Gaming Law India 2023

CHAMBERS GLOBAL PRACTICE GUIDES
Gaming Law
2023
Definitive global law guides offering
comparative analysis from top-ranked lawyers
India: Law & practice and Trends & Developments

Gowree Gokhale, Tanisha Khanna
and Rhythm Vijayvargiya
Nishith Desai Associates
INDIA Pakistan
Nepal
Delhi
China
Bangladesh
India Myanmar
Law and Practice

Sri Lanka
Contributed by:
Gowree Gokhale, Tanisha Khanna and Rhythm Vijayvargiya
Contents
1. Introduction p.5
1.1 Current Outlook and Recent Changes p.5
2. Jurisdictional Overview p.10

2.1 Online p.10
2.2 Land-Based p.14
3. Legislative Framework p.15

3.1 Key Legislation p.15
3.2 Definition of Gambling p.17
3.3 Definition of Land-Based Gambling p.17
3.4 Definition of Online Gambling p.17
3.5 Key Offences p.17
3.6 Penalties for Unlawful Gambling p.18
3.7 Recent or Forthcoming Legislative Changes p.18
4. Licensing and Regulatory Framework p.18

4.1 Regulatory Authority p.18
4.2 Regulatory Approach p.19
4.3 Recent or Forthcoming Changes p.19
4.4 Types of Licences p.19
4.5 Availability of Licences p.21
4.6 Duration of Licences p.21
4.7 Application Requirements p.21
4.8 Application Timing p.22
4.9 Application Fees p.23
4.10 Ongoing Annual Fees p.24
5. Land-Based Gambling p.24

5.1 Premises Licensing p.24
6. Online Gambling p.25

6.1 B2C Licences p.25
6.2 B2B Licences (Suppliers, Software, Etc) p.25
6.3 Affiliates p.25
6.4 White Labels p.25
6.6 Technical Measures p.25
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INDIA CONTENTS
7. Responsible Gambling (RG), Also Known as Safer Gambling (SG) p.25

7.1 RG Requirements p.25
7.3 Gambling Management Tools p.26
8. Anti-money Laundering (AML) p.26

8.1 AML Legislation p.26
8.3 AML Requirements p.27
9. Advertising p.27
9.1 Regulatory/Supervisory Agency p.27
9.2 Definition of Advertising p.27
9.3 Key Legal, Regulatory and Licensing Provisions p.27
9.4 Restrictions on Advertising p.28
9.5 Sanctions/Penalties p.30
10. Acquisitions and Changes of Control p.31

10.1 Disclosure Requirements p.31
10.2 Change of Corporate Control Triggers p.31
10.3 Passive Investors Requirements p.31
11. Enforcement p.31

11.1 Powers p.31
11.2 Sanctions p.31
11.3 Financial Penalties p.32
11.4 Personal Sanctions p.32
12. Tax p.32

12.1 Tax Rate by Sector p.32
13. Anticipated Reform p.34

13.1 Anticipated Reform p.34
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INDIA Law and Practice
Contributed by: Gowree Gokhale, Tanisha Khanna and Rhythm Vijayvargiya, Nishith Desai Associates
Nishith Desai Associates is an India-centric box transactions in the gaming space, particu-
global law firm with offices in Mumbai, Bengalu- larly cross-jurisdictional investments and entry
ru, Delhi, Silicon Valley, Singapore, Munich and strategies for foreign clients. The firm’s focus
New York. The gaming practice comprises four on research and academic work in this area
leaders and 12 qualified lawyers. The team has enables it to provide cutting-edge solutions for
been a pioneer in the industry, and the gam- clients. Nishith Desai Associates has also been
ing practice has existed almost as long as the instrumental in industry-wide efforts and policy
online gaming industry in India. The team has advocacy on behalf of the Indian gaming indus-
worked on multiple innovative and out-of-the- try.
Authors
Gowree Gokhale has been a Rhythm Vijayvargiya is a
practising lawyer for more than member of the TMT, IP and
27 years and leads the TMT, IP gaming law practice group at
and gaming law practice group Nishith Desai Associates and
at Nishith Desai Associates. She advises clients on a range of
has submitted recommendations transactions, including
to the Indian government on the framework of intellectual property, crypto-assets, data
the federal law and self-regulatory mechanism. protection, gaming, technology and media
Gowree specialises in navigating the intricacies agreements, and commercial law
of the complex laws around technology, media, considerations across different industries.
telecommunications and gaming.
Tanisha Khanna is a senior

member of the TMT, IP and
gaming law practice group at
Nishith Desai Associates and
regularly advises and represents
clients across various industries,
including IP, media and entertainment, gaming
and general commercial matters.
4 CHAMBERS.COM

3 North Avenue
2nd Floor, Maker Maxity
Bandra-Kurla Complex
Bandra (East)
Mumbai
400051
India
Tel: +91 22615 95019

Email: gowree.gokhale@nishithdesai.com
Web: www.nishithdesai.com
1. Introduction diary Guidelines and Digital Media Ethics Code)

Rules, 2021 (the “IT Rules”).
1.1 Current Outlook and Recent Changes
Policy Changes The Gaming Amendments introduced a light-
Appointment of nodal ministries for online touch, co-regulatory framework between MeitY
gaming and esports and designated self-regulatory industry bod-
The Ministry of Electronics and Information ies (SRBs), in line with the government’s over-
Technology (MeitY) was appointed as the nodal all objective of reducing prescriptive laws and
ministry for online gaming and the Ministry of enhancing the ease of doing business in India.
Youth Affairs and Sports as the nodal ministry
for e-sports through amendments to the Gov- In summary, the Gaming Amendments:
ernment of India (Allocation of Business) (Three
Hundred and Seventieth Amendment) Rules, • specify certain online games as permis-
2022 in December 2022. Previously, there was sible, being a (i) permissible online real
no central ministry appointed for these indus- money game (PORMG),) ie, a game where
tries. Further, the Ministry of Information and a user makes a deposit in cash or kind with
Broadcasting (MIB) has been vested with the the expectation of earning winnings on the
jurisdiction over online advertisements, which deposit, or (ii) any other online game that is
may include gaming advertisements. not an online real money game;
• introduce specific regulations for PORMG and
Central law for online games online gaming intermediaries (OGI), ie, entities
On 6 April 2023, the MeitY introduced the Cen- that enable their users to access one or more
tral regulations primarily for real money games online games;
through amendments (the “Gaming Amend- • vest MeitY with the power to extend such
ments”) to the Information Technology (Interme- regulations applicable to PORMG to other
online games as well;
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• require PORMG to satisfy two conditions: Introduction of 30% withholding tax on net
(i) be an online real money game, where a winnings for OGIs
user makes a deposit in cash or kind with The Finance Act, 2023 overhauled the tax regime
the expectation of earning winnings on the for income from online games and created a dis-
deposit, and (ii) be verified by an online self- tinction between taxation of online and offline
regulatory gaming body; games. In this regard, Section 115BBJ was
• provide for the designation of SRBs on meet- introduced in the Income Tax Act, 1961 (ITA) to
ing certain criteria, for the purpose of verifying provide for 30% tax on net winnings from “online
online games as PORMG, as well as dis- game”. An “online game” is defined to mean a
charge functions such as grievance redressal game that is offered on the internet and is acces-
for members, ensuring reporting by members, sible by a user through a computer resource,
and maintaining a list of verified PORMG and including any telecommunication device. Hence,
members; and the obligation is applicable to all types of online
• require SRBs to verify online real money games, ie, games of skill or games of chance.
games as PORMG after being satisfied that (i) The obligation to withhold tax will apply even in
the online real money game does not involve cases where the players do not make a deposit
wagering on any outcome, and (ii) the online for participating in the game.
real money game and the OGI adhere to
certain obligations prescribed under the IT Section 194BA was also introduced in the ITA to
Rules as well as the frameworks of the SRB, impose an obligation to withhold tax on the per-
and only offer their games to those above the son responsible for paying any income by way of
age of 18 (the obligations under the IT Rules winnings from any online game during a financial
require the OGI to offer online games in com- year at the rates in force. These provisions have
pliance with Indian law). been effective from 1 April 2023.
The specific obligations applicable to OGIs and Introduction of 28% Goods and Services Tax
PORMG are discussed in 2.1 Online. for online gaming, casinos and horse racing
In August and September 2023, the central gov-
The above obligations under the IT Rules are ernment notified the amendments to the Central
effective after the expiry of three months from Goods and Services Tax Act, 2017 (the “CGST
the date on which at least three online gaming Amendment Act”) as well as the Central Goods
self-regulatory bodies have been designated. As and Services Tax (Third Amendment) Rules,
per news reports, the All India Gaming Federa- 2023 (the “CGST Amendment Rules”) to imple-
tion, the Esports Player Welfare Association and ment the goods and services tax (GST) at the
jointly the E-Gaming Federation and the Fed- rate of 28% on the full value of the amount paid,
eration of Indian Fantasy Sports have submitted or payable to, or deposited with, the online gam-
three applications respectively to be designated ing platform, starting 1 October 2023. Multiple
as an SRB. However, it has been reported that states including Uttar Pradesh, Karnataka, and
MeitY is now reconsidering dissolution of the Goa have notified implementation of the GST
plan to establish SRBs for certification of games. rate in the respective states, while states like
Kerala and Madhya Pradesh are in the process
of introducing the same.
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Report by MIB’s Animation, Visual Effects, • The report also suggested several meas-
Gaming and Comics Task Force ures for enhancing education and training in
In April 2022, the MIB set up an Animation, Vis- the gaming industry, as well as an incentive
ual Effects, Gaming and Comics (AVGC) Task schemes to attract hardware manufacturers
Force (the “AVGC Task Force”), composed of to the country, such as for gaming consoles.
central government bodies, industry representa-
tives and state governments, to boost industry State-specific changes
potential through various training initiatives and Certain state-level policy changes are expected.
government incentives. The AVGC Task Force Currently, various states are in the process of
released its report in December 2022 (the “AVGC introducing state laws to implement the newly
Report”), which discusses the global and Indi- introduced 28% GST for the gaming industry.
an trends in the AVGC sector along with the
challenges and critical success factors for this Telangana
industry in India. The AVGC Report includes rec- Currently, offering all games for stakes (includ-
ommendations made by the AVGC Task Force, ing games of chance as well as games of skill)
which focus on market access, training and is prohibited in Telangana. The current Telan-
mentorships, education, access to technology gana law banning skill games was challenged
and financial viability in these industries. Below as unconstitutional in the Telangana High Court,
are the major observations and recommenda- as offering and playing games of skill have been
tions discussed in the report. recognised as constitutionally protected activi-
ties by Indian courts. A petition to transfer the
• The AVGC Report recognised the contribution matter to the Supreme Court was filed by the
of the gaming industry to the Indian economy, Telangana government and is currently pending.
and its exceptional growth in the preceding
years. It projected that India would be one Rajasthan
of the world’s leading markets in the gaming The State of Rajasthan had introduced the draft
industry and its value to reach USD3.9 billion Rajasthan Virtual Online Sports (Regulation)
by 2025. Bill 2022 (the “Rajasthan Bill”) in May 2022 and
• The growth of the gaming industry could be sought public comments on the same. It pro-
attributed to its young demographic, increas- posed a licensing regime to regulate fantasy
ing smartphone growth, embracing of cloud sports, esports and derivative formats. Other
gaming, affordability of gaming products, and skills games (eg, poker, virtual stock games
adoption of gaming for education purpose by and quiz games) are not specifically included
businesses. within the regulation. However, in accordance
• The AVGC Report suggested several meas- with the state’s general exemption for games of
ures to further boost the industry, including skill, such games may continue to be offered.
through an annual Gaming Expo conducted In November 2022, the government submitted
by the government of India along with the to the State High Court that the Rajasthan Bill
industry. The Expo would focus on foreign was still under consideration by the state gov-
direct investments (FDI) in gaming, creating ernment.
market access, generation of employment,
knowledge sharing, among others.
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Tamil Nadu online games, including time limits, monetary

