KTB Law Offices Online gaming laws India 2025
The Public Gambling Act, 1867 (“Public Gambling Act”), a colonial-era statute still in force, has been adopted by several states including Uttar Pradesh, Madhya Pradesh, and Punjab & Haryana, with some states making their state amendments to it too. Other states have enacted their own pieces of legislation to regulate gaming/gambling activities within their territories under their State Gaming Laws. Most of these are broadly modelled on the Public Gambling Act, albeit with suitable modifications. The content in the corresponding cell applies except the point on Nagaland, which would only apply to online games. The contents of the corresponding cell apply except the points on Nagaland and Rajasthan, which apply to online fantasy sports platforms only. Under the State Gaming Laws, the respective state governments regulate betting on physical horse races.
Games of Skill vs Chance India: The Legal Litmus Test
- However, the matter escalated to the Bombay High Court, which, in June 2021, issued notice to the State of Maharashtra to consider whether the game’s reliance on dice rolls rendered it a game of chance.
- Games of skill require mental acuity, strategy, or experience—like rummy or chess—and are generally allowed.
- To tackle addiction, the Education Ministry has issued advisories to parents and teachers, while the Information and Broadcasting Ministry has directed TV channels to ensure that gaming ads carry disclaimers warning about financial risks and possible addiction.
- The states of Telangana and Andhra Pradesh in the recent past amended their respective State Gaming Laws by either diluting or removing the express exemption provided to skill games and imposed a blanket prohibition on all games played for stakes, including skill games and online games.
The magistrate dismissed the complaint, recognizing the role of user strategy in gameplay. However, the matter escalated to the Bombay High Court, which, in June 2021, issued notice to the State of Maharashtra to consider whether the game’s reliance on dice rolls rendered it a game of chance. While no final ruling has been issued yet, the case has sparked significant interest given the algorithmic structure of such apps and the potential for dice-driven randomness to outweigh user strategy.
Please note that the precise impact of the taxation structure will depend on the business/gaming model. Platforms must use geo-fencing and user declarations to avoid onboarding users from prohibited states. This signals a trend towards state-level regulators with expansive powers to audit, license, and penalize platforms. In case of the PMLA, contravention or non-compliance entails a monetary penalty of not less than INR 10,000 (approx. USD 119) but up to INR 1,00,000 (approx. USD 1,192) for each failure of the reporting entity to comply with its obligations under the PMLA. The respective authorities for Goa and Sikkim are the Home Department in Goa and the Tourism Department in Sikkim.
For poker played in casinos, please refer to the corresponding cell above on casino gaming. However, certain skill variants of poker (such as Texas Hold’em & Omaha Hold’em) are not hit by the prohibitions under the State Gaming Laws (see the corresponding row below on “Skill games”) and therefore these variants can be played on physical premises too. The Public Gambling Act 1867 predates the internet and primarily governs physical gambling establishments.
It also examines recent controversies, enforcement actions, and the shifting treatment of poker, Ludo, and binary prediction apps. With increasing penetration of cheap and high-speed mobile data and affordable smartphones, the gaming industry is seeing unprecedented growth. This has prompted governments to consider newer and stricter regulations and even blanket bans. A spate of litigations in courts have seen courts prod state governments to bring in compatible legislation for the evolving landscape of gaming in India. Though the Online Gaming Rules are on the statute books, the industry awaits their operationalisation. In the context of online gaming, states are gradually recognising the need for specific provisions to regulate the field and while some states of north-eastern India have preferred a licensing regime, some states of southern India have opted for bans.
From poker and rummy to fantasy cricket and slot games, there’s a wide spectrum of platforms being introduced. But unlike conventional tech products, gambling apps fall into a legally sensitive zone. Hence, developers must not only innovate but also navigate legal grey areas to ensure their apps remain operational and profitable. The High Courts of Punjab & Haryana, Bombay and Rajasthan, in different cases, have upheld the status of the fantasy sports format offered by leading operator Dream11 (as per the charter of industry body Federation of Indian Fantasy Sports) as a game of skill. Consequently, it was exempted from the prohibitions under the State Gaming Laws and was also protected as a legitimate business activity under the fundamental rights granted by the Constitution. Affirming this in a significant observation, the Supreme Court in Avinash Mehrotra v. State of Rajasthan held that the issue of legality of fantasy sports was no longer res integra as petitions challenging the legality have repeatedly been dismissed by the Supreme Court.
