Online Gambling Debts – How to Deal With the Causes and Effects of Online Gambling Debts

One thing there is no shortage of on the internet is opportunities to gamble. We are spoilt for choice, whether your fancy is for betting on sports, playing virtual card games or bingo. One of the things that makes internet gambling so potentially dangerous is that it is easily available for 24 hours a day. The real danger comes when you combine this factor with the fact that it is so easy to feel detached from the reality of money spent online. Gradually racking up a debt online does not feel the same as handing over hard earned cash from our wallet, so it is that much easier to lose track of how your online spending is mounting up.

For these reasons, debt problems from internet gambling are on the increase. In this article I hope to clarify some of the legal issues around online gambling, as well as providing some advice on dealing with the underlying problem and the debts that result from it.

Legal Issues Around Gambling Debts

When we talk about debt from online gambling it is important to be clear about the nature of the debt, because who the money is owed to does make a difference. People are often unsure about the legality of debts from online gambling. In the UK you can gamble legally on credit and incur a debt, but this debt is not then enforceable through the law.

However, there is an important point to make here, which is that this only applies when you are using credit extended by the company offering the gambling (casino, bookie, etc). If you use a credit card company to pay for internet gambling, that is a legally enforceable debt the same as it would be in any other circumstance, because you have borrowed money from the credit card company, not the casino. It is now against the law in the US to use a credit card to pay for online gambling.

You will find that many credit cards will regard a payment to an internet gambling website as a cash advance. This is then clearly borrowing money from the card company and the debt you incur can be pursued through legal action. If you do use a credit card to pay for online gambling this way, you should be aware that cash advances on credit cards are almost always charged at a much higher rate of interest than normal credit for purchases.

How To Deal With Debts Caused By Gambling

In dealing with gambling debts, there are two separate issues to tackle. One is the debt itself, and the other is the habit of gambling that led to the debt. Even if the debt is dealt with, it is likely to build up again if the root cause is not tackled too. Let us first consider the problem of paying off the debt.

The principles for tackling debt are nearly always the same, irrespective of the causes of the debt. To permanently deal with debt you should not be considering borrowing more money or paying anyone to deal with your debt for you. These courses of action are likely to deepen your debt in the long run.

With a little advice, you can deal with your debts yourself, by contacting your creditors and agreeing terms for repayment that you can afford. There is clearly more to it than that, but it is beyond the scope of this particular article. The process is straightforward and allows you to take back control of your finances.

Factors Leading To Internet Gambling Debts

It may help to have an understanding of why some people can become addicted to online gambling. The following are often contributory factors:

Gambling can be thrilling, leading to an adrenalin rush and feelings that we want to recreate time and again.

Many addictive gamblers think that they can win money and that this will solve all their other problems. It actually just leads to more problems by creating debt, which can then make it seem even more important to win the money, creating a vicious circle.

Addiction to gambling can actually be a mental disorder, which can lead to a compulsive need to gamble.

Being addicted to online gambling is often associated with other personal difficulties, including depression and stress.

Online Gambling Debts – The Warning Signs You may have a problem if you can answer yes to any of the following questions:

When you are not gambling, do you think about gambling and how you are going to get back to it?

Have you ever missed work because of online gambling?

Do you feel the need to gamble again after winning or losing?

Is the length of time you spend on gambling getting longer and have you ever spent longer online than you thought you had?

Are you secretive about your gambling with family or friends and do you dislike other people bringing it up?

Practical Steps To Tackle Online Gambling Addiction If you think you may have a problem with online gambling, here are a few simple steps you can take to begin to reduce or stop the habit:

Be open with friends and family and seek help with the problem.

Cancel any accounts you have with websites for online gambling.

Consider using software that blocks your access to online gambling websites.

Online Gambling

Internet Casinos Inc. (ICI), the world’s first online casino, started operating from August 18, 1995, with 18 different games. Since then more than 1,400 websites, mostly domiciled in small Caribbean islands, have given rise to an industry that grosses over $3 billion a year. In fact no business on the Internet earns more revenue than online gambling. Out of the estimated 14.5 million online gamblers, almost 30 per cent are from Asia.

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.

The law relating to online gambling in India needs to be understood within the country’s socio-cultural context. At the outset, gambling, although not absolutely prohibited in India, does not receive express encouragement by policy makers. The Indian organized gambling industry is estimated to be worth around US$8 billion. While stringent laws have checked the proliferation of casinos and high street gaming centres as in many other countries, barring the state of Goa, the lottery business remains the most post popular form of gambling.