In August 2021, the High Court of Madras struck limits, age restrictions, issue show-cause
down certain amendments to a law seeking to notices to defaulting online games provid-
prohibit online games of skill for stakes in Tamil ers, and suspending/revoking registrations in
Nadu as unconstitutional. The state government certain scenarios; and
filed an appeal against the High Court’s order • establishes an appellate authority to hear
before the Supreme Court, which is still pending. appeals from the decisions of the TN Gaming
In parallel, Tamil Nadu enacted the Tamil Nadu Authority suspending/revoking certificates of
Prohibition of Online Gambling and Regulation registration.
of Online Games Act, 2023 effective on 10 April
2023 (the “Tamil Nadu Act”).The Tamil Nadu Act: The Tamil Nadu Regulation of Online Games
Rules, 2023 came into force on 21 April 2023,
• prescribes registration of local online games which prescribes the form and manner for apply-
providers, being online games providers, ing for registration, manner of constitution of the
whose central management and control of the TN Gaming Authority, manner of filing appeals to
service is in Tamil Nadu; and the appellate authority, among others.
• prohibits offering, playing and advertising
online gambling on games of chance with In August 2023, the five-member TN Gaming
stakes, which include those games that: Authority was constituted.
(a) have elements of chance and skill and
the element of chance dominates over the On 9 November 2023, the High Court of Madras
element of skill; struck down the prohibition on rummy and
(b) require superlative skill to dominate poker as unconstitutional. The High Court also
chance; held that the prohibitions under the Tamil Nadu
(c) are presented as involving an element of Act were to be read to apply to only games of
chance; or chance, and not games of skill.
(d) involve any element of random event
generation (eg, cards, dice or wheel). Kerala
In September 2021, the High Court of Kerala
Poker and rummy, which are recognised as struck down as unconstitutional a February 2021
games of skill, were specifically called out as notification introduced by Kerala seeking to pro-
games of chance in the Tamil Nadu Act, effec- hibit “online rummy when played for stakes” (ie,
tively prohibiting them in the state. The Act: a game of skill). An appeal has been filed and is
pending before a division (two-judge) bench of
• specifically prohibits non-local online games the High Court.
providers from offering games of chance in
the state, unless they implement certain due Karnataka
diligence or implement geo-blocking meas- In February 2022, the High Court of Karnataka
ures in Tamil Nadu; struck down certain provisions introduced by
• constitutes the Tamil Nadu Gaming Authority the Karnataka Police (Amendment) Act 2021 (the
(the “TN Gaming Authority”) to register online “Karnataka Act”) that sought to prohibit all online
games and introduce regulations for such games for stakes, including games of skill. The
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state government has filed an appeal against the prohibitions on games of skill introduced in
High Court’s order before the Supreme Court, these states as unconstitutional. The state
which is currently pending. The appeal is now governments have filed appeals against these
joined with the appeal regarding the challenge orders before the Supreme Court.
to Tamil Nadu law and is being heard together
before the Supreme Court. State litigations
Uttar Pradesh
Pending Litigation A petition has been filed in the Allahabad High
There are several litigations pending before the Court challenging the constitutional validity of
Supreme Court and High Courts in India. the CGST Amendment Act and CGST Amend-
ment Rules pertaining to the 28% GST on the
Supreme Court litigations amount paid or payable to or deposited with the
• The Karnataka High Court struck down online gaming platform.
a “show cause notice” issued by the tax
authorities against a rummy operator on the Bombay and Gujarat
basis that the game was not “betting and Petitions have been filed by skill gaming opera-
gambling”, but a game of skill. However, on tors before the High Courts of Bombay and
appeal, the Supreme Court issued a tempo- Gujarat challenging show cause notices issued
rary stay on the order and the matter is still against them by tax authorities seeking to
pending. impose 28% GST on the total buy-in amount
• The question of whether sports betting is a deposited by players with the operator.
game of skill is pending before the Supreme
Court in the case of Geeta Rani vs Union of Delhi
India & Ors (the “Geeta Rani Case”). If the A non-government organisation (NGO) has chal-
judgment concludes that it is a game of skill, lenged the constitutional and legislative validity
sports betting will be exempt from prohibi- of the new central law, ie, the Gaming Amend-
tions under most Gaming Enactments (as ments in a petition before the Delhi High Court.
defined in 2.1 Online) and may be offered in Per reports, it has been alleged in the petition
most Indian states. that the Gaming Enactments go beyond the rule-
• The Supreme Court has also stayed the oper- making powers of the Information Technology
ation of a Bombay High Court order that held Act (the “IT Act”). Further, a suit has been filed
that fantasy sports games are games of skill. by a gaming operator against an app store in the
Accordingly, the Supreme Court may take up High Court of Delhi, alleging that the app store
the question of whether fantasy sports qualify discriminated against the operator by displaying
as games of skill. Notably, several other High a warning to users when downloading the game.
Courts in the country have recognised fantasy
sports games as games of skill. The Supreme Andhra Pradesh
Court has also dismissed several petitions The Andhra Pradesh Gaming Act, 1974 was
seeking permission to appeal against these amended to prohibit all online gaming activi-
orders. ties for stakes (including games of skill). The
• As mentioned above, the High Courts of amendments were challenged before the High
Karnataka and Tamil Nadu have struck down Courts of Andhra Pradesh, where the High Court
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directed the state government to form a commit- activities within the state (the “State Enact-
tee to assess whether rummy, which has been ments”).
held to be a game of skill, is still a game of skill
in online form. The State of Andhra Pradesh had The PGA and most of the State Enactments (col-
appealed against the High Court’s direction to lectively, “the Gaming Enactments”) were enact-
appoint a committee in the Supreme Court. The ed prior to the advent of virtual/online gambling
Supreme Court dismissed the State’s challenge and therefore primarily prohibit gambling activi-
to this direction, and directed the High Court of ties from taking place within physical premises
Andhra Pradesh to assess the issues in light of (defined as a “common gaming house”). Howev-
the Gaming Amendments as well as the report er, some courts (eg, Bombay, Rajasthan, Punjab
by the committee. and Haryana) have applied the Gaming Enact-
ments of these states to online gaming operators
There have also been certain restrictions intro- without specifically dealing with whether such
duced on misleading gaming advertisements laws can apply to online operators or the online
and surrogate advertisements for gambling space. Conversely, the High Courts of Gujarat
products, which are covered in 9.4 Restrictions and Kerala have made it clear that the Gaming
on Advertising. Enactments of these states do not apply to the
online medium.
2. Jurisdictional Overview Under the Central Gaming Amendments

As discussed at 1.1 Current Outlook and Recent
2.1 Online Changes, the Gaming Amendments have intro-
Indian gaming laws operate at a state and a cen- duced obligations on OGIs offering PORMG.
tral level. There are specific Gaming Enactments
to regulate gaming/gambling activities in that The online games and online real money games
relevant state, and the central government has verified as “permissible” by SRBs, ie, “permis-
introduced central regulations applicable to OGIs sible online games” and PORMGs are allowed
under the Gaming Amendments, as discussed at to be offered as per the law in accordance with
1.1 Current Outlook and Recent Changes. The the Gaming Amendments. One of the prescribed
Gaming Amendments apply in addition to the conditions under the IT Rules for verification as
state-wise laws and do not replace them. a PORMG is that the online real money game
“does not involve wagering on any outcome”.
Under the State Gaming Enactments There is no further guidance provided under the
Betting and gambling are State matters under IT Rules with respect to what is meant by “wager-
the Constitution of India, so each state has the ing on any outcome”. The Gaming Amendments
exclusive legislative competence to enact laws introduce several obligations on OGIs, such as:
relating to betting and gambling within the state.
The Public Gambling Act 1867 (the “PGA”) has • requiring OGIs to verify user identity before
been adopted by certain states in India, where- accepting any deposits in cash or kind,
as other states have enacted their own pieces according to the Master Direction – Know
of legislation to regulate betting and gambling Your Customer (KYC) Direction, 2016;
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• requiring OGIs to appoint grievance redres- Betting

sal officers that are resident in India, publish Betting on games of chance is prohibited under
their contact details, establish a mechanism most Gaming Enactments. The treatment of bet-
to make complaints for users and resolve ting on sports and horse races under Indian law
grievances within 15 days from the date of is discussed below.
their receipt;
• providing an appeal process to the Griev- Betting on horse races
ance Appellate Committee for grievances not In the case of Dr KR Lakshmanan vs State
resolved by GOs within 30 days from receipt of Tamil Nadu (the “Lakshmanan Case”), the
of communication from the GO; Supreme Court held that betting on horse rac-
• prohibiting OGIs from financing through ing is a game of skill. Accordingly, it is exempt
credit, or enabling financing to be offered by from the prohibitions under most Gaming Enact-
a third party, for playing online games; ments.
• introducing requirements and criteria for veri-
fication of online real money games offered Most Gaming Enactments have carved out an
by OGIs eg, requirement to apply for verifica- exception for “wagering or betting upon a horse
tion an SRB on such permissible online real race” from the definition of gaming/gambling
money game; (the “Horse Racing Exemption”). However, the
• providing MeitY with the power to issue Horse Racing Exemption is subject to certain
blocking orders against permissible online conditions under the Gaming Enactments – for
real money games; and example, wagering or betting must take place
• requiring OGIs to inform users to not publish, on the day on which the horse has run and in
share, etc certain information via their rules an enclosure that has been sanctioned by the
and regulations, privacy policy, and user state government. In the case of online horse
agreements. racing betting, it would be difficult for these con-
ditions to be met. However, one could argue that
MeitY is vested with the power to issue blocking a horse racing bet is a game of skill independent
orders against the games. of the Horse Racing Exemption.
Certain states such as Nagaland, Telangana, During the COVID-19 pandemic, two Indian
Andhra Pradesh, Tamil Nadu, Chhattisgarh and horse racing clubs (the Mumbai, and Calcutta
Sikkim have also specifically extended their Turf Clubs) received permission from the state
State Enactments to the online medium through governments of Maharashtra and West Bengal
amendments to the Gaming Enactments or respectively to offer online betting on the horse
introduction of new state laws regulating online races conducted in these clubs. The Hyderabad
gaming. The State of Rajasthan is considering Race Club (HRC) has also started accepting bets
the Rajasthan Bill to regulate fantasy-based for- online with the club’s totalisator.
mats, as discussed in 1.1 Current Outlook and
Recent Changes. Sports Betting
The question of whether sports betting is a game
of skill is pending before the Supreme Court in
the Geeta Rani Case.
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It can be argued that sports betting is also a The Sikkim Online Gaming (Regulation) Act 2008
game of skill based on the principles laid down (the “Sikkim Online Act”) introduces a licensing
in the Lakshmanan Case. However, the view regime for punto banco and bingo through the
held by most enforcement authorities in India state-wide intranet.
is that sports betting is a gambling activity and
is thus prohibited. Further, in the recent years, Casino Games
there has been heightened scrutiny and enforce- Casino games are predominantly chance-based.
ment action against remote gambling operators As such, they are treated as betting and gam-
offering and advertising sports betting products bling activities and are therefore prohibited
in India. under most Gaming Enactments.
As stated above, IT Rules prescribe that for veri- As stated above, IT Rules prescribe that for veri-
fication as a PORMG, online real money game fication as a PORMG, online real money game
must “not involve wagering on any outcome”. must “not involve wagering on any outcome”.
Hence, it is unlikely that sports betting would be Hence, it is unlikely that casino games would be
eligible for registration by the SRBs due to the eligible for registration by the SRBs due to the
presence of “wagering on any outcome” as an presence of “wagering on any outcome” as an
element in the online real money game. element in the online real money game.
Bingo The States/Union Territories of Goa and Daman

