Online Gaming Laws In India

• Gaming Market In India
• Online Gaming License In India
• Online Gaming Companies In India
• Online Gambling Laws In India
• Gaming Industry In India
• Is Online Gaming Legal

Online Gaming/Gambling laws in India prohibit betting or wagering and any act which is intended to aid or facilitate the same. Gaming/Gambling being a State subject, gaming/gambling in India have laws which differ from state to state . This would mean what is permitted in one State may be an offence in another. The Public Gambling Act, 1867, is the central enactment on the subject, which has been adopted by certain states of India like Uttar Pradesh, Punjab, Madhya Pradesh etc. The other States have enacted their own legislation to regulate gaming / gambling in India activities within its territory. It is to be noted that State Legislations have been enacted prior to the advent of virtual / online gambling in India and therefore references of gaming/gambling in India, in respective state legislatures are in relation to physical premises only, barring Sikkim and Nagaland which are the only States who have introduced regulations pertaining the online gaming.

After this law was introduced Sikkim has continued to actively seek out partners for their online gambling licenses. Here is the text of the law from cis-india.org. Public Gambling Act of 1867. The first laws against gambling in India went into effect on 25 January 1867 in what is known as the Public Gambling. Gambling is a state subject, and only states in India are entitled to formulate laws for gambling activities within their respective states. The Public Gambling Act of 1867 is a central law that prohibits running or being in charge of a public gambling house. The penalty for breaking this law is a fine of ₹ 200 or imprisonment of up to 3 months. Online gaming with stakes or real money is allowed in most of the states of India. Therefore, unless specifically prohibited by the state government, it is not prohibited. Online games with stakes/ real money cannot be played in whole of India as the laws of the states of Assam, Odisha and southern State of Telangana specifically prohibit. There is a law in India that says it is illegal to fund online gambling sites without using Rupees. This law is called the Foreign Exchange Management Act. If you are to place a bet at an online bookmaker or gaming site you need to do so in Rupees. Indian Legal Landscape Of Online Gaming. Gaming sector comprises of 2 significant parts – online skill-based games (casually or socially) and gambling. Gambling activities are simply referred to as Gaming in the eyes of Indian laws. Betting and gambling have been included as subject-matter for legislation under 7th schedule of Indian.

After going through the State gambling laws for online gambling in India, it is found that, except the State of Orissa and Assam, most of the States have excluded ‘games of skill’ from applicability of its respective gaming/gambling laws. Further, playing certain games including ‘Poker’, both online and offline, is permitted under the laws of West Bengal, Nagaland and Sikkim subject to licence from the appropriate State Authorities. But this would be applicable only in the territorial limits of the respective State. In Goa, gambling is permitted only in Government permitted places operated as casinos.

The issue of online gambling in India laws in India still remains a grey area which is yet to be adjudicated by Courts of India. Having said that, necessary inferences can be drawn from orders passed by the Court while deciding the issue of whether a particular game is a ‘game of skill’ or a ‘game of chance’. But the issue of whether a ‘game of chance’, if played like a sport without stakes amount to gambling or not? still remains largely undecided.

Game of Skill v. Game of Chance:

There has been a substantial discussion by Supreme Court and High Court on what constitutes a ‘game of skill’ and a ‘game of chance’. What is adduced from the judgments is that a game where there is preponderance of skill over chance is a ‘game of skill’ and vice-versa.

By taking the above ratio into account, SC in the matter of State of AP v. K.Satyanarayana(1968) held the game of Rummy to be a ‘game of skill’. However, the Court in its judgment has indicated that if there is gambling or if the gambling house is making profit from the game of rummy, then it could amount to an offense under the laws of AP. It was further observed by SC that the three card game which goes under different names such as flush, brag, etc. is a game of pure chance. This was relied upon by SC in another its other judgments viz. M.J.Sivani v. State of Karnataka (1995) and Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr (1996).

The issue of whether rummy if played with stakes amounts to gambling or not has not been decided by Supreme Court. However, Andra Pradesh High Court in D. Krishna Kumar And Anr. vs State Of A.P.(2002) (Annexure-2) relying upon the SC decision of 1968 held that till such time the state gambling Act is amended to lay down that playing Rummy with stakes is 'gaming', playing Rummy with stakes is not 'gaming' within the meaning of the Act and is therefore allowed.