The Advertising Standards Council of India (“ASCI”), a self-regulatory body, has introduced a self-regulatory advertising codexi that applies to advertisements on cable/satellite television including gambling advertisements. Though the ASCI framework is self-regulatory, it has the ability to escalate non-compliant advertisements to the relevant government department or regulator for appropriate action. Recently, it was reported that ASCI had identified and escalated approximately 700 non-compliant betting and gambling advertisements to the MIB between April and August 2024. Though casual and nostalgic, when played for stakes, it raises questions of legality. The legality of Ludo as a real-money online game is currently under judicial examination. In a complaint filed before a metropolitan magistrate in Mumbai against the Ludo Supreme app, it was alleged that the game facilitated gambling by allowing users to stake money on dice-based outcomes.
Private lotteries, except those permitted under a duly granted licence by the state government, are banned under the Bhartiya Nyaya Sanhita, 2023 (“BNS”). Crucially, the Explanation clause clarifies that games featuring domestic or international competitions, and those in the nature of action, adventure, mystery, or virtual sports, shall also be treated as games of skill. However, rising concerns around addiction, underage access, and fraud prompted the government to introduce new frameworks under the Information Technology Rules. Lok Sabha Speaker Om Birla called the Bill “a necessary step” to address financial distress and suicides linked to online betting. The legislation reflects the government’s Digital Bharat vision – balancing innovation with social responsibility.
The state of Nagaland has a licensing regime for virtual sports fantasy league games under the Nagaland Act. Rajasthan in 2022 issued a draft bill, namely the Rajasthan Virtual Online Sports (Regulation) Bill 2022 (“Rajasthan Bill”), proposing to regulate fantasy sports in the state under a licensing regime, however the same is not in force yet. In Andhra Pradesh and Telangana, fantasy sports for stakes or winnings are prohibited. In 2023, the Ministry of Electronics and Information Technology (MeitY) released draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, specifically targeting online gaming. “Online real money games” are defined in Rule 2(qd) of the Rules, 2021, which defines the term as “an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit”. Further, “winnings” is explained to mean “any prize, in cash or kind, which is distributed or intended to be distributed to a user of an online game based on the performance of the user and in accordance with the rules of such online game”.
As lawmakers seek to https://bcgamedownloadandroid.com/ protect consumers while enabling innovation, developers will play a critical role in setting ethical standards. Integrating responsible gaming tools, limiting playtime for minors, and avoiding misleading advertising will help ensure a sustainable ecosystem. Before launching, perform a detailed analysis of the app’s structure, monetization model, and geographic targeting to ensure legal clarity. Most of the State Gaming Laws prescribe either a monetary fine and/or imprisonment for the offences mentioned in them. The states that have amended their State Gaming Laws to make them contemporary have much higher penalties as compared to those states where the original pre-internet statute is still unamended.
How Does This Contradict Previous Government Policy?
The ED alleged violations of the Public Gambling Act, FEMA, and PMLA, arguing that Probo facilitated disguised betting. This case signals increasing scrutiny of so-called “prediction markets” or disguised betting models. However, offline poker clubs remain vulnerable, particularly in states that have not formally legalized poker or lack licensing frameworks. Games of skill require mental acuity, strategy, or experience—like rummy or chess—and are generally allowed. Games of chance rely mostly on luck, such as roulette or lotteries, and are more likely to face legal restrictions in India.
In the absence of central legislation for online gaming, state laws and judicial interpretation continue to fill the void. However, the Central Government has notified amendments to the The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 in 2023 which have implications on online gaming, as discussed below in this article. “Mere skill” has been judicially interpreted to mean games preponderantly of skill.
The proposed framework aims to regulate real money gaming and wager-based gaming platforms, by introducing self-regulatory bodies, mandatory KYC, reporting of winnings, and safeguards for children. The objective, as stated in the PIB release, is to foster innovation while curbing addiction, fraud, and misinformation. While some states permit games of skill, others have banned both skill and chance-based games for stakes. We’ll explore central and state regulations, key acts like the Public Gambling Act 1867 India, the debate around games of skill vs chance India, and essential factors for Gambling app compliance India.
