India's Online Gaming & Gambling: Fragmented State Laws, Skill Vs. Chance Debates, And Emerging Federal Restrictions
- IJLLR Journal
- 5 days ago
- 2 min read
Vasantha Sai Sree Vardhan Yadav, School of Law, Christ (deemed to be University)
ABSTRACT
India's gambling and online gaming market is marked by considerable complexity and a fragmented regulatory environment, primarily due to the Constitution granting individual states the authority to legislate on betting and gambling. Historically, the legal landscape has been shaped by a crucial distinction between "games of skill" and "games of chance". Games of skill, such as rummy, poker, fantasy sports, and horse racing, have often received judicial and legislative protection, while games of chance are largely prohibited or strictly regulated as gambling. This has led to diverse state- specific laws, with land-based casinos permitted in only a few states and union territories like Goa, Sikkim, and Daman & Diu. Similarly, online gaming regulation for skill-based games and sports betting is legal and regulated in specific states such as Nagaland and Sikkim. Government-run lotteries operate under a federal act but are organized by individual states, with 13 states permitting them.
The regulatory framework is currently undergoing significant evolution at the federal level. New online gaming rules were introduced in April 2023, followed by a controversial 28% Goods and Services Tax (GST) on online gaming, casinos, and horse racing in October 2023, which has substantially impacted operators' costs. A major development is the Promotion and Regulation of Online Gaming Bill, 2025, which was approved by the Lok Sabha in August 2025. This landmark legislation introduces a strict federal prohibition on online money-based and betting games, their advertising, and related financial transactions, effectively discarding the traditional skill vs. chance distinction for games involving monetary stakes. The Bill establishes a central regulatory authority and aims to promote e-sports and social gaming. While this represents a move towards greater clarity, it also poses considerable challenges and legal uncertainties for operators, who must navigate stringent penalties, high taxation, and a patchwork of state and emerging federal laws, despite the immense potential of India's large, tech- savvy population and rapidly growing digital economy. The industry continues to advocate for a more unified federal framework to address these cross-state regulatory complexities.
Keywords: Gambling Laws India, Online Gaming Regulation, Skill vs. Chance, Federal Gaming Prohibition, State-level Gambling