Delhi District Court: Gaussian Network Pvt. Ltd. Vs. Monica Lakhanpal

The issue of Online Gaming/gambling laws in India was discussed in detailed in the above case when the issue was put up before the Court under Order 36 Rule(1) of CPC by the parties. The Court held the following:

• Game of skills, if played with stakes does not amount to gambling;
• Playing games of skill for money is only legal in the real form, online games cannot be compared to real games;
• Attracting business or enticing players by alluring them with prize money is illegal;
• Gaming sites partaking a slice on the winning hand are illegal as they amount to a virtual gambling house.

Having said that, the said ruling was rendered infructuous as during the final arguments in the Revision petition, parties sought to withdraw the petition. So the effect being there is no ruling which can be treated as a precedent as regards online gambling.

Gujarat High Court on Poker:

The issue whether Poker is a ‘game of skill’ or a ‘game of chance’ was never discussed in detail by any Court in India until the recent decision/order dated December 4, 2017 passed by Gujrat High Court in Dominance Games Pvt. Ltd. V. State of Gujarat, wherein, the said issue was extensively pondered upon. The Court in its said decision held that Poker is a ‘game of chance’ and therefore amounts to gambling under Gujarat Prevention of Gambling Act, 1887. While arriving at the aforesaid decision, the Court inter alia observed the following:

• That the game of poker originated from ‘flush’ or ‘Indian teenpatti’ which has been observed by SC as a game of chance in its 1968 judgment and consequently, as a corollary, the game of poker is also to be construed as a game of chance;
• The game of poker involves a process wherein the players have no control or say on the cards received by them and the final outcome is based on mere luck or chance depending upon how the cards are received by the player. Poker face to bet, would be a part of bluffing or deception and the so-called strategy, cannot be considered as a skill. The outcome also depends on the ability of a player to spend money and how deep are his pockets. It is a game of deceiving, bluffing and duping other players;
• The game of Rummy is different than Poker. While poker involves betting or wagering, rummy has nothing to do with stakes and betting or wagering is not essential to the game of rummy;
• The Court while noting the ills of gambling and impact of gambling on the moral fibre of society noted that ‘one must not overlook the ground realities in India or the country like India, where the majority of the population is struggling for the basic necessity and there is lack of awareness amongst the people and if they are permitted by betting in the craze of easy money, they do not know what to do if the things go wrong.’

Mr. K.N Suresh, Secretary of Indian Poker Association has filed an appeal against the said order, being Letters Patent Appeal No. 2625 of 2017 before the Division Bench of Gujarat High Court. The bench after hearing the matter briefly on December 28, 2017 issued notice to the state government and other respondents, and till date the matter is not heard finally. Having said that, since no ad-interim/interim reliefs are granted presently, the Single Judge order stands valid and enforceable.

Though the order does not specifically make any observation on Poker, if played as a sport and/or without stakes, however, while differentiating between rummy and poker, the Hon’ble Court at para 60 of the said order makes a presumption that wagering or betting is an inseparable part of the game of poker and therefore would involve stake. The Court while holding Poker to be a ‘game of chance’ has also predominantly relied upon moral religious and social grounds. In the absence of the said order being overruled and the issue being addressed specifically, the game of poker, even if played as a sport and/or without stakes remains a grey area which is then left at the discretion of police authorities.

POSITION:

Though the issue of Poker was considered by Gujarat High Court in view of the provisions of Gujarat Prevention of Gambling Act, 1887, in arriving at the decision of Poker being a ‘game of chance’, the court made several observations like how the game is played, origin of the game, reference to ancient Indian literature, moral and religious grounds, etc. which may be applied by other states/state machinery having similar gambling laws. The issue is likely to be clarified by Division Bench of Gujarat High Court, once the appeal is finally heard.

In view of the above, it is clear that if a game is considered to be a ‘game of chance’ under the state laws and rulings by the Courts and is played with stakes, would constitute gambling under the respective state laws with exception pertaining to a few states as mentioned above. If an entity is able to show that a particular online game or a particular on-ground gaming activity has preponderance of skill over chance and/or is played as a sport without stakes, it may fall within the exception of gaming/gambling under the state gambling laws. It is pertinent to note however that if online gaming is illegal in any State, the promotion of the same in such State would amount to violation of ASCI Code as well as Cable TV Network Regulation Act, 1994.

For any Criminal Law related matter, please Post Your Requirement anonymously and get free proposals OR find the Best Criminal Law Lawyers and book a free appointment directly.

Online gambling is allowed throughout most of India, but it’s not fully regulated in most states.

