Full Brief on the Laws of Gambling in Pakistan

This is a two part series. First we discuss gambling in Pakistan, then we move to Pakistan and “Online” Gambling in Part II.

In Pakistan we have strict anti-gambling law. Gambling is also unlawful in Shariah. Despite this, it is estimated the gambling mafia profits (PKR) Rs. 14 crore ($1.43 million USD) annually by accepting cricket bets from Pakistani people. Because we know of many sites such as www.Bet365.com that are highly used among Pakistanis (most don’t talk about it). We are fully aware cricket betting accumulates much larger figures because online wagers are difficult – if not impossible to track. This is before mentioning prize bonds, card games, dice games, roulette and other sports.

In this article I’ll start by discussing how this activity seeped into our culture and address the current laws. I also provide details of how our people deposit and wager with online betting sites, and speculate on the future of gambling in our nation.

Horse Racing and Prize Bonds Lead to Cricket Betting

Pakistan had never embraced any form of legal gambling until tote betting on horse racing was legalised in 1979. This was such an unlikely event. Only in 1930 were we established as a separate Islamic majority state. Only in 1956 we gained full independence becoming the Islamic Republic of Pakistan. Though we had a more democratic constitution in 1973 we took Islam as our national religion as part of that constitution. To legalise horse betting was to rejection of the Sunnah, or so many thought.

Horse racing is now explained in most every book on Islamic law. The Holy Quran explains that gambling is an evil activity of Arab society, and Arabs used horse racing for gambling. However, because breeding a good horse is required for defence and other purposes, horse racing is allowed. The Holy Prophet (peace be upon him) made horse racing lawful when a third party (Mohallil) is added. This means if funds are put up as a prize, and at least one competitor has the chance to win that prize (without he himself gambling) then this is lawful. Although this can still be debated, horse race betting is allowed in the Islamic Republic of Iran based on the same interpretation.

Prize Bonds Popularised in 1981

Shortly after horse racing was legalised, prize bonds became popular. These existed prior but took their current form in 1981. This is not actually gambling. This involves bearer instrument bonds. These pay no interest. Instead, a drawing is held quarterly for a prize. Today there are many prize bonds available including Savings Account (SA), Pensioner’s Benefit Account (PBA), Special Savings Account (SSA), Student Welfare Bond (SWB), etc.

Again, these pay no interest but rather provided a chance at a prize. First place prizes are very large. For many, this is only legal chance at becoming wealthy overnight. The available denominations and sizes of the prizes are shown in the table.

There are many Pakistan laws regarding prize bonds. They were first mentioned in the The Public Debt Act, 1944 but with far more details in the Public Debt Rules, 1946. There were also rules published in 1981 before all was redrafted in the Prize Bond Rules, 1999 (no English copy available). The latter has been amended many times. There is also a 10% income tax withholding on prizes as specified under the Income Tax Ordinance (ITO) of Pakistan, 2001 – Section 156(1) Division III of part V. To learn more about the laws of the land regarding prize bonds see: Pakistan Prize Bond FAQ by State Bank Pakistan.

Although legal under local law such activity is not halal. It is not permissible to purchase these bonds because they include both interest and gambling. The money spent on prize bonds is a loan because no person would purchase these for business as no interest is paid. There is however interest – instead of giving it to one person, it is given to the winner of a lottery draw. The fact this is gambling has not stopped much of Pakistan from participating; prize bonds are very popular here.

Betting Races and Sports Start

Though unlawful in Shariah, with horse race betting and prize bonds legal under the laws of Pakistan it didn’t take long for cricket betting to become popular too. This started with bookmakers that were available trackside at races. It was in 1991 that Lahore bookies began offering betting in rupee to the general public. When this happened, they also began booking cricket bets for the crime syndicates in Mumbai who controlled the odds.

Match Fixing an Immediate Concern

During the 1980’s, the general public used an Asian betting syndicate in London to place bets on Pakistan horse races. It was believed during this period many horse races were fixed. It wasn’t long before similar allegations came to cricket.

In 1994 three players from Australian cricket claimed Pakistan’s captain Saleem Malik offered them bribes to fix a match. He was initially suspended but then found innocent and was allowed to continue his career. He would play his last Test match in January 1999 ending his career in disgrace. He was banned in May 2000 as a result of the Justice Qayyam’s inquiry into cricket match fixing where Shane Warne was amongst the players to testify that Saleem Malik attempted to fix the 1994-1995 Test.