Wagering agreements are simply conventional betting agreements because the word “wager” literally means “a bet.” Wagering agreements are betting agreements that are indicated to be lost or won on the outcome of a disputed matter.
Wagering agreements are void under Section 30 of the Indian Contract Act, which states that “agreements by means of wager are void.” The term ‘wager’ is not defined in this section. “Agreements by way of wager are void; and no suit shall be instituted for retrieving anything said to have been gained on any wager, or committed to any person to endure the result of any game or other doubtful event on which any wager is made,” according to Section 30.
Ingredients of Section 30:
- Mutual prospects of gain and loss
There must be two parties, or sides, with mutual chances of gain and loss, i.e., one party will win and the other will lose when the event is determined. ‘If one of the parties holds the event in his own hands, the transaction lacks a crucial aspect of the wager.’ It is essential to the wager that each party has a possibility to win or lose based on the uncertain or undetermined outcome on which the chance or risk is placed.
- There are two parties involved.
There must be two people, each of whom has the ability to win or lose.
‘….you can’t gamble on two groups or sides at the same time. You can have a multipartite agreement to contribute to a sweepstake (which may be illegal as a lottery if the winner is determined by skill), but you can’t have a multipartite agreement for a bet unless the many parties are divided into two sides, one of which wins or loses depending on whether an uncertain event occurs.’
- Uncertain Situation
Uncertainty regarding the outcome of the event in one way or another is required in the minds of the parties. A wager usually refers to a future event, but it may also refer to an event that occurred in the past but the parties were unaware of the outcome or the timing of its occurrence.
The first need for wagering is that the fulfillment of the contract must be contingent on the outcome of an unknown event. A wager usually refers to future occurrences, but it may also refer to an event that occurred in the past but about which the participants are unaware of the outcome or the time of occurrence.
- Other than the share, there is no other interest.
Neither party should be interested in the outcome of the event other than the amount of money or stake that he or she will win or lose. To be considered a wager, the parties must consider the outcome of the uncertain event to be the only condition of their agreement. The stake must be the parties’ only vested interest in the contract.
- Neither party should be in charge of the situation.
Finally, neither party should be able to influence the outcome of the event in any manner. “The transaction lacks an important feature of a wager if one of the parties holds the event in his hands.”