Wagering Agreements

Indian

Contract Act

does not define wagering agreement.

we have to look for its meaning elsewhere.
Wager is a promise to give money or moneys
worth upon the determination or ascertainment
of an uncertain event.
[Ref: Sir William Anson]

Meaning
Wagering is - staking something of value
- upon the result of some future
uncertain event
or - upon the ascertainment of the truth
about some past or present event.

The essence of wagering is that

- one party is to win and other to lose
- upon a future event which
- at the time of contract is
- of an uncertain nature.
The uncertain future event
if turns out one way
A will lose B will win
but if it turns out the other way,
A will win B will lose.
So, wagering agreements always result in
one party wining
and other party losing.

- Each party may under it either win or lose

- whether he will win or lose being dependent
on the issue of the event and therefore
remaining uncertain until, that issue is known
If either of the parties
- may win but cannot lose,

or - may lose but cannot win

then it is not a wagering
contract
The important points to be noted here are that
- there should be equal chances of gain or
loss
to the parties, and

- it should be regarding an uncertain event.

Essentials of wagering agreement:

1. Uncertain event:
Uncertainty in the minds of the parties
about the determination of the event in
one way or other - is necessary.

- A wager generally contemplates a

- future event;
- But it may even relate to
- an event happened in the past,
- In the later case, the parties are not
aware of
- its result, or
- the time of its happening

2. Equal chances of gain or loss to the parties:

- if there are no mutual chances of
gain or loss, there is no wager.
- each party should stand to win or lose
- It should be dependent on chance
If winning or losing is completely based on
skill there will be no wager.
3. Neither party should have control over the
happening of the event - one way or the other:
- If one of the parties has the event in his own
hands - the transaction lacks the essential
ingredient of wager.

4. Neither party should have any interest - in the

happening of the event OR - in the subject matter,
except the sum or stake he will win or lose.
LEGALITY OF WAGER
Agreements by way of wager are void:
- No suit shall be brought

[Sec -30]

- for recovering anything alleged to be

won on any wager
or- for recovering anything alleged to be
entrusted to any person to abide by
result of any game or other uncertain
event - on which any wager is made.

A wagering contract is struck with

invalidity at the outset, i.e. before
the event contemplated by the
wager has occurred
[Ref: Hill v. William Hill (park lane) Ltd: All ER
452[1949].
A wagering contract is void
but not illegal.
Contract collateral to a wagering
contract

Exceptions to the Rule

Exception in favour of certain
prizes for Horse racing
Any subscription or contribution, or
agreement to subscribe or contribute,
made or entered into
for or toward any
plate, prize or sum of money,
of
the value or amount of five hundred rupees or
upwards,
to be awarded to the
winner or winners of any
Horse race shall not be unlawful. [Sec-30]
Section 294-A of the Indian Penal Code not affected
Nothing in this section shall be deemed to legalize any
transaction connected with horse racing, to which the provisions
of section 294-A of the Indian Penal Code apply.

Lotteries.
Even the state sponsored lotteries have the
- same element of chance
- with no skill involved in it.
Hence, Lotteries come under wagering contracts as the
very nature of agreement has not changed .
Thus Lotteries, whether sponsored by
- state
or - private enterprise - be void.
If - chance does not play a role, and
- victory is completely dependent on skill.
Then the competition is not a lottery.
Otherwise it is.
[In B.R Enterprises V. State of U.P. SC ]

Some instances of Wager

- Horse race, - betting, - gambling ,

- lotteries,
- in trading, including
stock markets, where people trade in
speculation without intention to buy
or sell but only interested in
receiving the difference in price
.etc are some of the examples of
wagering agreements.
Whether - Gaming at a Casino,
amounts to an activity in the

Crossword competitions

If - chance does not play a role, and

- victory is completely dependent on skill.
Then the competition is not a lottery.
Crossword puzzles and such other competitions
where
knowledge and skill
is recognised and awarded
are not in the nature of wager.

Whether the most popular TV program Koun Banega

Carorpathi come under wagering contracts? Give reasons.

 These agreements differ from other forms of

contracts in the sense that there is no quid
pro quo, i.e. mutual exchange of some thing
between parties.
What is the Principle or Purpose behind
- treating an agreement by way of wager
as void?
The law discourages people to enter into
- games of chance and
- make earning by trying luck
- instead of spending their time, energy and
labour - for more fruitful and useful work
- for themselves, their family and society.