Sikkim is actively pursuing a regulated online gambling framework, and three other states have prohibited gambling online.

Those three states are Telangana, Andhra Pradesh, and Maharashtra. While online gambling is deemed illegal, no one has been charged with any offenses to date.

Gambling is a state-level governance issue in India, so the legality of various betting and gaming activities depends on which state you are in. However, there are a few federal laws that also affect gambling, both online and in-person.

We explain all about India’s gambling legislation on this page. Let’s start by looking at the big picture of India gambling laws.

Federal Gambling Legislation in India

There are three federal laws in India that affect gambling, but only one is about the act of gambling itself.

The other two laws affect online gambling because they govern online financial transactions.

Here is more information about each of these federal laws.

The most prominent of the federal gambling laws in India is the Public Gambling Act.

When the Public Gambling Act was passed, it only applied to the ten states that were still under British control at that time. Today, it applies to any state that does not have its own casino and betting laws.

According to the Public Gambling Act, it is illegal to operate a gambling house or be present inside one. The act goes on to define a gambling house and acts of gaming.

However, there was a notable exception. Section 12 of the Public Gambling Act states that skill-based games are not considered gambling.

Unfortunately, the definition of a skill-based game is equally unclear. Several court cases have been brought before India’s court system to determine whether a specific game is considered a game of skill or chance.

In Dr. R. K. Lakshmanan v. State of Tamil Nadu [AIR 1996 SC 1153], India’s Supreme Court ruled that the predominant factor, either chance or skill, will determine whether a game counts as gambling.

That court case determined that horse racing is a skill-based game, so India betting laws allow for legal horse race betting throughout the country.

It is surprising that the Supreme Court ruled that the predominant factor can determine whether a game is based on skill or chance. That seems to contradict India’s Constitution, which defines gambling as follows.

Gaming Market In India

An earlier case (State of Andhra Pradesh v K. Satyanarayana and Ors [AIR 1968 SC 825]) ruled that rummy is also a game of skill.

There have been a few amendments to the Public Gambling Act in more recent years. In 1970, the definition of gaming was updated to include “wagering or betting but does not include a lottery.”

After continued confusion about the legality of lotteries, India passed the Lotteries Regulation Act in 1998.

This federal law gave states the right to create their own lottery regulations. The only rule is that lottery drawings cannot occur more than once per week.

Because the Public Gambling Act got passed in 1867, it was enacted long before internet gambling was even a figment of the imagination.

There are no references to online gambling, and it is unclear whether online casino sites would be considered a gambling house under India gambling laws.

Another federal law that affects the legality of online gambling in India is the Foreign Exchange Management Act (FEMA), which got passed in 1999. It is a financial act that centers around international trade and currency exchange.

Most of the Foreign Exchange Management Act does not apply to individual people or is unrelated to gambling. So, we will only focus on the one part that does apply to legal online gambling in India.

If you deposit money into an online gambling account in a currency other than Indian rupees, that could be considered an illegal way of exchanging currency.

Online gambling sites have two options that help customers enjoy their services without violating FEMA.

The first option is to accept transactions in rupees. But, accepting the currency does not force you to process transactions with it.

So, online casinos and betting sites may use geolocation software to determine your location. They can restrict transactions that begin in India so that they can only be conducted in rupees.

That option works, but it adds unnecessary work for both the site and the gamblers.

Most online gambling websites choose the second option, which is to advise gamblers from India to use electronic wallet payments instead of credit or debit cards.

If you are gambling online in India, you may have limited access to banking methods. That is because of the Foreign Exchange Management Act.

Keep that in mind when you are looking for an online casino or betting site.

The last of the Indian gambling laws at the federal level is the Information Technology Act of 2000. It is a broad law that applies to almost any type of online activity.

There is nothing in the Information Technology Act that implies that online gambling in India is illegal. In fact, the law does not even mention gambling in particular.

However, there is a provision that gives the Indian government the right to block foreign websites as it deems necessary.

The government can require internet service providers to block access to certain websites, and it has already done so for some online gambling sites.

It is not clear why specific sites have been blocked or if they will become available again.

You will want to be aware of this possibility when you are gambling online in India, especially if you are using an unlicensed site.

India Gambling Laws By State

State online gambling laws supersede federal gambling laws in India. If you are in a state that does not have any gambling legislation, the Public Gambling Act will apply.

Those of you who happen to be in one of these states will have different betting and gaming legislation that you should know about.

