Essentials And Types of Wagering Contract


1) It must be enthusiastic about an uncertain event – For an agreement to be a wagering agreement, it is necessary that the topic matter of the agreement must be addicted to an uncertain event. In the case of Jethmal Madanlal Jokotia v. Nevatia & Co (1962), it had been held that although a wager is mostly a few future events, it is going to even be of a happening that happened within the past, but the parties were not attentive to its result or the time of its happening. 

2) There’s a mutual chance of gain or loss – Therefore it is not a wager when one party features a chance of winning but not losing or an opportunity of losing but not winning or neither winning nor losing. In the case of Narayana Ayyangar v. Vallachami Ambalam (1927), It was purposefully held that a discount fund cannot be termed as a ‘wager’ because although some members have an opportunity to achieve, yet none of them have an opportunity to lose because the recovery of the number contributed is assured whether the period is unknown.

Illustration – A match is on the point of start in Delhi between India and Australia, If India wins over Australia, Pallav agrees to pay Nishant Rs. 2000, whereas if Australia wins the match, Nishant agrees to pay Rs. 2000 to Pallav. This is a wagering agreement since both parties have an opportunity to win or lose.

3) None of the parties must have a definitive control of the event- that is to say If one in every of the parties has the facility to influence the results of the wager, the agreement will lack an important ingredient of a wager as said within the case of Dayabhai Tribhovandas v Lakshmichand(1885). Illustration Shivani and Munish enter into an agreement that if Shivani resigns from her job, Munish pays Rs. 20000 to Shivani and Shivani pays Rs. 20000 to Munish if she does not resign from her job. Here Shivani has control over her resignation and thus will not constitute a wager.

4) Must have not any other interest aside from the stake i.e.- If either of the parties has another interest aside from the quantity at stake, it will not constitute a wager.

Illustration – Jay insures his car against any damage by taking an automobile insurance policy and pays a premium for the identical. Here we can say that Jay has an interest within the car and just in case of the long run uncertain event i.e., an accident he will not gain anything. Therefore, it is not a wager. 

Types of Wager

I. Money line Betting: This type of betting is one amongst the simplest varieties of betting. Betting through the money line is incredibly simple because it is finished only on sports competitions and games and it is totally based upon the outcome/result of the match. This sort of betting is unlawful, and this kind of activity has been mostly seen in cricket to the very best within the Indian Premier League.

II. Spread Betting: This type of wager/ betting takes place where the one that is placing the wager the foremost favored team playing within the match to win the match by a particular margin or on the team which is thought to be the underdog for it to win or perhaps if it loses then with a close margin.

III. Over Betting: This type of betting is completed within the game where the higher places his wager the full number score or total of goals scored by both the teams through a mix of the certain number, and which is completely a futuristic event uncertain, and no-one has control over it. IV. Under Betting: This type of betting takes place when the higher places his game the condition that the mixture of the entire number of goals and points that are scored by both the teams are less or under a particular limit. This sort of wager is additionally associated with the ultimate outcome of the sport.

IV. Prop Betting: This type of betting is extremely unique and artistic in nature because it is not associated with the ultimate results of the sport. During this case, the higher places his wager something just like the half of the sport or like whether there will be an excellent over during a cricket game etc. thus, this can be also referred to as prop betting.

Exceptions to wagers

1) Insurance Contracts – An insurance contract may be a contract of indemnity which is employed to safeguard the interest of one party against damage and has a stake. A wagering contract, on the opposite hand, may be a contract and has no interest within the happening or non-happening of an occurrence. Unlike Insurance contracts, wagering agreements are void in nature and therefore the object of a wagering contract is to take a position for money or money’s worth, whereas the article of an insurance contract is to shield an interest.

2) Competitions involving skill – Skill competitions do not seem to be said to be wagers since the winning of such events requires a considerable amount of skill and do not seem to be obsessed on the probability of an uncertain event. For example, crossword puzzles, sports competitions etc. But if the competition relies on chance and not skill as an example a lottery it’d amount to a wager and thus be void. In the case of Moore v. Elphick (1945) it absolutely was held that wherever skill plays a serious part within the results of the competition and therefore the results are awarded in line with the merits of the answer, it is not a lottery and so not a wager.

3) Racing competitions – Some state governments may authorize racing and therefore the contribution for the reward of such competitions of amounts quite Rs 500 is not considered unlawful. In the case of K. R. Lakshmanan v. State of Tamil Nadu (1996), the Supreme Court had held that racing was a game of skill and playing for stakes during a game of skill was not illegal.

4) Share Market Transactions – The purchase and sale of stocks with the mere intention to present and take delivery of shares do not amount to a wager except if the sole intention is to settle the worth difference. Therein case, it will be called a wager.


A lot of inconvenience is faced by the judiciary while addressing what exactly constitutes a wager and what comes within the ambit of wagers since the Indian Contract Act, 1872 does not define what constitutes a wager. Section 30 only mentions that everyone wagering agreement shall be void and enforceable leaving its interpretation subject to plenty of ambiguity. Therefore, the definition of the term wager should be amended, and the scope of this section be widened.

Aditya Mehrotra
Hello Everyone, this is Aditya. I am a First year B.A.LL.B. student from Symbiosis Law School, Pune. Being a firm believer of the Pt. Nehru's quote, "Facts are Facts and will not disappear on account of your likes", My aptitude for Law and Journalism is witness to the basic fact that you will find me in the library reading my favorite Legal Books, my favorite being 'The Courtroom Genius' by Nani Palkhivala. I chose Law as my career because I was inspired by the likes of Lawyers like Nani Palkhivala and Ram Jethmalani. I always wanted to contribute to the field of Social Work through Legal means and Emancipation of the Poor. My oratory skills won various accolades both at regional and global level. In my opinion dream does not become reality through magic; it takes sweat, determination, and hard work.