Depending upon the format, bingo may fall with- & Diu, and Sikkim prescribe a license regime for
in the definition of a “lottery” or under the gen- land-based casinos. The Sikkim Online Act cov-
eral definition of betting/gambling under most ers certain casino games (eg, roulette, casino
Gaming Enactments. It is a game of chance brag and blackjack) that may be offered through
and prohibited in most Indian states. The Indian the state-wide intranet within Sikkim only.
Penal Code specifically prohibits private lotteries
by prescribing that whoever keeps any office or Lotteries
place for the purpose of drawing any lottery, not Under the Lotteries (Regulation) Act 1998 and
being a state lottery or a lottery organised by the Lotteries (Regulation) Rules 2010 (collective-
the state government, will be punishable with ly, the “Lottery Laws”), state governments have
imprisonments or fines. Accordingly, lottery the power to organise, conduct and promote lot-
products cannot be offered in India. teries, subject to certain conditions.
As stated above, IT Rules prescribe that for veri- Some states (eg, Sikkim) regulate physical lot-
fication as a PORMG, online real money game teries, whereas lotteries have been banned in
must “not involve wagering on any outcome”. certain states (such as Madhya Pradesh) and
Hence, it is unlikely that bingo would be eligible other states (eg, Punjab) have online lotteries.
for registration by the SRBs due to the presence
of “wagering on any outcome” as an element in The Lottery Laws empower state governments
the online real money game. to appoint individual or corporate entities as
“distributors” or “selling agents” to market and
sell lotteries on behalf of the organising state.
12 CHAMBERS.COM
Section 294A of the Indian Penal Code 1860 game is not usually considered gambling under
(the “IPC”) specifically prohibits private lotteries. the Gaming Enactments. Similarly, if there is no
Certain states, such as Andhra Pradesh, Guja- money at stake but only prizes are distributed
rat, Karnataka and Maharashtra, have repealed then the games are not considered as gambling.
Section 294A of the IPC and enacted their own Depending on the format and content of such
legislation banning lotteries other than non-profit games, certain other issues may need to be con-
lotteries. Certain other States have introduced sidered, such as:
legislation expressly banning lotteries in their
states (eg, Bihar’s Ban on Lottery Act 1993). • whether the game amounts to a “prize com-
petition” and is therefore subject to regulation
Fantasy Sports under the Prize Competitions Act 1995;
It can be argued that certain versions of fantasy • whether the content of the game would
sports games are preponderantly skill-based trigger any laws prohibiting certain types of
games. Accordingly, such games can be treated content, such as:
as exempt under most Gaming Enactments. (a) the IT Act, which prohibits obscene con-
tent; or
The High Courts of Punjab, Haryana, and (b) the Indecent Representation of Women
Rajasthan have held the Dream 11 format of (Prohibition) Act 1986 (IRWA), which
fantasy sports to be a game of skill and the prohibits the depiction of women in a
Supreme Court has also dismissed several spe- derogatory manner;
cial leave petitions (SLPs) seeking permission to • advertising regulations applicable to in-app
appeal against such High Court orders. advertisements displayed in the game; and
• applicable data protection laws if Indian
The High Court of Bombay has also recognised users’ data is being collected, processed
it as a game of skill. However, at the time of writ- and/or transferred to a foreign entity.
ing (October 2023), there has been a stay order
imposed on the judgment of the High Court of Further to the final point, the MeitY blocked sev-
Bombay by the Supreme Court. Accordingly, the eral social gaming apps with Chinese ties after
Supreme Court may examine this issue now. the Ministry of Home Affairs raised security con-
cerns over Indian user data.
The Nagaland Prohibition of Gambling and Pro-
motion and Regulation of Online Games of Skill PUBG was one of the apps initially blocked.
Act 2015 (the “Nagaland Act”) expressly recog- However, thereafter, MeitY permitted Krafton to
nises virtual team selection games and virtual conditionally re-launch a new app, Battlegrounds
sports fantasy league games as games of skill. If Mobile India (BGMI), subject to quarterly assess-
such games are to be offered online in Nagaland, ments. This may set a precedent for additional
a licence would be required. blocked apps to be re-launched in India.
Social Gaming Poker

Social gaming refers to those games in which no It can be argued that certain variations of pok-
prize is offered to the winner. When there is no er are games of skill for the purpose of most
prize of money or equivalent worth offered, the Gaming Enactments. Accordingly, offering such
13 CHAMBERS.COM
games should be permitted in most Indian States Racing Exemption would need to be met. Turf
that have an exemption for games of skill. clubs regulate betting on physical horse races
within their premises. One such condition under
Furthermore, the Gaming Enactments/courts the Horse Racing Exemption requires turf clubs
in certain Indian states have specifically recog- to conduct the betting within an enclosure that
nised poker as a game of skill in the following is set apart for this purpose. Accordingly, bet-
instances: ting on physical horse races must take place
within the confines of the turf clubs. Such bet-
• West Bengal has specifically excluded poker ting would also be subject to the rules of the
from the definition of “gambling” under the independent turf clubs.
West Bengal Gambling and Prize Competi-
tions Act 1957; Poker/Bingo/Gaming Machines/Lotteries
• the Nagaland Act has specifically categorised Please see 2.1 Online, which also applies to
poker as a game of skill; physical versions of these games.
• the Karnataka High Court has also held that
a licence is not required under the Karnataka Casino Games
Act when poker is played as a game of skill; Only the States of Goa, Daman and Diu, and Sik-
and kim regulate casino games in land-based form.
• the High Court of Madras has read down the The casinos in Goa and Daman and Diu are
Tamil Nadu Act to the extent it sought to pro- regulated under the Goa, Daman and Diu Public
hibit Poker, by holding that Poker is a game Gambling Act 1976 (“the GDD Act”), which pre-
of skill, and hence any prohibition on Poker scribes a licensing regime for:
would be unconstitutional.
• “games of electronic amusement/slot
In the case of Dominance Games Pvt Ltd vs machines” in five-star hotels; and
State of Gujarat and Ors, the High Court of Guja- • table games and gaming on board offshore
rat held that poker is a game of chance and a vessels under the terms of a licence in Goa
gambling activity under the Gujarat Prevention and Daman and Diu.
of Gambling Act 1887. An appeal has been filed
against this order and has been pending before The casinos in Sikkim are regulated under the
the Gujarat High Court since 2018. Sikkim Casinos (Control and Tax) Act 2002 and
the Sikkim Casino Games Commencement
2.2 Land-Based (Control and Tax) Rules 2007 (collectively, “Sik-
Betting kim Casino Laws”), which prescribe a licensing
As discussed in 2.1 Online, the Supreme Court regime for casino games in five-star hotels in
held in the Lakshmanan Case that betting on Sikkim.
horse racing is a game of skill and therefore
exempt from the prohibitions under most Gam-
ing Enactments.
In the case of betting on real (physical) horse

races, the conditions prescribed under the Horse
14 CHAMBERS.COM
3. Legislative Framework begun offering Ultimate Teen Patti and Call it