Though gambling is not illegal, it is a highly controlled and regulated activity. Modern India is a quasi-federal Constitutional democracy and the powers to legislate are distributed at the federal as well as the state levels. Gambling features in List II of the Constitution of India, this implies that the state governments have the authority to enact laws in order to regulate gambling in the respective states. Thus, there is no single law governing gambling in the entire country. Different states have different laws governing gambling in addition to the laws that have an application across the country. While some states have banned lotteries, other states allow state government lotteries marketed and distributed in other lottery playing and promoting states through private entities.

Regulation of gambling

The courts have defined gambling as ‘the payment of a price for a chance to win a prize’. The dominant element of skill or chance shall determine the nature of the game. A game may be deemed to be gambling if the element of chance or luck predominates in deciding its outcome. As a result, Indian courts have held that betting on horse racing and a few card games are not gambling. The right to undertake the business of gambling and lotteries is not considered as a fundamental right protected by the Constitution of India. It may however be pointed out that the state government run lotteries make significant contributions to the state exchequer of several state governments and the Union government, and hence there is a resistance to complete prohibition.

The following legislation is pertinent to gambling:

The Public Gaming Act, 1867

This Act provides punishment for public gambling and for keeping of a ‘common gaming house’. This Act also authorises the state governments to enact laws to regulate public gambling in their respective jurisdictions. The penal legislations in respective states have been amended in accordance with their policy on gambling. However, this legislation does not have any direct impact on online gambling unless a wide interpretation is given to the definition of common gaming house so as to include virtual forums as well.

The Indian Contract Act, 1872 (ICA)

The ICA is a codified umbrella legislation that governs all commercial contracts in India. Under the ICA, a wagering contract is the one which cannot be enforced. The Act lays down; ‘Agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide by the result of any game or other uncertain event on which any wager is made’. Gambling, lottery and prize games have held to be wagering contracts and thus void and unenforceable. While a wagering contract is not illegal, it cannot be enforced in a court of law. Thus, the courts will not entertain any cause of action that arises out of a wagering contract.

Lotteries (Regulation) Act, 1998

This Act provides a framework for organizing lotteries in the country. Under this Act, the state governments have been authorized to promote as well as prohibit lotteries within their territorial jurisdiction. This Act also provides for the manner in which the lotteries are to be conducted and prescribes punishment in case of breach of its provision. Lotteries not authorized by the state have been made an offence under the Indian Penal Code. Several non-lottery playing states, like Gujarat and Uttar Pradesh, have prohibited the sale of other state-government lotteries under this Act.

Indian Penal Code, 1860

Section 294A deals with keeping lottery office. It says that whoever keeps any office or place for the purpose of drawing any lottery not being a State lottery or a lottery authorised by the State Government, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both.

And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.

Internet gambling

The law related to gambling is also applicable to online gambling. All gambling contracts are considered to be wagering contracts and it is not possible to enforce such contracts under the ICA, detailed above.

As pointed out earlier, the online lottery is the most popular form of internet gambling in India. Most companies marketing and distributing or conducting state government-sponsored lotteries through the internet are not allowed to sell their services in the states that banned lotteries. In most cases, these marketers and distributors limit their online services to consumers who are residents of the states where a lottery is permissible. Notwithstanding the fact there has been no reported case of breach by any company promoting online lotteries, most of these companies (as a safeguard) seek an undertaking from their consumers relating to their residence.

There have been instances where one state has banned the lottery of other states, including online lotteries. In a recent case, the Karnatka High Court upheld the decision of the Karnataka government to make itself a ‘lottery free zone’ by imposing a ban on lotteries of all other states, including online lotteries under the Lotteries (Regulation) Act 1998. The state government, in this case, directed the closure of the terminals and kiosks selling the online lotteries.

Enforcement over foreign jurisdictions

If the websites are hosted and operated from outside India, it may be difficult for the Indian authorities to issue any directive to close them down or prohibit their access without using its blocking powers under the ITA. The authorities have little to worry about, as Indian foreign exchange laws do not permit remittances outside India for gambling related activity, such as the purchase of lottery tickets, football pools and sweepstakes. As a result, a gambling website hosted outside India aiming at receiving money from within India cannot do so through legal channels.