Most gambling laws prohibit either prohibit the activity entirely or regulate and legalize gambling. The Nagaland Prohibition of Gambling Act takes a different approach to online gambling in India.

It prohibits all online gambling where chance outweighs skill. But it offers licenses to companies that want to offer online games of skill, including poker and rummy.

The act is even more interesting because it is a licensing act. Nagaland’s Finance Commissioner oversees licensing, and according to the law, any corporation in India can apply for a license.

That is particularly interesting because it implies that a corporation that receives a license from Nagaland would be able to legally offer its services to other states in India.

However, the law does stipulate that those corporations cannot operate in a state that explicitly outlaws games of skill.

Both the corporation and its technology servers must be located in India to qualify for a skill-based gaming license from Nagaland.

Foreign operators that already offer online casinos or poker sites do not meet those requirements, so they will not get approved for a Nagaland gaming license.

Another stipulation also specifies that corporations that offer games of chance are not eligible for the skill-based gaming license. So, online casino operators do not qualify for a license unless they only offer poker.

Nagaland’s Gambling Act is unique, and it could be an excellent way to bring regulated poker to India.

However, there are so many foreign operators that already provide poker to India’s players without a license.

These companies are unwilling to give up their casino games to qualify for a license, mainly because they have been allowed to operate without one.

Sikkim is one of the most progressive states in India as far as gambling legislation is concerned. The state has legalized brick-and-mortar casinos and created a regulated online gambling industry.

In 2008, Sikkim passed its casino licensing act, and the state’s first land-based casino opened in 2009. By 2010, they started accepting applications for three online casino licenses.

The state’s location affected their decision to create a casino industry. Sikkim is a small state that is located in the northern part of India between Nepal and Bhutan.

Before 2009, many Indian gamblers traveled through Sikkim to get to casinos in Nepal. The state wanted to keep that revenue in the country, so they authorized land-based casinos in five-star hotels.

Adding two land-based hotel-casinos was an excellent way to support Sikkim’s tourism industry. The state is popular with travelers who come to see the beautiful Himalayan mountains.

Sikkim authorized online gambling beginning in 2010. Several casino operators applied for a license, including William Hill and Betfair.

Three of those companies received a provisional license that would allow them to start operating online casinos as soon as they paid their fees. Ten additional companies received letters of intent.

However, none of these companies ever launched a casino website in Sikkim. The one online gambling site in Sikkim is PlayWin, which only offers online lottery sales.

They may have decided it wasn’t worth competing with illegal bookmakers. Still, the most probable reason is that Sikkim’s small population was not lucrative enough to justify the cost of the licensing fees and taxes.

When the Sikkim Casinos Act was initially passed, it included language that implied that licensed casino operators would be able to offer their services throughout India,

The federal government stepped in and informed Sikkim’s officials that they did not have the authority to authorize legal gambling in India as a whole.

Online Gaming License In India

Once those casino operators realized that their customers would be limited to the 619,000 people living in Sikkim, they knew that they would probably not get enough players to make their efforts profitable.

Another state that legalized land-based casinos in five-star hotels is Goa. It is a small state on the Western coast of India and is popular with beach travelers who want to visit the Arabian Sea.

Goa wanted to increase tourism revenue in the early 2000s, and their first step was to pass casino laws. The first land-based casino opened in 1999, and for a while, it seemed like the state would only allow one casino to operate.

In 2007, the state’s government announced that it would create several more casino licenses. Today, there are eight casinos on land and five casino cruises that operate on the Mandovi River.

All of Goa’s casinos charge an entry fee, ranging from 700 rupees up to 6000 rupees. Some casinos charge the same entry fee all the time, while others raise the price on weekends or during peak seasons.

The entry fees cover the cost of unlimited alcoholic beverages and food at most casinos. Some casinos offer a voucher worth 500 or 1000 rupees to use on any of their games.

A few states have prohibited online gambling within their borders. Telangana was the first state to pass such a law in 2017. Andhra Pradesh and Tamil Nadi both followed in 2020.

There was a specific incident in Andhra Pradesh that prompted lawmakers to prohibit online gambling.

A young man committed suicide because of stress related to unpaid debts that he had accrued while gambling online.

After that incident, the state government decided that online gambling was too dangerous because it attracted a younger crowd of gamblers. They passed their law prohibiting it in September 2020.

The laws in all three of these states are remarkably similar. They all make it illegal to gamble online in almost any form, including sports betting, lottery sales, and even rummy.

