The Prize Competition Act was enforced by Parliament on October 22nd, 1955 to restrict games that awarded prizes as winnings. The law reads that any prize competition where a prize is offered on solving a puzzle, either number, alphabet, cross word, missing word, or picture prize competitions, where the prize exceeds 1,000 Rupees shall be prohibited under the new Prize Competition Act. Before the Act was enforced the territories of Andhra, Bombay, Madras, Orissa, Uttar Pradesh, Hyderabad, Madhya Pradesh, East of Punjab all had their own versions of this law. When this law was enacted it replaced all the territory laws on this matter.
A Breakdown Of The Prize Competition Act’s 20 Original Sections
The Act contains 20 sections most of which deal with punishments, some of which contain licensing options. In this section I’m going to cherry pick the most important aspects of this Act and give a brief detail of what each section means.
Section 1-3 starts by introducing its title, listing what territories it shall be enforced upon and when the Act shall go into effect. It then moves on to a definition section for the terms used in the law and then into the interpretation of terms. Around section 4 it starts to get interesting and into the foundation for the Prize Competition Act.
The 4th section is the basis for the law and is entitled “Prohibition of prize competitions where the prize offered exceeds one thousand rupees a month.” And states that “No person shall promote or conduct any prize competition or competitions in which the total value of the prize or prizes (whether in cash or otherwise) to be offered in any month exceeds one thousand rupees; and in every prize competition, the number of entries shall not exceed two thousand.” This is the law and everything else in the act is in relation to this section.
The next section, (5) basically states the same excepts it gives an option for licensing under the law of this act. Section 6 states the four steps or processes to obtain a license: application, approval by licensing authority, if refused a statement why is required, and fees to obtain a license. Section 8 is the power to cancel or suspend licensing and lists two factors.
Section 9-12 each deal with penalties for breaking certain aspects of the Prize competition act. It goes through personal penalties all the way into corporate penalties and defines the wordage and punishment for each offense. Section 13-14 deals with rights that licensing authorities have, inspection and search and seizure. The 15th section deals with newspapers and how they need to obtain a license to print any prize competition. Sections 16-19 deals with legal aspects: appeals, licensing authority, jurisdictions and protection of action. Section 20 is the power to make rules. It gives the states the right to make rules to carry out the act and produce licensing if they chose to do so.
State Of Bombay Vs. R.M.D. Chamarbaugwala
This case passed the Bombay lotteries and Prize Competition Control and Tax (Amendment) Act which redefined the definition for prize competition. The question that arose was: Is the law related to betting and gambling or does it deal with trade and commerce? The Supreme Court ruled that the law was intended for prize competitions and lawmakers never intended to include gambling. The petitioners therefor had no right under the constitution to impose a penalty for violating the Prize Competition Act.
There have been multiple amendments since the Prize Competition Act first passed in 1955 and at least 5 within the last 18 years. Even with the definition amendment to include the word “figures” it is still not implied to gambling or online gambling in any way. The amendments have made the Act stronger over the years and closed some legal loopholes but today it is still intended to regulate and control prize competitions and nothing else.
The Prize Competition Act of 1955 is strong India gambling law that covers a lot of ground when it comes to prizes rewarded from competition based entertainment media such as puzzles, number games, picture games or any game that delivers a prize from friendly competition. The Act gives states the authority to change laws making it even stronger and amendable for future changes that take place on a world scale. When this Act was first enacted into law there was no such thing as the internet. Today there is a better understanding of this law and how it doesn’t apply to traditional gambling, India has enough laws on that matter already.
Is the Prize Competition Act of 1955 a national law still in effect today?
Yes, the law has been amended several times over and was put into effect by the Government of India.
Does the Prize Competition Act affect the lottery?
It does. This Act bans a lottery on a national level, but section 20 allows for states to make their own laws, so some states have now elected to have a state ran lottery system. This law was used to combat illegal lottery systems throughout India.
Does the Prize Competition Act of 1955 outlaw online gambling?
No, it has been ruled upon that the law is not intended for gambling, only prize competitions. India legal online casinos are still available to play and wager on.
Does the Prize Competition Act of 1955 outlaw online loot boxes?
No, since a loot box is online there should be no concern of breaking the law. No where in the Act or its amendments does it refer to online services.
If I win a prize at work for winning a crossword puzzle can I be arrested?
Technically, if the prize exceeds 1,000 rupees it is illegal under this Act, but unless it is a huge payout, or the state government sees it as a persistent problem, you shouldn’t have anything to worry about.
What forms of online betting are currently legal in India?
Currently all forms of offshore online betting are legal including: India sports betting, India legal online poker, India legal mobile casinos, and online racebooks, as long as the destinations are operating outside of Filipino borders, are legally sanctioned, are subject to legitimate regulatory oversight and possess the appropriate licensing and credentials.