Web firm wanted to know if betting on games such as chess is gambling.
A Delhi court has ruled that “online games involving betting with the websites hosting it and charging a part of the winning prize from participants is illegal” in the states where gambling is banned.
The court said this “business” does not enjoy protection granted by the Constitution to “freedom of trade” and banks can refuse to provide services to such websites.
Additional District Judge Ina Malhotra said this in an order on a petition filed by the founders of an Internet startup.
“While betting or playing for money among players on a game of golf, chess, bridge or billiards may be permitted, they cannot be considered legal if operated by a gaming house. Such an online business activity would not be protected under Article 19 (1)(g) of the Constitution,” the court said.
The court’s opinion was sought by the Internet startup company founded by an IIT-Delhi alumnus and his friends having experience in online financial domains.
The company said that it was proposing to launch a website offering six games — chess, billiards, rummy, poker, bridge and snooker. It sought the court’s opinion whether these six are “games of skills” and if betting on such games makes it a gambling activity.
The petition said the six games are recognised as “games of skill” and that the company did not bet against any of its players.
The company stated that the website would charge a limited commission of under five per cent on the winning hand. That’s why it sought the court’s opinion about the legalities involved.
The court, after going through the arguments advanced by the counsel for the petitioner and documents placed on record, said online games offering money are illegal in states which prohibits gambling, though betting on “games of skill” played physically has been held legal by the Supreme Court.
The company said it entered into an agreement on February 14 with an independent investor, wanting to make financial contribution which would grant it a share in the equity in the business.
It said the investor has