Right (the “Impugned Games”) after this period.
3.1 Key Legislation The petitioner had delayed in complying with the
Please see 2.1 Online for an overview of the PGA reporting requirements for FDI received by them,
and Gaming Enactments. and this required the filing of a compounding
application to the Reserve Bank of India (RBI).
In addition to the laws discussed in 2.1 Online,
several other laws regulate the Indian gaming The RBI directed the petitioner to approach the
industry. Department for Promotion of Industry and Inter-
nal Trade (DPIIT) to seek clarification on the peti-
Laws on Foreign Direct Investment tioner’s eligibility to receive FDI. The petitioner
Under the Foreign Direct Investment Policy of did not receive clarification for eight years and
India (the “FDI Policy”) issued by the Indian gov- hence filed a writ petition before the Bombay
ernment’s Ministry of Commerce and Industry High Court seeking directions to the RBI to con-
and as codified into law by the Foreign Exchange sider and decide the petitioner’s application for
Management Act 1999 (FEMA) and the Foreign the compounding of such non-compliances. The
Exchange Management (Non-Debt Instruments) DPIIT was also made a respondent in the peti-
Rules 2019 (the “Non-Debt Rules”), FDI is pro- tion.
hibited in the following sectors:
In the affidavit filed by DPIIT, it raised an issue in
• lottery business (including state or private lot- relation to the Impugned Games on the ground
teries and online lotteries); and that they are games of chance and therefore
• gambling and betting (including casinos). amount to gambling, which is a prohibited sector
for FDI. The Bombay High Court analysed past
For violating the Non-Debt Rules, one may have Supreme Court judgments to decide whether
to pay a penalty of: the Impugned Games amounted to gambling;
and held that for a game to amount to gambling,
• up to three times the sum involved where it must be (i) predominantly of chance, and (ii)
such amount is quantifiable; or played for a reward.
• up to INR200,000 where the amount is not
quantifiable. Accordingly, the Bombay High Court directed
the RBI to expeditiously hear and decide on the
Where the violation is ongoing, a further penalty petitioner’s application for compounding of FDI-
may extend to INR5,000 for every day on which related compliances.
the contravention continues.
Exchange Control Laws
In January 2023, the Bombay High Court held The FEMA, read with the Foreign Exchange Man-
that foreign investments in entities offering agement (Current Account Transaction) Rules
games with no real-money rewards does not 2000, prohibits the overseas transfer of money
amount to gambling. The petitioner, Play Games from India in the following circumstances:
24x7 Pvt. Ltd., had been periodically receiving
FDI during the period of 2006 to 2012, and had • remittance of lottery winnings;
15 CHAMBERS.COM
• remittance of income from racing, riding or As per recent news reports, MeitY has directed
any other hobby; and certain Indian TSPs to block access to several
• remittance for the purchase of lottery tickets, offshore sports betting and gambling platforms
banned/prescribed magazines, football pools, offered remotely India. The grounds on which
sweepstakes, etc. MeitY has ordered the blocking of these websites
remain unclear. However, news reports suggest
The IT Act that GST violations raised by GST authorities
If the offering of the game or the content of a and violations of exchange control regulations
game is unlawful, a court or authorised govern- raised by the Enforcement Directorate of India
ment body may direct an intermediary platform (ED) were contributing factors in MeitY’s deci-
– such as the app store or (in case of a browser- sion to issue the blocking order. Online and TV
based app) the internet service provider (ISP), advertisements of offshore betting platforms
telecommunications service provider (TSP), net- have also come under scrutiny from the MIB and
work service provider, etc – to block the app or Department of Consumer Affairs.
a specific game.
As such, MeitY may have issued the order holis-
As discussed at 2.1 Online, the IT Act also tically in response to issues raised by several dif-
empowers the MeitY to direct intermediary plat- ferent central government ministries. MeitY has
forms to block a game or an app if considered recently issued blocking orders against 22 off-
necessary in the interest of “the sovereignty and shore betting apps and websites. The action fol-
integrity of India, defence of India, security of the lows investigations conducted by the ED against
State, friendly relations with foreign States, or illegal betting app syndicates.
public order – or for preventing incitement to the
commission of any cognisable offence relating The Consumer Protection Act
to these grounds”. The Consumer Protection Act 2019 (CPA) forms
the basis of consumer protection law in India.
Intermediaries are also required to inform users The CPA imposes stringent measures on all
through their terms and conditions not to publish service providers (including gaming operators)
certain information, including information that: in order to prohibit unfair and restrictive trade
practices, unfair contracts, deficient services
• causes user harm; and misleading advertisements. In addition,
• is in the nature of surrogate ads; the Consumer Protection (E-Commerce) Rules
• promotes online games that are not permis- impose obligations on “e-commerce entities”,
sible online games nor verified as such; which may include real-money online gaming
• is harmful to a child; platforms.
• infringes any intellectual property rights;
• is false, misleading or misinformation; The Prize Competition Act
• impersonates another person; The Prize Competition Act (PCA) may also apply
• relates to or encourages money laundering or to certain game formats. The PCA was enacted
gambling; and to regulate certain types of competitions. In the
• violates any law for the time being in force. case of RMD Chamarbaugwala vs Union of India,
the Supreme Court held that the PCA would
16 CHAMBERS.COM
only apply to prize competitions that were of a have specifically extended their State enact-
gambling nature. However, because the types of ments to the online medium.
games covered under the PCA (eg, crossword
prize competitions) appear to be games of skill The Tamil Nadu Act defines “online gambling”
and not gambling, there is an anomaly in the as online wagering or betting and this includes
types of games covered by the PCA. playing any online game of chance for money (or
other stakes) in any manner. “Wagering or bet-
The Digital Personal Data Protection Act ting” has been defined widely as including col-
The Digital Personal Data Protection Act, 2023 lection or solicitation of bets, receipt or distribu-
(DPDPA) was enacted in August 2023 in India. tion of winnings or prizes, and any act intended
However, its provisions have not been brought to aid or facilitate wagering or betting.
into effect as yet. The DPDPA introduces sev-
eral compliances for collection and processing 3.5 Key Offences
of personal data in India, as well as outside of Under the Gaming Enactments, most offences
India, if it is in connection with offering goods and prohibitions are in relation to a “gaming
and services in India. The rules under the DPD- house” or a “common gaming house” – except
PA, which will prescribe most implementation in states such as Assam and Orissa, where the
measures, are yet to be introduced. activity of gaming – irrespective of the medium
or location in which it is offered – may be a pun-
3.2 Definition of Gambling ishable offence, and states where the law cov-
“Gambling” or “gaming”, as per most Gaming ers online gaming. These Gaming Enactments
Enactments, is understood to mean “the act provide for various offences in relation to gam-
of wagering or betting” for money or money’s ing/gambling. The liability for offences under the
worth. Gaming/gambling has been judicially Gaming Enactments usually rests with:
interpreted by Indian courts to mean betting or
wagering on games of chance. Typically, under • the owner of the gaming/common gaming
most Gaming Enactments, “gambling” or “gam- house;
ing” does not include: • the person keeping or in charge of the gam-
ing/common gaming house – although the
• wagering or betting upon a horse race/dog Gaming Enactments in a few states specifi-
race if such wagering or betting takes place in cally provide for liability for the company’s
certain circumstances; directors (ie, persons in charge of the com-
• games of “mere skill”; and pany and responsible for the conduct of its
• lotteries. business), the remaining Gaming Enactments
do not have these specific provisions;
3.3 Definition of Land-Based Gambling • the person gambling/found in the common
Please refer to 3.2 Definition of Gambling. gaming house or in possession of instruments
or records of betting (or who is suspected of
3.4 Definition of Online Gambling gambling or possessing such instruments);
Only the states of Nagaland, Andhra Pradesh, • the person who has the “care” or manage-
Sikkim, Chhattisgarh, Tamil Nadu and Telangana ment of – or who in any manner “assists” in
17 CHAMBERS.COM
conducting – the business of any common INR100 fine or one month in prison for being
gaming house; found in a gaming house.
• the person who advances or furnishes money
for the purpose of gaming with persons fre- The state-wise gaming laws also impose a pun-
quenting such a house, room or place; ishment and imprisonment for offenders. Such
• the person who advertises gambling activi- punishment ranges from an imprisonment from
ties; three months to three years, and a fine that may
• under the Chhattisgarh Gambling (Prohibition) be as high as INR20 lakh in some states.
Act, 2022, the person who aids or abets in
indulging anyone in online gambling or abets 3.7 Recent or Forthcoming Legislative
dissemination of information for the purpose Changes
of gambling; As discussed in 1.1 Current Outlook and Recent
• under the Tamil Nadu Act, the non-local Changes, a federal law has been introduced to
persons who provide online gambling service regulate OGIs. In addition, the introduction of
or allow playing of online games of chance 28% GST rate on the total amount deposited
contrary to the law; by the player or on behalf of the player with the
• with regard to the provision of online games operator by way of money or money’s worth for
in Sikkim: online gaming has been introduced. Further, the
(a) a licensee under the Sikkim Online Act states mentioned in 1.1 Current Outlook and
for the contravention of licence terms or a Recent Changes are contemplating amend-
provision of the Sikkim Online Act; ments or have introduced new laws to their state
(b) any person/operator acting on their be- law to regulate or prohibit certain types of online
half; or gaming activity, as discussed. In addition, the
(c) an operator that does not obtain a licence DPDPA has been introduced (see 1.1 Current
under the Sikkim Online Act, but offers Outlook and Recent Changes).
online games, sports betting, or both;
• with regard to the provision of casino games
in Sikkim, a licensee for the contravention of 4. Licensing and Regulatory
licence terms or the provisions of the Sikkim Framework
Casino Rules; and
• specifically in Nagaland, a licensee under the 4.1 Regulatory Authority
Nagaland Act. There are only a small number of states in India
that allow operators to conduct gambling activi-
3.6 Penalties for Unlawful Gambling ties under a licensing regime. The regulatory
Although the Gaming Enactments more or less authorities for these states are as follows.
prescribe fines and/or imprisonment, the amount
of the fine or period of imprisonment may differ • Goa – the Home Department of Goa is the
from state to state. regulatory authority for casinos.
• Daman and Diu – the Director of the Tourism
The PGA imposes a penalty of INR200 or up Department is the regulatory authority for
to three months in prison for owning, keeping casinos, games of electronic amusement and
or having charge of a gaming house, and an slot machines.
18 CHAMBERS.COM
• West Bengal – the Commissioner of Police on net winnings from ‘online game’ have been
grants permits for conducting games of skill implemented. Additionally, Rajasthan is contem-
in a public place, such as a public market, plating a licensing regime to regulate fantasy
fair, carnival or street. sports, esports and derivative forms of fantasy
• Nagaland – the Finance Commissioner is the sport. Tamil Nadu has introduced the Tamil Nadu
licensing authority for offering games of skill Act, which introduces a licensing regime for cer-
online. tain online games and the registration of online
• Sikkim – the authorised officer of the Finance, games providers (see 1.1 Current Outlook and
Revenue and Expenditure Department is the Recent Changes).
regulatory authority for issuing licences for
online games provided through the state-wide 4.4 Types of Licences
intranet (under the Sikkim Online Act) and for Game Registration Requirements
issuing licences for casinos (under the Sikkim OGIs are required to become members of desig-
Casino Laws). nated SRBs and seek registration of their online
• Tamil Nadu – the Tamil Nadu Online Gaming games under the IT Rules. PORMGs need to be
Authority is constituted under the Tamil Nadu verified by SRBs subject to several conditions
Act and rules, and will issue certificate of prescribed under the IT Rules. Some of the key
registration to local online games providers, criteria are that the games:
in accordance with which they can provide
online game services. • do not involve wagering on any outcome;
• are not harmful to any child;
4.2 Regulatory Approach • do not contain surrogate ads;
The Gaming Enactments are prescriptive in as • do not violate any law for the time being in
much as most of the states prohibit gaming/ force;
gambling but carve out an exception for games • comply with provisions relating to minors’
of skill. Hence, should a game qualify as a game competency to contract; and
of skill, the prohibitions under most Gaming • comply with the framework of the SRB.
Enactments would not apply. The IT Rules intro-
duce a co-regulatory mechanism between MeitY Furthermore, depending upon the type of prod-
and SRBs, as discussed above in 1.1 Current uct, and the medium through which the rel-
Outlook and Recent Changes. evant product is to be offered, licences may be
required. The most common are set out here.
4.3 Recent or Forthcoming Changes
As discussed in 1.1 Current Outlook and Recent Casinos
Changes, various states have introduced legis- Licences for offering casino products in five-
lations to specifically prohibit or regulate online star hotels in Goa, Daman and Diu, and Sikkim
gaming. In addition, the IT Rules have been are available under the GDD Act and the Sikkim
amended by the Gaming Amendments, to now Casino Laws respectively. Licences for offering
regulate OGIs and online games offered by casino products offshore in Goa and Daman and
them. Importantly, a 28% GST on the amount Diu are available under the GDD Act. As men-
paid or payable to or deposited with the online tioned in 2.2 Land-Based, the GDD Act contains
gaming platform and a 30% withholding tax provisions for the operation of licensed electron-
19 CHAMBERS.COM
ic amusement/slot machines in five-star hotels, As Stated in 1.1 Current Outlook and Recent
as well as tables and games on board offshore Changes, the question of whether sports betting
vessels. However, a licence can only be applied is a game of skill is pending before the Supreme
to a maximum of 20 slot machines. Furthermore, Court in the Geeta Rani Case. The State of
as mentioned in 3.1 Key Legislation, FDI is pro- Sikkim offers a licence to offer sports betting
hibited in entities that are involved in gambling through the intranet within Sikkim only.
and betting (including casinos).
Fantasy Betting
Poker If the fantasy sports game qualifies as a game
Operators in India may offer skilled versions of of skill, no licence is required for offering such
poker without a licence in all Indian states except products under most Gaming Enactments. How-
states in which it is prohibited, being Telangana, ever, a licence must be obtained for offering
Andhra Pradesh and Gujarat (offline poker). In such games in Nagaland, under the Nagaland
Sikkim and Nagaland operators would need to Act and in Tamil Nadu, under the Tamil Nadu Act.
procure a licence to offer such games.
Lotteries
Sports/Horse Race Betting Under the Lottery Laws, state governments may
For conducting and betting on physical horse appoint an individual or a corporate body as a
races in India, a licence would be required. Dur- “distributor or selling agent” through an agree-
ing the COVID-19 pandemic, two Indian hors- ment to market and sell lotteries on behalf of
ing racing clubs (the Mumbai and Calcutta Turf the organising State. Such persons would need
Clubs) received permission from the States of to obtain authorisation from the State govern-
Maharashtra and West Bengal to offer online ments. Private lotteries are prohibited in most
betting on horse racing conducted in these club. Indian States under the IPC.
As mentioned in 2.1 Online, it appears the HRC
has also started accepting bets online with the Social Gaming
HRC Totalisator only. No licences are required for such games in most
Indian states. However, if such games amount
As far as betting on horse races online is con- to prize competitions, a licence under the PCA
cerned, it can be argued based on the Laksh- may be required.
manan Case that such games are games of
skill and therefore exempt under most Gaming Skill Games
Enactments (see 2.1 Online). Innovative struc- Under the IT Rules, skill gaming operators would
tures can be put in place for a foreign operator need to obtain registration of their games from
to offer such games. the designated SRBs.
In the case of betting on physical horse races, As stated earlier, games of skill are exempted
the conditions under the Horse Racing Exemp- from prohibitions under most Gaming Enact-
tion would need to be fulfilled (see 2.1 Online). ments. Only Nagaland has enacted a licensing
Furthermore, permissions/authorisations may regime specific to online games of skill under
need to be obtained from the relevant turf club. the Nagaland Act. Sikkim has a broader set of
games covered under the Sikkim Act that can
20 CHAMBERS.COM
be offered via the intranet within Sikkim. Tamil • Goa and Daman and Diu – the licence is valid
Nadu Act requires registration of local online for five years.
games providers with the Tamil Nadu Online • West Bengal – permits are issued for specific
Gaming Authority, for all kinds of online games events.
including skill games. However, certain Indian
states specifically prohibit online games of skill There is no specific duration for PORMG regis-
when played for stakes (such as Telangana and tration under the IT Rules.
Andhra Pradesh).
4.7 Application Requirements
4.5 Availability of Licences Some of the key application requirements as per
There is no limit/cap on the number of licences State Enactments are set out below.
that may be offered, although there are restric-
tions – for example, Goa restricts the number of Nagaland
slot machines that can operate under a single The licensee must be an entity that is incorpo-
licence. rated in India, has a substantial holding stake in
India, and has no criminal history. A licence is
There have been news reports indicating that only issued to those entities that have no inter-
Goa is likely to introduce new rules to streamline est in online or offline gambling activities in India
and regulate casino operations. or abroad.
There are no permanent licences issued yet for As per the Nagaland Act, the controlling stake
Daman and Diu therefore, the effectiveness of must be in India, and the executive decision-
the licensing provisions has been practically making powers of licensees are required to be
tested. performed from within the territorial boundaries
of India. The Nagaland Act unfortunately does
4.6 Duration of Licences not provide any guidance on a threshold for this
The duration of the available licences is as fol- requirement to be met.
lows.
The licensee has to provide a dashboard with
• Nagaland – the licence will be valid for five a username and password to the Nagaland
years, subject to compliance with any pre- Authority (as defined in 4.8 Application Timing)
scribed conditions, and will be deemed to supervise the activities of the licensee.
renewed every year thereafter as long as the
licence fee is paid. The licensee may be required to set up an office
• Sikkim – the licence both for casinos and in Nagaland within 12 months of the date the
online games will be valid for five years, licence was issued.
unless cancelled or surrendered, and may be
renewed via application. The licensee’s technology support (hosting of
• Tamil Nadu – the certificate of registration the website, management of the website, loca-
under the Tamil Nadu Act is valid for three tion of servers, etc) is to be within India only.
years, unless suspended or revoked.
21 CHAMBERS.COM
Licences are only for games of skill offered would be best placed to apply (bearing in mind
through online platforms, as further elaborated the application of the foreign exchange control
on in 6.1 B2C Licences. regulations and FDI policy regulations described
in this chapter).
Licensees should not have a criminal history.
4.8 Application Timing
Sikkim Casino Laws The process and timeline for licensing applica-
Only a body corporate registered under the tions is as follows.
provisions of the Registration of Companies Act
(Sikkim) 1961 may apply for a licence. Nagaland
The applicant should submit an application to
Sikkim Online Laws the licensing authority (ie, the Finance Commis-
The licensee must be a company/partnership sioner or the “Nagaland Authority”), identifying
firm incorporated in India. the games for which the licence is being sought.
The application must be accompanied by docu-
The Sikkim Online Act uses potentially confus- ments in support of the promoters’ credentials,
ing terminology and introduced references to audited financials, the software technology plat-
the “intranet” and “intranet gaming terminals”. form, a proposed business plan, and financial
Thus, the Sikkim Online Act restricts the offering projections.
and playing of “online games and sports games”
to the physical premises of gaming parlours Should the Finance Commissioner be prima facie
through intranet gaming terminals within the ter- satisfied with the application, they may issue
ritory of the State. a letter of intent to the applicant. The Finance
Commissioner will then forward the application
Goa and Daman and Diu to certain empanelled firms (lawyers, financial
Only land-based operators require licences in experts, etc) that assist the state government
Goa and Daman and Diu. in scrutinising all applications. The empanelled
firms will then respond to the applicant with their
Tamil Nadu certification or recommendations within 30 days.
The local online games provider may apply for
a certificate of registration with the Tamil Nadu The Finance Commissioner will also have the
Online Gaming Authority. Foreign entities are not right to refer the application to an ad hoc com-
required to apply. The applicant must ensure that mittee or an expert committee to determine
they do not provide any online gambling service. whether the recommendations of the empan-
Additionally, the applicant must not be indulged elled firms must be adopted. These committees
in playing any online game in contravention of are required to make their recommendations
the law. within 14 days. Once the Finance Commissioner
receives the recommendations, they issue the
West Bengal licence within 14 days.
Although the wording of the law in West Ben-
gal does not expressly prohibit a foreign opera-
tor from applying for a permit, an Indian entity
22 CHAMBERS.COM
Some operators have received their licence Tamil Nadu

