Anson defines wager in following words, A promise to give money or money’s worth upon the determination or containment of an uncertain event; the consideration for such a promise is either something given by the other party to abide the event or upon the event determining in a particular way.
“The essence of gaming and wagering is that one party is to win and other is to lose upon a future event, which at the time of contract is of an uncertain nature – that is to say, if an event turns out one way A will lose, but if it turns out the other way he will win.” Thacker vs. Hardy (1878)4, B.D. 685. At common law in England wagers were enforceable, unless it would have been contrary to public policy to enforce them, but now wagers were rendered void by the Gaming Act 1845, S.18 provides that no action should be brought to recover any money or thing won upon a wager.
Stating essentials of wagering contract, the Apex Court has held in Firm Partap Chand Nopaji Vs. Firm of Kotrike, AIR 1975, SC 1223, “in a wagering contract there has to be mutuality in the sense that the gain of the one party would be the loss of the other on the happening of the uncertain event which is the subject matter as a wager, speculation does not necessarily involve a contract by way off wager and to constitute such a contract, a common intention to wager is essential.”
Essential ingredients of a wager are
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Parties to agreement should have opposite views about an uncertain event. A wager may relate to present, past or future event.
(b) Mutual chances of gain or loss to the parties:
Another essential ingredient of wager is the chances of gain or loss to the parties. If the facts are such either of the parties may win but cannot lose, or may lose but cannot win then that cannot be a wagering agreement.
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Babasaheb vs. Rajaram, (AIR 1931, Bom 264). In this case two wrestlers agreed to play a wrestling match on the condition that if any of the party failed to appear on the day fixed then that would forfeit Rs. 500 to opposite party and the winner would receive Rs. 1,125 from the gate money. Thus both the charges were to be recovered from the gate money. One of the wrestler failed to appear and the other sued him for agreed amount. Defendant contended that the agreement was a wagering agreement therefore it was void.
The court held that the agreement was not a wager, because it had been lacking the essential ingredient of mutual chances of gain or loss. Here both the parties might win but could not lose because the money had to be paid from the gate money provided by the public not from the pockets of any of the parties.