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”)ix 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. The implementation of the TN Act was, however, in abeyance, given that there were some pending challenges to the constitutionality of the legislation. After lengthy hearings, the Madras High Court upheld the validity of the TN Act in the case of All India Gaming Federation v. State of Tamil Nadu & Others.

The landscape is evolving, and legal clarity may soon follow but until then, online gambling in India remains a risky bet. Recognizing the growth of online gaming, the jeetwin india central government has started taking steps toward regulation. In 2023, the Ministry of Electronics and IT released draft rules for online gaming platforms under the IT Act. These rules require companies to register with a self-regulatory body and introduce grievance redressal mechanisms. However, the enforcement landscape remains inconsistent, with authorities primarily targeting unlicensed operators and those involved in fraudulent activities.

State Laws and Regulations

While gambling laws in India are primarily governed by federal legislation, individual states possess the authority to enact their own regulations. Indirect tax in India is levied as a Goods and Services Tax (“GST”), which is leviable on all activities that are covered within the scope of the term “supply” and is levied either on the supply of goods or on the supply of services. In terms of recent amendments (which came into effect on 1 October 2023), GST at the rate of 28% is to be levied on the amount deposited with the supplier at the entry stage, which is taxed as supply of actionable claims in online money gaming and casinos (taxed as supply of goods). Foreign real-money gaming operators have to mandatorily register themselves through a simplified registration process to discharge their GST obligations. Tax authorities under GST laws are now empowered to block the platforms of non-compliant foreign operators. The future of online gambling in India hinges on the government’s ability to strike a balance between regulation and prohibition.

Relevant Authorities and Legislation

xiv      As mentioned above in endnote 3 above, fantasy sports conducted over an online medium (in the current structure of having a buy-in and users thereafter expecting monetary rewards based on their performance) run the risk of being construed as an online money game. In this regard, it is key to note that several sports betting platforms in India are structuring their services in a subscription/ad-based revenue model and removing requirements for a buy-in completely to avoid falling within the definition of an online money game. While there is no specific federal law addressing online gambling, certain states like Sikkim have legalized and regulated online gambling activities under state-specific legislation.

Understanding What is CFT Under KYC/AML Regulation…

Before diving into the legal aspects, let’s briefly understand what online casino games entail. Online casinos offer a wide range of games such as slots, blackjack, roulette, poker, and more. These games simulate traditional casino experiences and are accessible through websites or mobile applications. Separately, there has also been a spate of public interest litigations (“PILs”) recently that seek directions from courts to instruct the state governments to act against online gaming and gambling (in some cases even against games of skill such as poker and rummy). Thus, even if the local authorities had no appetite for enforcement, such litigations force them to act.

• The Court directed the Delhi, Karnataka and Madhya Pradesh High Courts to transfer their complete records, and any similar challenges pending before other High Courts would also stand transferred.
• Casino products (including table games, live dealer and slots) fall within the category of “games preponderantly of chance” and therefore would be hit by the prohibitions under most State Gaming Laws.
• These games simulate traditional casino experiences and are accessible through websites or mobile applications.
• In November 2024, the Competition Commission of India (CCI) initiated an investigation into Google’s policies regarding real-money gaming apps.
• As stated in the table above, most formats of bingo may fall either in the category of lotteries or games of chance.

Cryptocurrency Law in India: Current Legal Status …

Licensed operators, particularly those operating in states like Sikkim, continue to offer online gambling services within the framework of state regulations. The lack of clear legislation concerning online gambling has led to various interpretations and court rulings that have shaped the legal landscape. While some legal experts argue that online gambling falls under the purview of the Public Gambling Act and is therefore illegal, others contend that the law does not apply to online activities. In case of the New Act, imprisonment and fines are prescribed in the event of contravention of any of its provisions relating to online money games.

Legal Interpretations and Court Rulings

Lotteries have been expressly excluded from the purview of the State Gaming Laws and are regulated by central laws and certain state-level lottery laws (collectively, “Lottery Laws”). Private lotteries, except those permitted under a duly granted licence by the state government, are banned under the Bhartiya Nyaya Sanhita, 2023 (“BNS”). The contents of the corresponding cell apply except the points on Nagaland and Rajasthan, which apply to online fantasy sports platforms only. On the other side, states like Arunachal Pradesh passed prohibition acts in 2012, while Andhra Pradesh and Telangana imposed strict bans on all online gambling in 2020.

Online Gambling

Your one-stop destination for legal news, articles, queries, and a directory of lawyers in India – all under one roof at ApniLaw. Players must be aware of their tax obligations, as failure to report winnings or avoid paying taxes could invite penalties. xx Given that the rules are only in the draft stage, and are pending stakeholder feedback and corresponding changes, we have refrained from commenting on the rules at this stage. Please note that the precise impact of the taxation structure will depend on the business/gaming model. In addition to the content in the corresponding cell, states such as Punjab, Kerala, Maharashtra, et al. allow only physical lotteries.

Meanwhile, casino-style gambling and foreign betting platforms largely remain outside the scope of regulation or legality. Even if a platform is legal in your state, any income from online gambling is taxable under Indian law. Under the Income Tax Act, gambling winnings are taxed at a flat rate of 30%, with no deductions allowed. Licensed operators, particularly those operating in states with clear regulations like Sikkim, continue to offer online gambling services within the framework of state laws. Yes, there have been recent legislative initiatives and enforcement actions aimed at addressing online gambling in India. Some states have introduced bills to regulate online gambling, while law enforcement agencies have cracked down on illegal gambling operators.

Several offshore gambling sites have been banned this way, but enforcement remains challenging. Many of these foreign-based apps continue to target Indian players using alternate domains or mirror sites. The lack of jurisdiction over international platforms makes regulation tougher, raising questions about user safety and legal accountability.

The TN Act and the TN Regulations were again challenged in a fresh round of litigation in Play Games 24×7 Private Limited & Ors. V. State of Tamil Nadu & Ors., where the Madras High Court once again upheld the constitutional validity of the TN Act and the TN Regulations. The Court reaffirmed that the aforementioned judgment had already settled the validity of the Act, and held that the State of Tamil Nadu had the legislative competence to regulate online real-money gaming. Enforcement mechanisms under the New Act include mandatory blocking of content or services in the event of non-compliance with the provisions of the New Act, searches of physical and digital premises without a warrant, and access to devices or accounts.

Similarly, under the Nagaland Rules, there are certain social responsibility requirements that the operators must follow when offering games of skill in the state – for instance, games for stakes can only be played by those above the age of 18 years. Except in the states of Sikkim and Nagaland, which regulate skill gaming through a licensing regime, the skill variants of poker are not expressly prohibited under any other State Gaming Law. In Nagaland, the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 (“Nagaland Act”) identifies poker as a skill game and requires an operator to procure a licence for offering it. The state of Sikkim in the north-east of India, 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. Online casinos in India are prohibited, while all other gambling regulations vary across states. But don’t worry – our legal experts have provided a simple overview and insights into the latest laws.