within a month or two, but in practice there is The application may be made by the local online
no strict timeline that is followed. games service providers for the grant of cer-
tificate of registration to the Tamil Nadu Online
Sikkim – Casino Gaming Authority in the prescribed form. Upon
A licence application must be made by an Indian receipt of such application, the Online Gaming
entity to the State government, which will exam- Authority may accept or reject it within 15 days.
ine the application. The application would not get rejected unless
the applicant is given an opportunity to be heard.
Once it has made any necessary enquiries and is
satisfied that the applicant has a five-star hotel West Bengal
with the capabilities to operate a casino, the An application for a permit to host games of skill
State government can grant a six-month provi- in a public place must be made to the Commis-
sional licence upon payment of a fee. sioner of Police (if the permit is sought in Kolka-
ta) or to the district magistrate or sub-divisional
A provisional licence is issued to enable the magistrate if the permit is sought elsewhere in
licensee to set up the necessary infrastructure the state. In practice, under the framework of
to commence the operation of casino games at other applicable Indian laws (eg, the FDI Policy
any time within that period. When the applicant and the exchange control regulations), an Indian
has fully complied with the terms and conditions operator would currently be in the best position
of the licence, the state government can grant a to apply. However, there is no guidance on how
regular licence upon payment of a fee. long this permit takes to come through.
Sikkim – Online Games 4.9 Application Fees

The licensee must make an application in the Nagaland
form specified by the Sikkim Online Act, along A non-refundable application fee of INR50,000
with the application fees. The state government must accompany the application.
will then conduct an inquiry (if it deems it appro-
priate) before issuing or rejecting the licence. Sikkim
The casino fee is INR5,000 and the online fee
Daman and Diu is INR500.
An application may be made by an individual/
firm/body corporate to the Director of the Tour- Tamil Nadu
ism Department. The Director will then appoint The local online games providers must pay
an inspection officer to inspect the licence INR100,000 as the registration fee for the grant
premises. Once the Director is satisfied with the of certificate of registration from the Tamil Nadu
inspection, they will make a recommendation to Online Gaming Authority.
the Administrator of Daman and Diu, who will
then grant or reject the licence. Please refer to Goa
4.5 Availability of Licences. There is unfortu- The cost of a licence is INR2 million for onshore
nately no guidance on how long this licence and offshore casinos, regardless of the number
takes to come through. of tables or machines installed in the licensed
23 CHAMBERS.COM
premises. The following annual licence fees are increase incrementally by 15% per year with
payable. regard to the minimum assured revenue for each
of the remaining four years.
Onshore casinos
The fee varies based on the size of the casino. For online gaming, an annual fee of INR10,000
Fees ranging from INR100 million to INR400 and an online gaming levy of 1% of the gross
million are prescribed for casinos between 100 gaming yield must be paid to the State govern-
square metres to 10,000 square metres. ment under the Sikkim Online Act.
Offshore casinos Goa

The fee varies based on the passenger capacity The annual licence fee is INR25 million per 100
of the vessel. The fee for a vessel with a pas- square metres for land-based casinos in five-star
senger capacity of up to 200 is INR250 million, hotels and INR 70 million for offshore casinos.
whereas for a vessel with a passenger capacity
of between 200 and 400 it is INR300 million and Daman and Diu
for a vessel with a passenger capacity of more The annual licence fee is INR2 million for a set
than 400 it is INR400 million. of up to 20 machines/stages/tables on board
offshore casinos. Furthermore, there is a fee
Daman and Diu of INR8,000 for the “mother machine” and
Five-star hotels must pay an application fee of INR6,000 per additional stage of electronic
INR2 million for a set of up to 20 machines/stag- amusement/slot machines in five-star hotels.
es/tables. A refundable deposit of INR300,000 is
to be paid, which will be refunded on the expiry
of the licence. 5. Land-Based Gambling
4.10 Ongoing Annual Fees 5.1 Premises Licensing

Nagaland Please refer to 4.7 Application Requirements.
For the first three years, the annual licence fee The states of Sikkim, Goa, and Daman and Diu
per game is INR1 million (or INR2.5 million for a provide for premises licensing.
range of games).
5.2 Recent or Forthcoming Changes
For the next two years, the annual licence fee The state government of Goa has restricted the
is INR2 million (or INR5 million for a range of entry of local residents into land-based casinos.
games). In addition, licensees are required to There have also been news reports that the Goan
pay 0.5% of the gross revenue generated as a government may be planning to shift offshore
royalty. casinos, which are currently on the Mandovi Riv-
er, to a designated gaming/entertainment zone
Sikkim within the state.
For casinos, the licensee must pay gaming fees
to the state government at a rate of 10% of the
gross gaming yield (or INR10 million, whichever
is higher) for the first year. Thereafter, fees will
24 CHAMBERS.COM
6. Online Gambling 6.4 White Labels

There are no licensing/regulatory requirements
6.1 B2C Licences that apply to the use of white-label providers.
Nagaland
As per the Nagaland Act, licences are issued 6.5 Recent or Forthcoming Changes
for offering a variety of games of skill on online All the proposed policy changes/pending litiga-
platforms. tion outlined in 1.1 Current Outlook and Recent
Changes would impact on the online gaming
Sikkim sector.
The Sikkim Online Act allows for licences to
be granted to offer a variety of intranet games 6.6 Technical Measures
(within Sikkim). As per the Sikkim Online Act, the At the outset, please note that only the states
licensee must be a company that is incorporated of Nagaland and Tamil Nadu have introduced a
in India and must operate only in Sikkim. licensing regime for online games of skill. Most
of the online games being offered in India are
Tamil Nadu not regulated/licensed. Such games are exempt
Under the Tamil Nadu Act, local online games from the prohibitions under most Gaming Enact-
providers may apply for registration to offer their ments because they are games of skill.
online games.
Websites that offer games of a gambling nature
Please refer to 4.7 Application Requirements (ie, real-money products that are games of
for more details. chance) may be blocked under certain provi-
sions of the IT Act and the IT Rules.
6.2 B2B Licences (Suppliers, Software,
Etc)
There are no B2B licences to be obtained. The 7. Responsible Gambling (RG),
RBI requires payment processors to obtain Also Known as Safer Gambling
licences under the Payment and Settlement Sys- (SG)
tems Act 2007; however, payment gateways do
not need such licences. Software developers do 7.1 RG Requirements
not generally require licences, unless they have The IT Rules require OGIs to adhere to the
set up in a special economic zone or a software frameworks of the SRBs. The frameworks of the
technology park in India, which have their own SRBs are required to include several measures,
registration and compliance requirements. including:
6.3 Affiliates • safeguards against user harm, including self-