If you get caught gambling online in any of these states, you could face up to six months in jail and a 5,000 rupee fine for your first offense. The consequences can go as high as two years in jail and 10,000 rupees for operators and repeat offenders.

It is challenging for law enforcement to enforce online gambling laws. They do not have the tools and resources to track everyone’s activity on the computer and smartphone all the time.

Andhra Pradesh is attempting to get around this issue by convincing the Indian government to act on the Information Technology Act.

Online Gaming Companies In India

They have asked the government to shut down more than 132 betting sites by forcing internet service providers to block these websites in the state.

If you happen to live in Telangana, Andhra Pradesh, or Tamil Nadu, you may want to exercise caution when using online gambling sites.

But it seems clear that the government officials are more interested in punishing the casino operators and internet service providers than individual players.

The federal and state gambling laws in India that we have looked at already focus on casino games, in particular. However, the definition in the Public Gambling Act of 1867 also includes sports wagering.

There are two main exceptions to India’s gambling laws.

Horse racing is legal throughout India, and there are several live racetracks throughout the country. It is legal to bet on these races, and they have on-site bookmakers available. They also have off-track betting facilities.

Betting on horse races is legal in India because it is considered a game of skill. The Public Gambling Act of 1867 exempts skill-based games from the definition of gambling.

Another form of legal gambling in India is the lottery. The Lotteries Regulation Act of 1998 gave each state the right to authorize lotteries if they choose to. There are some rules, including a once-per-week limit for draw games.

Horse race betting and lotteries are the only two legal forms of gambling in India. All casino games fall under the Public Gambling Act.

Many people wonder if it is legal to use online gambling sites that operate in countries outside of India.

There are dozens of online casinos and sports betting sites that accept bets from players in India.

Most of these sites are licensed and regulated in other countries, so they are operated legally.

Players do need to be mindful of processing financial transactions with foreign sites. You need to handle all transactions in rupees instead of a foreign currency or use an electronic wallet instead.

If an online casino accepts credit card deposits in a different currency, they would be violating India’s Foreign Exchange laws.

Anyone in India can access and use these sites. However, three states have explicitly prohibited online gambling.

You could potentially face criminal charges in these states, but the government is more focused on pressing charges against the operators than individual players.

As long as you are aware of the potential risks and the foreign currency laws, you should be able to continue using overseas gambling sites without concern.

History of Gambling Laws in India

India is certainly not as significant as gambling destinations like Las Vegas and Macau. The country’s modern gambling industry is disappointing compared to what you can find in those cities.

But that was not always the case. Some of the earliest records of gambling come from India, and some of the games we are familiar with originated there.

The Vedic religion, a precursor of modern-day Hinduism, dominated India for centuries. Two prophets realized that the wisdom of the Vedas was not accessible for ordinary people.

They created two ancient Sanskrit texts, known as The Ramayana and The Mahabharata. Both of these epic stories contain some of the earliest known references to gambling.

The Ramayana refers to games of chances, including gambling boards and dice games. These references are believed to date back to 7300 B.C.E., and scholars believe the boards were used to play an early version of chess.

The first examples of a gambling tax were also created around the same time. Indian kings and officials enforced gambling house rules so that the patrons would be willing to pay these taxes.

In the 18^th century, the British colonizers brought cricket to India, and it quickly became one of the most popular sports in the country. The rise of cricket also increased the interest in sports betting options.

Britain soon realized that gambling was rampant in India. They attempted to control it by creating the Public Gambling Act in 1867.

That law continues to govern gambling in India as a whole, but the Constitution also gave states the right to create their own laws for betting and gaming.

Here is a timeline of gambling legislation in India.

Online Gambling Laws In India

If you live in India, or you are planning a vacation there, you need to know how India gambling laws will affect your opportunities.

Gaming Industry In India

There are plenty of land-based casino options in Goa, and two more casinos are available in Sikkim. If playing casino games is a significant part of your vacation plans, you should choose one of these two tourist destinations to visit.

When you can’t make it to one of those land-based casinos, you can gamble online. Using an overseas online casino or betting site is safer than interacting with a black market bookmaker.

Is Online Gaming Legal

There are a few states that prohibit online gambling. If you are in one of those states, you should be aware of the potential risks of using one of those sites. You may want to consult with an attorney to be sure.

Your best option for a wide variety of gambling options, including casino games and sports betting, is to use one of the online sites we recommended