The state of Sikkim in the north-east of India, and the state of Goa in the west and the union territory of Daman and Diu in the west, regulate casino games in land-based form through state-specific laws. In Goa, Daman and Diu, casinos are regulated under the Goa, Daman and Diu Public Gambling Act, 1976 (“Goa Act”). Casinos in Sikkim are regulated under the Sikkim Casinos (Control and Tax) Act, 2002 (“Sikkim Casino Act”) (previously the Sikkim Electronic Entertainment Games (Control and Tax) Act, 2002). With over 500 million online gamers in India and rising investments in the sector, there is mounting pressure for a unified national policy on online gaming.
The current state-wise fragmentation hinders growth and creates legal uncertainty. This list is illustrative and not exhaustive, but it highlights the legislative recognition of genres that are commonly featured in esports, mobile gaming apps, and skill-gaming platforms. But since gambling is a state subject (Entry 34, List II, Seventh Schedule), individual states are free to adopt, amend, or enact their own gambling laws. While Maharashtra, Madhya Pradesh, and others follow the central Act, states like Telangana, Andhra Pradesh, and Nagaland have introduced distinct legislation with stricter or licensing-based regimes. Due to the federal legal structure, gambling legality depends on individual state laws.
Meghalaya: India’s First Comprehensive Gaming Law for Virtual & Online Formats
Developers need to implement geo-blocking and custom user policies based on the location of their users to remain compliant. In case of the BNS or the IRWA, the offences may be related to content of the games or its advertisements or violation of any prohibitions imposed by the BNS (such as the one on private lotteries). The key legislation governing the taxation of income in India is contained in the Income Tax Act, 1961 (“ITA”) and the rules, notifications and circulars issued thereunder. Under the ITA, a non-resident (including a foreign company) will be taxed in India on any income that accrues or arises in India or is deemed to accrue or arise in India or is received or deemed to be received in India.
In April 2023, the state government of Tamil Nadu implemented the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (“TN Act”)v to ban online gambling and real-money online games of chance in the state of Tamil Nadu. The TN Act prohibits online gambling (which has been defined as online wagering or betting and includes playing of any online game of chance with money or other stakes). The TN Act has also set up a Tamil Nadu Online Gaming Authority (“TNOGA”) for implementing some of its provisions. Though initially, the prohibitions under the TN Act extended to games of skill too if they satisfied the criteria under the statutory definition of “online game of chance”, a recent judgment by the regional High Court read down those provisions and limited them to games of chance only.
Also, the services provided through an online platform (over the internet), which are impossible to ensure in the absence of information technology, are covered within the scope of “online information and database access or retrieval services” (“OIDAR”) and include online gaming. The applicable GST on such services is 18% which is levied on the service fee/commission charged by the gaming operators. With over 750 million internet users and a massive youth population, mobile-first gambling apps are becoming increasingly popular. While this does not fall within the ambit of a “licence”, an OGI offering an “online real-money game” is required to obtain a verification from an SRB in order to offer its online game to users in India. For this, the OGI first needs to become a member of any SRB registered by the MeitY under the Online Gaming Rules, adhere to the due diligence and other obligations under the Online Gaming Rules, and submit its game format to the relevant committee of the SRB. The process that the SRB will follow to assess and verify the game format will depend on the charter and governing documents of the SRB.
However, it also noted that an appeal from the Bombay High Court judgment delivered in the case of Gurdeep Singh Sachar v. Union of India & Ors. The said appeal is still at a preliminary stage, with notices having been issued to the relevant parties and the effect of the impugned Bombay High Court judgment stayed. There are specific exemptions for games of skill under most State Gaming Laws and courts have also recognised offering of skill games as a legitimate business activity that is constitutionally protected. No licence is required for offering skill games in most states in India except Sikkim and Nagaland, which have licensing regimes for skill games under the respective Acts. Under the antiquated State Gaming Laws, the prohibitions of which are in relation to physical gaming houses, there has been constant enforcement action over time by the police and other law enforcement authorities in the respective states.
Some states have specific anti-gambling provisions in their police law (such as Karnataka and Tamil Nadu) and hence this gives the local authorities more reasons to be proactive in enforcement. The Supreme Court has held betting on horse racing to be a game of skill and consequently entitled to the skill games exemption under the State Gaming Laws. In addition, there is a specific exemption for betting on horse races in most State Gaming Laws too. If the betting is on games of chance, then it would attract the prohibitions under the State Gaming Laws.
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