Apart from contractual restrictions that may be harm and psychological harm;
explored, there are no measures in place to reg- • measures to safeguard children, including
ulate the use of affiliates. measures for parental or access control and
classifying online games through age-rating
mechanism, based on the nature and type of
content; and
25 CHAMBERS.COM
• measures to safeguard users against the • taking payments through recognised payment
risk of gaming addiction, financial loss and modes;
financial fraud, including repeated warn- • having fraud prevention mechanisms to pro-
ing messages at higher frequency beyond a tect players’ financial integrity; and
reasonable duration for a gaming session and • publishing a charter for responsible gaming
provision to enable a user to exclude himself on the operators’ websites/apps.
upon user-defined limits being reached for
time or money spent. 7.2 Recent or Forthcoming Changes
Please see 1.1 Current Outlook and Recent
Certain self-regulatory industry associations Changes regarding establishing a grievance
which have applied for SRB designation – such redressal mechanism for users.
as the All India Gaming Federation (AIGF), the
E-Gaming Federation and the Federation of 7.3 Gambling Management Tools
Indian Fantasy Sport (FIFS) – already include There are no gambling management tools or
standards in their skill charters. requirements prescribed under Indian law.
These requirements include: Certain self-regulatory bodies have introduced

measures for responsible gaming, as discussed
• player protection measures such as options in 7.1 RG Requirements.
for self-exclusion, timeout facilities and
deposit limits;
• informing users of self-exclusion measures; 8. Anti-money Laundering (AML)
• providing users with access to self-adminis-
tered tests for gaming addiction and contact 8.1 AML Legislation
details of treatment centres for addiction; In India, the Prevention of Money Laundering
• provisions to regulate the content, duration Act 2002 (PMLA) prohibits money-laundering
and targeted audience of gaming advertise- activities. Under the PMLA, entities carrying out
ments; and “activities for playing games for cash or kind
• financial integrity (eg, regulating the funds (including casinos)” (ie, entities offering games
deposited by the player and requirements to of chance) are classified as “reporting entities”
maintain records of transactions). and are subject to certain reporting obligations
(eg, verifying the identity of clients, maintaining
Although most Gaming Enactments prohibit records and reporting suspicious transactions).
gambling activities and permit games of skill, The PMLA also requires such reporting enti-
they do not prescribe any social responsibility ties to furnish information to the Director of the
requirements for skill gaming operators. The Financial Intelligence Unit – India, as and when
Nagaland Rules prescribe some requirements required.
for licensed operators in the state, such as:
In April 2022, certain news reports suggested
• ensuring that games are not offered to that KYC obligations were likely to be introduced
minors; for online skill gaming operators in an attempt to
curb money laundering.
26 CHAMBERS.COM
8.2 Recent or Forthcoming Changes regulatory authorities in states where licences

As discussed in 8.1 AML Legislation, certain are issued have been covered in 4.1 Regulatory
news reports in April 2022 suggested that KYC Authority.
obligations were likely to be introduced for online
skill gaming operators in order to curb money 9.2 Definition of Advertising
laundering. The ASCI has issued a Code for Self-Regula-
tion of Advertising Content in India (the “ASCI
8.3 AML Requirements Code”), which provides the following definition
As per Section 12 of the PMLA, reporting entities of an advertisement: “A paid-for communication,
are required to maintain records of transactions addressed to the public or a section of it, the
and provide documents that prove the identity purpose of which is to influence the opinions
of their clients. or behaviour of those to whom it is addressed.
Any communication that in the normal course
would be recognised as an advertisement by the
9. Advertising general public would be included in this defini-
tion, even if it is carried free-of-charge for any
9.1 Regulatory/Supervisory Agency reason.”
The MIB has been vested with the jurisdiction
over online advertisements, which may include The CPA defines an advertisement as “any audio
gaming advertisements. Thus far, there have or visual publicity, representation, endorsement
been no regulations introduced by MIB yet. or pronouncement made by means of light,
sound, smoke, gas, print, electronic media,
The Advertising Standards Council of India internet or website and including any notice,
(ASCI) is a self-regulatory industry body whose circular, label, wrapper, invoice or such other
Code has been made applicable for the regula- documents.”
tion of advertisements on television/broadcast-
ing media. 9.3 Key Legal, Regulatory and Licensing
Provisions
Under the CPA, the Central Consumer Protec- Please see 9.4 Restrictions on Advertising for
tion Authority (CCPA) is the relevant regulator in general restrictions and prohibitions on adver-
matters relating to violation of consumer rights, tising. The specific restrictions on licensees in
unfair trade practice, and false and misleading Sikkim, Nagaland and Tamil Nadu are as follows.
advertisements. The CCPA may initiate proceed-
ings directly or on the basis of complaints. It is Sikkim
also authorised to investigate offences, refer In Sikkim, licensees can advertise online games,
matters to other regulators, and issue penalties provided that they comply with certain require-
and directions to violators of the CPA rules. ments. Advertisements of online games must:
With regard to prohibitions under the Gaming • include the address of the online gaming
Enactments, the relevant police/judicial authori- operator’s website, which must include cer-
ties in the respective states implement and tain prescribed information;
enforce the Gaming Enactments. The specific • not be indecent or offensive;
27 CHAMBERS.COM
• be based on facts; ments 2022 (the “Misleading Ads Guidelines”)

• not target any person under the age of 18; introduced by the CCPA. The CPA read with
and Misleading Ads Guidelines prohibits misleading
• not target any jurisdiction in which online advertisements, surrogate advertisements, and
games are prohibited. unfair trade practices through certain types of
promotional activities.
Nagaland
The Nagaland Act permits the licensee to adver- Recently, direct and surrogate advertising of for-
tise on online and offline mediums, and they are eign sports betting platforms in India has come
allowed to display the fact that they hold licenc- under significant scrutiny by the MIB and the
es from the government of Nagaland. Department of Consumer Affairs. News reports
suggest that the CCPA invoked provisions
Tamil Nadu under the CPA to issue show-cause notices to
The Tamil Nadu Act prohibits advertisements six online betting apps for violating advertising
in any media (including electronic media) that norms by misleading consumers through sur-
directly or indirectly induce any person to indulge rogate advertisements.
in online gambling or play any online game of
chance for money or stakes. In consultation with the Department of Con-
sumer Affairs, the MIB has issued five adviso-
9.4 Restrictions on Advertising ries between June 2022–August 2023 to news-
Most State Enactments prohibit the printing, papers, TV channels, digital news publishers,
publishing, selling, distributing or circulating in intermediaries, and over-the-top (OTT) plat-
any manner of any newspaper, news sheet or forms, strongly advising them against showing:
other document, or any news or information with
the intention of aiding or facilitating gambling. • advertisements of online sports betting plat-
These restrictions, however, do not apply to skill forms; and
games in most states. Some state-level restric- • surrogate advertisements for offshore sports
tions are covered in 9.3 Key Legal, Regulatory betting platforms in the guise of sports news
and Licensing Provisions. websites (and targeting such advertisements
toward Indian audiences).
Under the IT Rules, intermediary platforms
(including social media platforms) are required The advisory contained examples of such online
to inform users not to publish any advertisement advertisements, specifically illustrating several
or surrogate advertisement of an online game prominent offshore sports betting platforms.
which is not a PORMG, or of any OGI offering
such games. The advisory indicated that such advertisements
are prohibited under the CPA and the Misleading
In relation to games of skill, while advertising Ads Guidelines. It also suggests that the MeitY
such games is permitted in most Indian states, has the power to direct intermediary platforms
it is regulated by the CPA and the Guidelines to take down such advertisements if they appear
for Prevention of Misleading Advertisements on such platforms.
and Endorsements for Misleading Advertise-
28 CHAMBERS.COM
In relation to the advisory issued to private TV “ASCI Gaming Guidelines”). In a press release
channels, the MIB has cautioned that such dated 4 December 2020, the MIB advised all
advertisements contravene the advertising cable broadcasters to adhere to the ASCI Gam-
code under the Cable TV Network (Regulation) ing Guidelines with regard to advertisements on
Act 1995 and Cable Television Network (Amend- television.
ment) Rules 2021, which also prohibit advertise-
ments of prohibited products. The ASCI Gaming Guidelines state in the pre-
amble that it is not within ASCI’s jurisdiction
Accordingly, such advertisements may be taken to decide the legality of real-money games (ie,
down imminently by the relevant Indian regula- whether it amounts to a “product, the use of
tors (eg, the MIB, the MeitY and the Department which is banned under law”) and such issues
of Consumer Affairs). must be taken up with the concerned regulators.
The preamble further states that ASCI will only
Further, there have been advisories regarding process complaints about advertising content
association with betting platforms. For instance, concerning such games. As such, it appears
the Board of Control for Cricket in India advised from the preamble to the ASCI Gaming Guide-
the Women’s Premier League franchises against lines that ASCI will not determine the legality of
partnership/association with entities involved in the game itself.
betting and gambling, while allowing branding in
relation to fantasy sports. The ASCI Gaming Guidelines ban gaming adver-
tisements from depicting persons under the age
The ASCI Code and ASCI Gaming Guidelines of 18 engaged in playing online games for real-
The ASCI Code restricts certain advertisements money winnings. Additionally, all such advertise-
relating to products whose use is banned under ments must carry disclaimers to the effect that
law. Advertisements for gaming/gambling prod- such games carry an element of financial risk
ucts may fall within this prohibition. and that users should play such games at their
own risk. Furthermore, specific requirements
Surrogate advertisements are also prohibited should be met for displaying this disclaimer,
under the ASCI Code. The ASCI has released depending on whether the advertisement is in
its Guidelines for Qualification of Brand Exten- print or in audio/video mode.
sion Product or Service which lay down objec-
tive criteria for determining the genuineness of The advertising of prize competitions is prohib-
the “unrestricted” brand extension of purported ited, unless it has been duly authorised by the
prohibited products (in terms of sales turnover, relevant authority.
purchase orders, investments, etc). If a brand
extension does not meet the qualification crite- Content-Related Restrictions
ria, it would be considered a surrogate created Games and gaming websites in India, and gam-
to advertise a restricted category rather than a bling operators’ websites in the states of Naga-
genuine brand extension. land and Sikkim, are subject to content-related
laws.
Recently, the ASCI released the ASCI Guidelines
for Online Gaming for Real Money Winnings (the
29 CHAMBERS.COM
Under the IT Rules, online gaming intermediar- nication is regulated by the Telecom Commercial
ies must not publish content which is, among Communications Customer Preference Regula-
others, obscene, pornographic, paedophilic, tions 2018 (TCCCPR). The TCCCPR applies to
relating or encouraging money laundering or communication that is SMS- or voice-based,
gambling, content which causes user harm or is rather than communication via the internet such
harmful to children, among others. as email or OTT messaging services (eg, What-
sApp). The TCCCPR prohibits unsolicited com-
The IPC, IRWA and IT Act penalise obscene con- mercial communications to persons who have
tent, for example, and the IPC prohibits adver- opted out of receiving them. Both telemarketers
tisements for lotteries unless they comply with (to which the sending of commercial communi-
the provisions of the Lottery Laws. cations is outsourced) and senders (the entity
promoting the goods/services) are required to
The CPA classifies the following as “unfair trade register as detailed under the TCCCPR in order
practice”: to send commercial communications.
• the offering of prizes with the intention of not 9.5 Sanctions/Penalties

