Rolling the Dice: Understanding the Landscape of Online Gaming Law in India

When Entertainment Meets Regulation

Online gaming in India has grown from a casual pastime into a multi-billion-dollar industry almost overnight. Whether it’s fantasy cricket leagues, mobile card games, skill-based puzzles, or e-sports tournaments, millions of Indians are gaming online every day—and some are even earning from it.

But as the sector expands, so do the legal questions: Is it legal to earn money through gaming apps? Is fantasy sports betting or gambling? What about games of skill versus games of chance? And most importantly—who’s regulating it all?

The answers, as it turns out, aren’t as straightforward as one might hope. That’s because online gaming law in India sits in a strange legal grey area—split between central regulation, state-specific gambling laws, and evolving court decisions.

In this article, we’ll take a closer look at how the legal framework around online gaming in India is structured, what recent developments have occurred, and what it means for gamers, developers, and investors alike.

 

The Legal Foundations: Skill vs. Chance

At the heart of gaming regulation in India lies a fundamental legal distinction: games of skill are generally permitted, while games of chance fall under the category of gambling—and are heavily restricted or banned in many states.

This classification originates from the Public Gambling Act of 1867, a colonial-era law that predates not just the internet, but even radio. While outdated, it still forms the backbone of gambling law in many Indian states, unless they've passed their own specific legislation.

The law prohibits operating or visiting gambling houses but makes an exception for “games of mere skill.” Over the years, Indian courts have interpreted this to mean that games where skill dominates over luck (such as chess or rummy) are legal, while games heavily reliant on chance (like roulette or slot machines) are not.

So where does online gaming fall?

That depends on the type of game, the amount of money involved, and—crucially—which state you're playing in.

 

The Regulatory Patchwork: A State-by-State Affair

One of the most confusing things about online gaming law in India is that it isn't governed by a single nationwide policy. Instead, different Indian states have the power to make their own rules around gambling and betting.

Some examples:

  • Tamil Nadu, Andhra Pradesh, and Telangana have enacted laws banning online games involving monetary stakes, even if they are skill-based.
  • Sikkim and Nagaland have taken a more liberal approach, even issuing licenses for certain types of online games.
  • Kerala temporarily banned online rummy and later had its decision overturned in court.
  • Maharashtra, one of the largest gaming markets, continues to rely on outdated legislation but is considering fresh reforms.

As a result, a game that is perfectly legal in one state may be considered illegal in another—putting both users and operators in a legally uncertain position.

 

The Central Government Steps In

Recognizing the growing popularity—and complexity—of online gaming, the central government finally stepped into the picture in 2023 with a more coordinated regulatory approach.

The Ministry of Electronics and Information Technology (MeitY) was appointed as the nodal agency to oversee online gaming in India. It introduced amendments to the IT Rules, 2021, to regulate online gaming intermediaries and platforms offering real-money games.

Here’s what changed:

  • Mandatory self-regulatory bodies (SRBs): Online gaming platforms must register with self-regulatory bodies approved by the government.
  • Know Your Customer (KYC) requirements: Platforms must verify users using Aadhaar or other government-approved IDs.
  • Parental controls and age gating: To protect minors from exposure to real-money gaming.
  • Addiction and risk warnings: Platforms are required to display alerts and offer time or spending limits.
  • Ban on betting and wagering: Games that involve betting on outcomes are prohibited—irrespective of skill.

This move by the central government has started to bring some much-needed structure to what was previously a Wild West environment.

 

Real-Money Gaming: The Legal Tightrope

Perhaps the most debated aspect of online gaming law in India is real-money gaming—where users pay an entry fee or stake and stand to win money or rewards.

This includes platforms offering:

  • Fantasy sports leagues (e.g., Dream11, MPL)
  • Rummy and poker
  • Online ludo, chess, or other skill-based games
  • E-sports with prize pools

While courts have ruled that fantasy sports and rummy can be games of skill, the inclusion of money makes them vulnerable to scrutiny. This is especially true in states that classify any game involving monetary risk as gambling—regardless of skill.

In fact, many real-money platforms now geo-block users in certain states to avoid legal violations. Operators have to constantly monitor state-wise regulations and update their policies accordingly.

 

Recent Court Rulings: A Mixed Bag

The Indian judiciary has played a crucial role in shaping how online games are interpreted under the law.

In 2021, the Madras High Court struck down a Tamil Nadu law that banned online games like rummy and poker played for stakes, calling it unconstitutional. The court reaffirmed that rummy was a game of skill and that banning it outright infringed on the right to profession and trade.

The Supreme Court, too, has weighed in—observing that fantasy sports like Dream11 involve a substantial degree of skill and are not akin to betting. However, it has also left the door open for states to impose restrictions, especially when public interest or consumer protection is at stake.

This has created a strange situation: courts uphold the legality of many online games, but states can still restrict them based on local socio-political factors.

 

The Taxman Enters the Chat: GST on Online Gaming

Beyond legality, taxation is another hot-button issue.

In July 2023, the Goods and Services Tax (GST) Council decided to levy a flat 28% GST on the full value of bets placed on online gaming platforms, not just on the platform's commission or margin.

This decision created ripples in the industry. Companies argued it would make the business model unsustainable, raise costs for players, and push users toward illegal or offshore platforms.

While the government maintains that the move is aimed at curbing addiction and protecting consumers, operators worry that it could damage one of India’s most promising digital sectors.

 

What Lies Ahead?

There’s no denying that online gaming in India is at a crossroads. The government is taking steps to regulate the sector more coherently, but there’s still a long way to go.

A comprehensive Online Gaming Bill that balances innovation with consumer protection could bring real clarity. Until then, companies and players must navigate a minefield of state restrictions, central guidelines, taxation hurdles, and judicial interpretations.

Developers and entrepreneurs need legal support more than ever—whether to draft terms of service, respond to bans, or challenge ambiguous laws in court. Users, too, must stay informed about what’s legal where they live, especially when money is involved.

 

Final Thoughts: Play Smart, Play Safe

India is poised to become one of the largest online gaming markets in the world. But for that to happen, it needs a legal ecosystem that rewards innovation while protecting users.

Whether you’re a gamer, an investor, or a startup founder, understanding online gaming law in India isn’t just a legal curiosity—it’s a necessity.

The rules are changing. The stakes are rising. And the game is far from over.

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