Traditional Gambling Versus Online Gambling

An Overview

Gambling nowadays is not related to a mere recreation activity albeit it has now taken a new direction into business and industry. For some it’s a pleasure activity and for the others it is a lucrative business. Although gambling is not at all a new sport which has emerged in this century, it has been a favorite of our ancestors and the historians date back the involvement into this activity to prehistoric times. It has been factually proved that even the early caveman was a gambler.

Gambling to a layman would mean sport involving money and an easy way to multiply the same. Although being a part f this sport means staking of one thing or the other. History has witnessed several incidents where not only wealth and material objects were a part of this game but also one’s own identity or the ownership of a family member was staked.

Gambling activity in this century has taken a two dimensional outlook. With high paced lives and scarcity of time for almost everything, even recreation activities are time bound. To this new age life, Internet comfortably snuggles in and creates a position of its own, thus giving room to Online Gambling. As compared to traditional gambling practices where one has to be physically available in the arena of casino, online gambling gives us the comfort of gambling in the privacy of our homes or café.

To further elaborate on both the categories of gambling lets have a closer look into the basic features of both. Traditional gambling basically has three types of games involved namely the table games, random games and gaming machines. Almost all the categories in traditional gambling requires parting with physical cash and getting them converted into chips which are of various denominations and are then further used in the game. The only division of game which does not require conversion of cash into chips is that of slot machines. Here the gambler has to place a quarter into the slot machine and pull on the lever. There are still some games where cash is deposited, but that is mainly confined to games which involve huge jackpots. Generally in such games the basic deposit only sums up to a huge amounts.

Online gambling, on the other hand, is a relatively comfortable way of enjoying the game. Needless to say the reason for its manifold popularity goes to the time factor and the availability of pleasure at the click of a button. Moreover, in order to attract more and more people into online gambling the owners make their sites tempting by offering various payback schemes and added advantages to its members. All sorts of games can be selected by just logging on the website. Basically the games available in this form of gambling can be broadly divided into two categories, one in which a particular software needs to be downloaded and the other which can be played without it as well.

Comparative Analysis of Traditional Gambling and Online Gambling

Although online gambling is gaining momentum, traditional gambling is still the undisputed leader in the business. There are pros and cons in both forms of gambling and it depends upon the personal liking of each gambler as to which form suits his or her requirement.

In traditional gambling where one can find the adrenaline rising and pressure on one’s nerves, the same is a miss in online gambling to some extent. The pleasure of winning and celebrating can be only enjoyed in the traditional gambling. The drive behind playing it again and again lies in winning and celebrating, thus giving instant boost in business of the casino owners. Winning of one motivates thousands others to remain in the game. Thus if we see the involvement, pleasure and financial aspect of gambling, no doubt traditional gambling would take a lead into it.

Online gambling, on the other hand, suits one and all to the extent of people residing in remote areas where availability of an actual casino is a miss. All it requires is a basic internet connection and you are into the pleasure of the sport. It gives you the leverage of time and space. Another advantage of online gambling can be that one can enjoy huge payouts and bonuses, but along with it the companies keep a catch of not paying the entire earned amount in order to make the gambler play for long. The reason for making a player gamble for longer durations is that generally the longer you play the chances of you losing increase, thereby making the casino owners reap higher profit margins.

In terms of business traditional gambling is favorable to the casino owners. They have all the tools and tactics available to make a gambler play and stay for long which in turn means that the odds increase in the favour of casino owners. But for a gambler, traditional form of gambling may be of loss at times as the earnings are lesser than the actual amount earned. Generally the payouts are in terms of 5 or 6 times the actual amount put at stake but the casinos pay out lesser and so results in visible loss.

Conclusion

Gambling in the eyes of gambler has its own dimensions which cannot be gauged by the critics. Form of gambling may have difference of opinions but the ultimate pleasure of sport cannot be undermined in either form of gambling.

On the other hand gambling as a line of business may mean totally different to the casino owners. They would have an altogether different stream of thoughts to analyze the two forms of gambling.

To sum up, both the forms of gambling have their own set of advantages and disadvantages and none of it can be said to be perfect. It totally depends upon the individual to choose from the options available which can satiate his or her desire.

The only common thing in both the streams is to set up individual limits and to keep his or her decisive powers strong so as to know when to draw the line.