providing them as offered; and Under the ASCI Code, complaints may be filed
• the conduct of a contest, lottery, game of by the general public or suo moto by the ASCI
chance or skill for the purpose of promoting a itself. If an advertisement is found to be in viola-
product/business interest. tion of the ASCI Code, then the agency/media
vehicle concerned, and the relevant self-regula-
The Consumer Protection (General) Rules, 2020 tory bodies are notified that the advertisement
clarified that permitted lotteries under the Lot- contravenes the ASCI Code. In serious viola-
teries Act, and games of skill would be exempt tions, the media vehicle may be directed to sus-
from the prohibition on unfair trade practices. pend the advertisement.
The CPA also introduces certain penalties for For violations under the CPA, fines of up to INR1
making misleading advertisements for enti- million may be imposed. Every subsequent
ties such as traders, manufacturers endorsers, offence may be punished with up to five years
advertisers and publishers. in prison and a fine of up to INR5 million. The
CCPA may direct misleading or surrogate adver-
The Copyright Act 1957, the Trade Marks Act tisements to be removed.
1999 and the Patents Act 1970 govern IP issues
relating to games (such as the use of trade marks, 9.6 Recent or Forthcoming Changes
copyright, design rights and patent rights in the There are no legislative changes contemplated
technology infrastructure of web operators). with regard to gaming advertisements. However,
as mentioned in 9.4 Restrictions on Advertising,
Advertising of Gambling the Misleading Ad Guidelines were introduced in
Please see the section 9.4 Restrictions on June 2022, which prohibit misleading and sur-
Advertising for the restrictions on advertising. rogate advertisements.
The advertising of products (including gaming
products) through SMS or voice-based commu-
30 CHAMBERS.COM
There is greater scrutiny of such advertisements for such change. Thereafter, the authority has
– in particular, surrogate advertisements for off- the right to decide whether to resume the licence
shore sports betting platforms (as discussed in or suspend it.
9.4 Restrictions on Advertising). The MIB has
recently issued an advisory to TV channels, Additionally, in the event that the transaction
digital news publishers and OTT platforms that involves a listed company, certain regulatory dis-
strongly advises them against showing adver- closures (including stock exchange disclosures)
tisements of sports betting platforms and surro- will need to be made depending upon the nature
gate advertisements for such platforms. Further- of the transaction.
more, the government may introduce new norms
for advertisements of online gaming platforms 10.2 Change of Corporate Control
under the IT Rules. In September 2023, the draft Triggers
of Guidelines for the Prevention and Regula- Please refer to 10.1 Disclosure Requirements.
tion of Dark Patterns, 2023 (the “Dark Pattern
Guidelines”) was introduced. While the Dark 10.3 Passive Investors Requirements
Pattern Guidelines are still in draft form, once There are no specific requirements for passive
brought into force, they would prohibit persons investors in acquisitions or changes of control
and platforms (including gaming operators) from under Indian law. However, should a passive
engaging in dark patterns. Practices like “forced investor wish to have a minimum degree of over-
action”, ‘“false action”, etc, would constitute sight over the running of a company, they may
dark patterns for the purpose of the Guidelines. consider appointing an observer on the board
of such companies. This is not mandated under
law but may be considered, depending upon the
10. Acquisitions and Changes of commercial understanding between the parties.
Control
10.1 Disclosure Requirements 11. Enforcement
There are specific disclosure requirements for
acquisitions and changes of control of gaming/ 11.1 Powers
gambling companies under State Enactments As covered in 3.6 Penalties for Unlawful Gam-
that contain a licensing regime. bling, regulatory bodies (the police/judicial bod-
ies) may impose fines or imprisonment under the
Under the Nagaland Act and the licence terms Gaming Enactments.
and conditions, the licence will be suspended
in case of: 11.2 Sanctions
Some recent cases of enforcement in this indus-
• change in shareholding pattern; try are as follows.
• change in directorship; or
• the licensee being acquired. • The Directorate General of Goods and
Services Tax Intelligence (DGGI) has issued
The licensee must approach the state licensing notices of up to INR280 billion to some of
authority within 30 days and state the reasons the largest online skill gaming platforms. As
31 CHAMBERS.COM
discussed in 1.1 Current Outlook and Recent In the latter scenario, prosecutors would need
Changes, these notices are being challenged to demonstrate through evidence the individu-
before courts. al’s active role in connection with the prohibited
• The ED has conducted raids in various states activity in the relevant state.
like Goa, Chhattisgarh, Maharashtra, Punjab,
Karnataka and West Bengal for investigations There are certain other offences (eg, criminal
related to FEMA violations by offshore bet- conspiracy) for which individuals in the company
ting companies and online casino operators could be held liable under general criminal laws
that were reported to be running an online such as the Indian Penal Code 1860.
business, and various other locations linked
to cases involving illegal betting platforms.
The state police departments have also been 12. Tax
conducting raids and arresting the individuals
involved in the operations of such online bet- 12.1 Tax Rate by Sector
ting platforms. Income Tax
• The central government as well as state As per Indian income tax laws, any income by
governments have been blocking offshore way of winnings from any crossword puzzle,
online betting and casino platforms following card game horse races or other game are con-
investigations conducted by the ED and raids. sidered as “income” in the hands of the players
and taxable at the rate of 30% (plus applicable
11.3 Financial Penalties cess and surcharge) without allowance of any
Please refer to 11.1 Powers. deductions or expenses. Similar manner of taxa-
tion is provided for income by way of winnings
11.4 Personal Sanctions from online games.
With regard to personal liability, only a few states
in India contain express provisions imposing Withholding tax obligations with respect to
vicarious liability upon those in charge of the online and offline games have been separated
company for its business (including its directors with effect from 1 April 2023. While withhold-
or officers). Most other states provide for both ing tax on offline games continue to be 30%
imprisonment and fines for: (plus applicable cess and surcharge) on the
winnings amount exceeding INR10,000 in the
• “whoever” opens, occupies, uses any prem- financial year, withholding tax obligations for
ises as a “common gaming house”; and online games is now 30% (plus applicable cess
• “whoever” assists in conducting the business and surcharge) on “net winnings” without the
of such a house. INR10,000 limit. Further, the Central Board of
Direct Taxes has provided guidelines and clari-
Under Indian law, vicarious liability cannot be fications on the manner of computing such “net
imposed on the directors unless: winnings”.
• the statute expressly provides for it; or Additionally, in cases where the winnings are
• it is shown that the individual had an “active wholly in kind – or partly in cash and partly in
role with criminal intent”. kind (but the cash component is insufficient to
32 CHAMBERS.COM
honour the withholding obligation in respect of soever) will not be deductible from the value of
the whole of the winnings) – the payor is required supply of online money gaming.
to ensure that the tax is paid at the aforemen-
tioned rate before releasing the whole winnings Online money gaming has been excluded from
to the payee. the ambit of Online Information and Data Access
or Retrieval services. However, the amendments
Equalisation Levy require offshore online money gaming opera-
Offshore e-commerce operators are now sub- tors to obtain mandatory GST registration. In
ject to Equalization Levy (EL) at the rate of 2% the case of failure to obtain such registration,
on the consideration received or receivable from the GST department may block any information
“e-commerce supply or services” made or pro- generated, transmitted, received or hosted in
vided or facilitated by such operators to a per- any computer resource used for supply of online
son resident in India. The question of whether money gaming by such offshore online money
this tax applies to offshore gaming operators gaming operator.
may arise. However, considering the specific
facts of the operator’s model, it may be possi- The above amendments are brought in to levy
ble to argue that EL should not apply. There are GST at the rate of 28% on the total amount
certain de minimis thresholds, below which the deposited by a player with an online gaming
gross income is not subject to EL. operator by way of money or money’s worth
regardless of the nature of such game. Offline
Goods and Services Tax games involving betting and gambling continue
There have been several developments in the to be taxed at the rate of 28% on the entire bet
GST regime for the gaming industry with effect amount.
from 1 October 2023.
On the judicial front, the Karnataka High Court,
A new concept of “online money gaming” has in the case of Gameskraft, quashed a huge GST
been introduced, which constitutes all online demand of INR21,000 crores by holding that the
games in which the players pay or deposit an buy-in amount received by the rummy operator,
amount with the expectation of winning rewards, being a game of skill, should not be subject to
regardless of whether (i) the outcome of game is GST. The GST department appealed the decision
dependent on skill or chance, or (ii) such games before the Supreme Court of India. Recently, the
are permissible under any law for the time being tax department’s petition against the Gameskraft
in force. Further, valuation rules have been intro- decision was heard before a three-judge bench
duced, inter-alia, providing that the value of sup- of the Supreme Court, where the Court granted
ply of online gaming, including supply of action- an ad-interim stay on the order of the Karnataka
able claims involved in online money gaming, High Court. This move has led to the opening of
shall be the total amount paid or payable to or assessments by the GST department for several
deposited with the supplier by way of money or operators, which are now being challenged by
money’s worth, including virtual digital assets, the operators before various jurisdictional high
by or on behalf of the player. It is further provided courts.
that any amounts refunded or returned by the
supplier to the players (for any reasons what-
33 CHAMBERS.COM
13. Anticipated Reform
13.1 Anticipated Reform

Please refer to 1.1 Current Outlook and Recent
Changes.
34 CHAMBERS.COM
INDIA Trends and Developments
Trends and Developments

Contributed by:
Gowree Gokhale and Tanisha Khanna
Nishith Desai Associates is an India-centric box transactions in the gaming space, particu-
global law firm with offices in Mumbai, Bengalu- larly cross-jurisdictional investments and entry
ru, Delhi, Silicon Valley, Singapore, Munich and strategies for foreign clients. The firm’s focus
New York. The gaming practice comprises four on research and academic work in this area
leaders and 12 qualified lawyers. The team has enables it to provide cutting-edge solutions for
been a pioneer in the industry, and the gam- clients. Nishith Desai Associates has also been
ing practice has existed almost as long as the instrumental in industry-wide efforts and policy
online gaming industry in India. The team has advocacy on behalf of the Indian gaming indus-
worked on multiple innovative and out-of-the- try.
Authors
Gowree Gokhale has been a Tanisha Khanna is a senior
practising lawyer for more than member of the TMT, IP and
27 years and leads the TMT, IP gaming law practice group at
and gaming law practice group Nishith Desai Associates and
at Nishith Desai Associates. She regularly advises and represents
has submitted recommendations clients across various industries,
to the Indian government on the framework of including IP, media and entertainment, gaming
the federal law and self-regulatory mechanism. and general commercial matters.
Gowree specialises in navigating the intricacies
of the complex laws around technology, media,
telecommunications and gaming.
35 CHAMBERS.COM

3 North Avenue
2nd Floor, Maker Maxity
Bandra-Kurla Complex
Bandra (East) Mumbai
400051
India
Tel: +91 22615 95019

Email: nda@nishithdesai.com
Web: www.nishithdesai.com
Introduction and can be offered in most Indian states. Indian

