot machines were allowed only in hotels with not less than 5 stars. The operators were also given leeway if gambling was organized on offshore vessels. However, in return, they were obligated to pay a recurring fee to keep the license.
- The list II of the Constitution of India made gambling a state subject where the state had regulatory rights to frame and enact gambling laws accordingly.
- While 2013 passed in a blink, what you didn’t know was that Goa pocketed 135 crores of gambling revenue due to people flocking the gambling houses and casinos. The astronomical revenue figures gave every sign of potential that this industry had to offer.
- According to tax laws, your winnings aren’t eligible for tax savings or exemptions. As a responsible taxpayer, it’s your responsibility to ensure that the 30% tax is deducted from winnings at the source.
- The Constitution of India entrusted the state with powers to control betting and gambling within its territory.
- Since the scope of law didn’t include lotteries, horse racing, and the online format of gambling, it wasn’t wholly applicable to wherever gambling or betting took place. However, the Act had regulations that extended to all land-based casinos and gambling houses in India.
- Although betting and gambling is a high-income segment, it continues to be banned indefinitely by the government of India. Even Indian courts averse to backing gambling and betting activities. Daman and Diu along with Goa and Sikkim are the only regions where gambling is legally permitted.
- According to the Public Gambling Act, you could legally keep your winnings by depositing the money into your bank account after paying 30% gambling tax you owe to the government, plus the 10% surcharge. Additionally, the income you earn from winnings is taxable according to the Income Tax Law because it’s considered as a “net income of an Individual.” In not doing so can attract a stiff penalty or jail term or even both.
- In the state of Sikkim, the enactment of the Pubic Gaming Act led to the government enforcing the regulation by approving select games for a recurring fee.
- Surprisingly, the colonial rulers who originally introduced the Public Gambling Act, 1867 in India had repealed the law back home in the wake of changing societal norms.
The Gambling Laws in Daman
In Daman, the law took a different turn after the enactment of Daman and Diu Public Gambling Act of 1976. It gave the gambling houses the permit to operate card-room out of offshore vessels.
The law also enabled slot machine positions to be set up in five-star hotels. The enactment made it compulsory for operators to seek the state’s approval to set up gambling houses. The operators had to incur a recurring fee to stay on the right side of the law.
Also, under the Indian gambling enactments, the game of skill didn’t fall under the purview of gambling laws.
However, it only compounded the problem because the classification was vague. It apparently complicated the classification on which the betting games were bifurcated as ‘game of chance’ and ‘game of skill’.
This became the grey area in the law that saw organizers taking advantage by setting up table-based card games on offshore vessels and motoring players to their floating casinos due to the lack of proper definitions.
The lotteries weren’t classified as a “game of chance” either. Therefore, some states permitted drawing lotteries under the condition that lotteries can’t be drawn more than thrice a week.
Classifying the Game of Skill and the Game of Chance
As societal norms and technology evolved, the existing laws became insufficient to cover all aspects of gambling.
Gambling, which originally was held in brick and mortar establishments, crept into digital spaces via the Internet. With this, the classification of the game of skill and the game of chance became ever challenging.
With the government toughening laws around the ‘game of chance’, several organizers made a push to promote betting games as ‘game of skill’ because it didn’t fall under the purview of the gambling laws.
In 1968, the Supreme Court of India performed a material element test on Rummy to determine if it’s a ‘game of skill’ or ‘game of chance’. The court held the verdict that Rummy was a game of skill because the outcome of the game depends on the player’s mental skills.
The Supreme Court also tested horse racing and ruled that it was a game of skill.
In a more recent case that fell before the high court in Bengaluru, Poker was ruled as a game of skill after the Police raided a popular poker room. In 2013, the ruling was in favor of the defendant.
A certain such situation also bought Daman casino scenario to light when Delta Corporation, the only publicly listed casino conglomerate saw its shares tumble after the rumor mills went into overdrive with news that the Indian government began the process of merging Daman and Diu with the Indian State of Gujarat.
The news didn’t do well with investors who panicked because Gujarat was averse to allowing gambling or betting in its territory.
According to a tabloid report in 2017, Delta Corporation Limited’s shares had plummeted by a whopping 18%. When the market closed, the individual shares were priced at $2.26. This incident occurred after Delta Corporations stocks were sold at $3.37 per share on April 5 which represented a 52-week high!
Setting up a casino here is no cheap affair either! Daman and Diu’s annual licence fee of ₹2 million (approx. $28,171) for a set of 20 machines/stages/tables or less onboard offshore casinos. In addition to that, there is a fee of ₹8,000 for the mother machine and ₹6,000 per additional stage of electronic amusement/slot machine in five star hotels.
Time and again, the betting and gambling laws are proven as nothing but a confusing set of guidelines to commoners. Navigating the exact terms and conditions can be futile in most cases because the Public Gambling Law is an ancient regulation that was put in place by former colonial rulers.
Until the law is repealed and its enactment rewrote in view of modern societal norms, it’ll continue being the most complex legal document to interpret.
If you’re someone visiting Daman or trying to understand the exact gambling laws and climate in Daman, it’s important to consult a legal advisor who can guide you with exact information about the prevailing laws.
The Gambling Industry in Daman is a small one with limited operators working with the tourism department to attract tourist traffic. However, a top casino corporation ran into troubled waters after rumors spread about a likely merger of Daman and Diu with Gujarat.
This sparked fear among investors and caused their stocks to dive. Later, the corporation fought a court battle with the Daman government to earn an operating license for a casino hotel inaugurated earlier in 2014.
Deltin Daman is one of a kind casino hotel and a must-visit place that’s on most people’s bucket list. If you are visiting Daman to experience what the casino industry has to offer, Deltin Daman is a great place to be if you have the budget.
It’s not just gambling where the hotel has earned its reputation, the experience is something to be had at another level. You can book your stay at Deltin Daman round the year and soak up the local experience as well as remnants of what was once upon a time a Portuguese colony.