The year 2023 was a turning point for the Indian courts have also recognised that offering and
gaming industry, which brought about some of playing games of skill are a constitutionally pro-
the regulatory certainty that was hoped for. As tected activity in India. Games like rummy, fan-
per industry report by Lumikai, the Indian gam- tasy sport, certain formats of poker and betting
ing industry was worth USD3.1 billion in 2023 on horse racing are recognised as games of skill
and is estimated to grow to USD7.5 billion by by Indian courts and certain gaming regulations.
2028. The report pegs India’s gaming industry
to have 568 million gamers, including 25% pay- Such games of skill are regulated at (i) a state
ing users. The industry is popularised by real level, under the state-wise anti-gambling laws
money skill games, casual and social games, (the “Gaming Enactments”) – in some states
and e-sports, among others. there is a licensing regime, while in others,
games of skill are a permissible activity; and at
Some key legal, regulatory and tax changes may (ii) a central level, under the recently amended
impact the industry upon product offerings, rev- Information Technology (Intermediary Guidelines
enue and user churn in the next year. However, and Digital Media Ethics Code) Rules, 2021 (the
despite these challenges, there continue to be “IT Rules”).
significant market opportunities for investors
and operators. Discussed below are some of the Implementation of IT Rules in limbo
key changes and likely impacts for each type of The IT Rules primarily regulate real money games
game. There have also been a series of amend- and operators offering such games, termed
ments and clarifications to applicable tax laws online gaming intermediaries (OGI). Under the
affecting the gaming sector. IT Rules, a co-regulatory framework between
the Ministry of Electronics and Information Tech-
Games of Skill nology (MeitY) and designated self-regulatory
As discussed in the India Law and Practice industry bodies (SRBs) has been introduced,
chapter, offering games of skill for stakes are whereby the SRBs verify online real money
excluded from gambling-related prohibitions games as permissible, subject to certain speci-
36 CHAMBERS.COM
Contributed by: Gowree Gokhale and Tanisha Khanna, Nishith Desai Associates
fied criteria being satisfied. One of these criteria High Courts grant protection to skill games;
is that the OGIs ensure that they comply with state appeals remain pending
all applicable laws in India. Since the Gaming Under most Gaming Enactments, offering and
Enactments prohibit games of chance, it is likely playing games of chance for stakes is pro-
that only games of skill will be eligible for regis- hibited, whilst games of skill are exempt from
tration. In addition, OGIs are required to adhere these prohibitions. Only certain states regulate
to the frameworks of the SRBs, which prescribe these games through a licensing regime. A small
several regulations for registered games. number of states have sought to prohibit such
games, however some High Courts have held
As mentioned in the India chapter, the obliga- these bans to be unconstitutional.
tions under the IT Rules are effective after the
expiry of three months from the date on which The High Courts of Karnataka and Tamil Nadu
at least three online gaming self-regulatory bod- have struck down prohibitions on games of
ies have been designated. The All India Gaming skill introduced in these states as unconstitu-
Federation, the Esports Player Welfare Asso- tional. The state governments have filed appeals
ciation and jointly the E-Gaming Federation and against these orders before the Supreme Court.
the Federation of Indian Fantasy Sports have
submitted three applications for designation In parallel, pending the appeal, the State of
as an SRB. However, despite the lapse of eight Tamil Nadu introduced the Tamil Nadu Prohibi-
months since the introduction of the IT Rules in tion of Online Gambling and Regulation of Online
April 2023, no SRB has been designated as yet. Games Act, 2023 (the “Tamil Nadu Act”) in April
2023, which sought to prohibit certain games,
However, it has been reported in the news that including games of skill such as poker and rum-
MeitY, the central regulator appointed in charge my. Subsequently, in November 2023, the High
of online gaming, is now considering dissolution Court of Madras struck down the prohibition on
of the plan to establish SRBs for certification of rummy and poker as unconstitutional. The High
games. The reports suggest that the government Court also held that the prohibitions under the
has concerns about market leading operators Tamil Nadu Act were to be read to apply to only
influencing the independence of the SRBs. In games of chance, and not games of skill.
addition, it has been reported that there have
been further deliberations among different min- In September 2021, the High Court of Kerala
istries, namely the Ministry of Finance, the Min- also struck down a ban on online rummy for
istry of Law and the MeitY in relation to the SRB stakes as unconstitutional. The State of Kera-
framework. la has appealed against this decision before a
larger bench of the High Court, where it remains
In view of this, it appears that the designation pending.
of SRBs, and hence, the implementation of the
regulations under the IT Rules, are in limbo. It appears therefore that High Courts in differ-
ent states are upholding the constitutional right
Recent reports also suggest that an interministe- to offer games of skill, and regularly recognis-
rial committee is revisiting this framework. ing that games of skill cannot be prohibited. It
remains to be seen how the appeals will pan out.
37 CHAMBERS.COM
Foreign Direct Investment in skill games and When such games are offered remotely from
games without rewards offshore, foreign remittances by Indian users
Under the Foreign Direct Investment Policy of to participate in such games also contravenes
India (the “FDI Policy”) issued by the Indian gov- Indian exchange control laws. In addition, such
ernment’s Ministry of Commerce and Industry operators have been receiving notices for eva-
and as codified into law by the Foreign Exchange sion of goods and services tax (GST) from GST
Management Act, 1999 (FEMA) and the Foreign authorities. Several SRBs have been active in
Exchange Management (Non-Debt Instruments) pointing out issues of such offshore operators
Rules, 2019 (the “Non-Debt Rules”), foreign offering their products to Indian users, and Indi-
direct investment (FDI) is prohibited in lottery an users remitting funds to participate in such
business (including state or private lotteries games, to relevant regulators.
and online lotteries) and gambling and betting
(including casinos). There has been a slew of enforcement actions
against the offering and advertising of such
The terms “gambling and betting (including casi- games in India in the last few months. These
nos)” are not defined under the FDI Policy/Non- have been summarised below.
Debt Rules. However, in a significant ruling, the
High Court of Bombay has upheld that foreign MeitY blocks access to offshore gambling
investment in entities offering games with no websites
real-money rewards does not amount to “betting MeitY has directed certain Indian telecoms ser-
and gambling” under the FDI Policy. The Court vice providers (TSP) to block access to several
interpreted past Supreme Court judgments offshore sports betting and gambling platforms
and the Court reiterated that the predominant offered remotely India. The grounds on which
element of the activity (skill or chance) would MeitY has ordered the blocking of these websites
determine the character of the game. In order remain unclear. However, news reports suggest
to constitute gambling, (i) a game must be pre- that GST violations raised by GST authorities,
dominantly a game of chance, and (ii) must be violations of exchange control regulations, and
played for a reward. contraventions of money-laundering laws were
factors involved in MeitY’s decision.
Games of Chance
As mentioned above, most Gaming Enactments Scrutiny of advertisements
prohibit offering and playing games of chance Recently, direct and surrogate advertising of for-
for stakes. eign sports betting platforms in India has come
under significant scrutiny by the Ministry of Infor-
Since the Gaming Enactments prohibit games mation and Broadcasting (MIB) and the Depart-
of chance, it is likely that only games of skill will ment of Consumer Affairs. In consultation with
be eligible for registration under the IT Rules the Department of Consumer Affairs, the MIB
as well. Games of chance may include casino has issued five advisories between June 2022 to
games and bingo games. Sports betting is also August 2023 to newspapers, TV channels, digi-
regarded as a game of chance by Indian authori- tal news publishers, intermediaries, and over-
ties. the-top (OTT) platforms, advising them against
showing advertisements of online sports betting
38 CHAMBERS.COM
platforms, and surrogate advertisements for off- Government allows re-launch of certain
shore sports betting platforms in the guise of blocked social games
news websites. Such advertisements have been In 2020–2021, MeitY blocked several social
targeted towards Indian audiences. gaming apps, including Free Fire and Player
Unknown Battlegrounds in India. National secu-
The advisory contained examples of such online rity concerns about the location of Indian user
advertisements, specifically illustrating several data, addiction concerns among youth and con-
prominent offshore sports betting platforms. cerns over in-app purchases were reported rea-
sons for such blocking.
Sporting authorities have also cautioned ath-
letes from associating with betting platforms. However, thereafter, MeitY permitted Krafton
For instance, the Board of Control for Cricket to conditionally re-launch a new app, Battle-
in India advised the Women’s Premier League grounds Mobile India (BGMI), subject to quar-
franchises against partnership/association with terly assessments. As per the reports, Garena
entities involved in betting and gambling. is also seeking to re-launch Free Fire in India.
Raids and arrests by the Enforcement This may set a precedent for additional blocked
Directorate apps to be re-launched in India.
The Enforcement Directorate (ED), the authority
responsible for administering India’s exchange Advertising
control and anti-money laundering laws, has In-app advertising revenues remains a primary
been conducting raids in various states like Goa, reason for the growth of social games in the
Chhattisgarh, Maharashtra, Punjab, Karnataka Indian market. Hence, the legality of the content
and West Bengal for investigations related to of such advertisements must be ensured at the
FEMA violations by offshore betting companies time of showcasing advertisements.
and online casino operators.
E-Sports
Casual/Social Games With the GST amendments affecting the real
Social gaming refers to those games in which money gaming sector, there has been increased
there is no buy-in and no prize is offered to interest in e-Sports. The Esports Federation of
the winner. When there is no prize of money or India (ESFI) has clarified that the amendments
equivalent worth offered, the game is not usually would not impact on e-sports offerings.
considered gambling under the Gaming Enact-
ments. In December 2020, the Ministry of Youth Affairs
and Sports was appointed as the nodal minis-
As per industry reports, the online gaming try for E-sports. However, thus far, no specific
industry’s growth will be spurred primarily due central regulations have been introduced for
to growth of in-app purchases in casual games, e-sports specifically. One industry self-regulato-
and in-game advertising revenues. Hence, these ry body, the Esports Player Welfare Association,
games remain popular in the Indian market. has applied for designation as an SRB under the
IT Rules.
39 CHAMBERS.COM
Certain states have taken steps towards encour- Goods and Services Tax
aging e-sports. For instance, as per news The GST regime for the online gaming industry
reports, the government of Uttar Pradesh has has been overhauled with effect from 1 October
entered into a memorandum of understanding 2023 through a series of amendments. These
with Garena to encourage the growth of e-sports amendments were brought in to levy GST at the
in the state and conduct e-sports tournaments rate of 28% on the total amount deposited by a
and events in the state. The State of Madhya player with an online gaming operator by way
Pradesh and Uttar Pradesh are also setting up of money or money’s worth, regardless of the
e-sports academies in the state. nature of such game (ie, skill or chance). Offline
games involving betting and gambling constitute
Tax the supply of goods subject to GST and continue
Income Tax to be taxed at the rate of 28% on the entire bet
As per Indian income tax laws, any income by amount.
way of winnings from any lottery, crossword
puzzle, card game, horse races or other game Industry reports suggest that while online real
exceeding INR10,000 is subject to a withholding money gaming (RMG) revenue grew by USD500
tax and considered as “income” in the hands of million in 2023, this may slow in coming months
the players and taxable at the rate of 30% (plus due to, among other reasons, the amendments
applicable cess and surcharge), without allow- to GST regime.
ance of any deductions or expenses.
Data Protection
In April 2023, amendments were introduced to Most gaming businesses are data-driven, and
the Income Tax Act, 1961 (ITA) prescribing that collect, process and store vast amounts of user
an OGI was required to deduct income tax on data. In August 2023, India introduced a piece
the net winnings at the rate of 30% from any of landmark legislation, the Digital Personal Data
online game from a user account. The ITA over- Protection Act, 2023 (DPDPA). However, its pro-
hauled the tax regime for income from online visions have not been brought into effect as yet.
games and created a distinction between taxa- The DPDPA introduces several conditions for
tion of online and offline games. Subsequently, the collection and processing of personal data.
the Central Board Direct Taxes prescribed the The DPDPA has extra-territorial effect and also
manner of computation of net winnings through applies to processing of personal data of users
guidelines. located in India, outside of India, if it is in con-
nection with offering goods and services in India.
These changes introduced much-needed clar-
ity on tax deduction obligations and guidance Hence, several Indian, or India-focused gaming
on computation of net winnings for the industry. businesses are evaluating whether their prac-
tices comply with the DPDPA.
40 CHAMBERS.COM
CHAMBERS GLOBAL PRACTICE GUIDES
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read trend forecasts from legal experts from across key jurisdictions.
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email Katie.Burrington@chambers.com

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CHAMBERS GLOBAL PRACTICE GUIDES

India: Law & practice and Trends & Developments

Law and Practice

2. Jurisdictional Overview p.10

3. Legislative Framework p.15

4. Licensing and Regulatory Framework p.18

5. Land-Based Gambling p.24

6. Online Gambling p.25

7. Responsible Gambling (RG), Also Known as Safer Gambling (SG) p.25

8. Anti-money Laundering (AML) p.26

10. Acquisitions and Changes of Control p.31

11. Enforcement p.31

12. Tax p.32

13. Anticipated Reform p.34

Tanisha Khanna is a senior

Nishith Desai Associates

Tel: +91 22615 95019

1. Introduction diary Guidelines and Digital Media Ethics Code)

Tamil Nadu online games, including time limits, monetary

2. Jurisdictional Overview Under the Central Gaming Amendments

• requiring OGIs to appoint grievance redres- Betting

Bingo The States/Union Territories of Goa and Daman

Social Gaming Poker

In the case of betting on real (physical) horse

3. Legislative Framework begun offering Ultimate Teen Patti and Call it

Some operators have received their licence Tamil Nadu

Sikkim – Online Games 4.9 Application Fees

Offshore casinos Goa

4.10 Ongoing Annual Fees 5.1 Premises Licensing

6. Online Gambling 6.4 White Labels

6.3 Affiliates • safeguards against user harm, including self-

These requirements include: Certain self-regulatory bodies have introduced

8.2 Recent or Forthcoming Changes regulatory authorities in states where licences

• be based on facts; ments 2022 (the “Misleading Ads Guidelines”)

• the offering of prizes with the intention of not 9.5 Sanctions/Penalties

13. Anticipated Reform

13.1 Anticipated Reform

Trends and Developments

Nishith Desai Associates

Tel: +91 22615 95019

Introduction and can be offered in most Indian states. Indian

Chambers Global Practice Guides bring you up-to-date, expert legal

To find out more information about how we select contributors,

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