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The online gaming sector in India is expected to grow to a whopping $9.1 billion by 2029, largely dominated by real money games, a joint report by gaming platform WinZO Games and Interactive Entertainment and Innovation Council (IEIC) released at the Game Developers Conference in San Francisco. According to the report, India is home to 591 million gamers.1
This rapid expansion, however, brings to the forefront a critical and often contentious debate: Is online gaming (like Rummy, Dream 11, Poker, etc.) a game of skill, demanding intellect and strategy, or merely a game of chance? This fundamental question lies at the heart of India’s perplexing and often contradictory legal landscape surrounding gaming and betting. As digital platforms revolutionise how we play, offering everything from fantasy sports leagues to online rummy, the century-old laws struggle to keep pace. Why is betting, seemingly a universal taboo, allowed in India? This article delves into the historical and constitutional framework, landmark judicial pronouncements, and ongoing legislative efforts that shape the unique trajectory of gaming and betting laws in India.
Historical and Constitutional Framework
The Public Gambling Act of 1867 casts a wide net, primarily prohibiting the operation of “common gaming houses” and penalising those found gambling within them. However, critically, this very Act contained a subtle yet profound exception: it did not prohibit “games of mere skill.”2 This seemingly innocuous phrase became the bedrock upon which the entire edifice of legal gaming in India would eventually be built. Unlike games where the outcome is random, a game of skill, even with stakes, was not deemed “gambling” under this law. This distinction would bloom into the central defining feature of India’s gaming jurisprudence.
Along with this, India, being a federal republic, grants individual states the power to legislate on “betting and gambling” under Entry 34 of List II (State List) in the Seventh Schedule of the Constitution. This decentralisation has inevitably led to a patchwork of laws across the country. While states like Goa and Sikkim have embraced regulated casinos and certain forms of betting as revenue generators, other states have opted for stricter prohibitions, even attempting to ban online games that elsewhere are considered lawful skill-based activities. This fragmented approach means that what is permissible in Bengaluru might be illegal in Chennai, creating confusion for both operators and players.
Gaming Laws
The legal landscape of gaming in India is a patchwork of Central and State legislations. While “betting and gambling” fall under State jurisdiction, certain Central laws indirectly impact the gaming sector, like Section 30 of The Indian Contract Act, 1872, declares wagering agreements “void and unenforceable,” though not illegal, meaning no suit can be brought to enforce them. Foreign Exchange Management Act, 1999 (“FEMA”) read with the Foreign Exchange Management (Current Account Transaction) Rules, 2000, prohibits remittances of income from activities like lottery winnings, racing, and sweepstakes. Moreover, Foreign Direct Investment (FDI) in entities engaged in lotteries, gambling, and betting, including casinos, is prohibited. Collaborations involving foreign technology for gambling and betting activities are also barred and the Public Gambling Act, 1867.
Individual Indian states have enacted diverse legislation. Nagaland’s 2015 Act broadly defines and promotes “games of skill,” including Chess, Poker, Rummy, and fantasy sports, even seeking pan-India application for licensed online “games of skill.” In contrast, Goa’s 1976 Act stands out for permitting casinos and certain games of chance in five-star hotels and offshore vessels. Sikkim’s 2008 Act initially allowed licensed online games like Poker and Blackjack, but a 2015 amendment restricted these to physical “gaming parlours” within the state. Conversely, Prohibitory States such as Telangana, Andhra Pradesh, Tamil Nadu, Odisha, and Assam have taken a blanket approach, initially prohibiting all online gaming, including both games of skill and chance. However, it’s worth noting that specific prohibitions, like Tamil Nadu’s ban on online rummy and poker, have faced successful legal challenges.
“Game of Chance” v. “Game of Skill”
Under India’s gaming law, certain forms of betting are permitted because there lies a judicial distinction between games of “skill” and “chance.” The Supreme Court of India, through a series of landmark judgments, has consistently clarified that activities predominantly requiring skill, rather than luck, do not fall within the ambit of “gambling” and are thus protected under Article 19(1)(g) of the Constitution, which guarantees citizens the right to practice any profession or carry on any trade or business. A game of skill, in this context, is one where the outcome is determined primarily by the player’s knowledge, training, attention, and experience, even if an incidental element of chance is present. Conversely, a game of chance is one where luck or random factors overwhelmingly dictate the outcome.
The critical distinction in Indian gaming law lies in the “dominant element” test, established by the Supreme Court.3 This test assesses whether skill or chance predominantly influences a game’s outcome. The case of State of Bombay v. R.M.D. Chamarbaugwala4 (1957) laid the conceptual foundation by distinguishing between competitions that were substantially based on skill and those that were not. This ruling was instrumental in establishing that competitions requiring a substantial degree of skill would not be classified as gambling.
In State of Andhra Pradesh v. K. Satyanarayana5 (1968). The Supreme Court analyzed the game of Rummy and held that “Rummy is not a game entirely of chance like the ‘three-card’ game. It requires a certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. It is mainly and preponderantly a game of skill.” This judgment was a watershed moment, unequivocally classifying Rummy as a game of skill.
Further in Dr. K.R. Lakshmanan v. State of Tamil Nadu6 (1996) the Supreme Court addressed whether horse racing constituted a game of skill and held, “In our opinion, a game of skill is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. A game of chance, on the other hand, is one in which chance predominates over skill. It is the dominant element—’skill’ or ‘chance’—which determines the character of the game.” By classifying horse racing as a game of skill.
Currently, the explosion of online fantasy sports platforms has brought a new wave of legal scrutiny. The Punjab & Haryana High Court, in Varun Gumber v. Union Territory of Chandigarh7 (2017), directly addressed whether fantasy sports, specifically fantasy cricket, amounted to gambling. The court, drawing parallels to the established principles, held that success in fantasy sports leagues required “the exercise of considerable skill, judgment, and discretion” in selecting virtual teams, analysing player performance, and understanding game dynamics. It concluded that the outcome was not dependent on mere chance, thus classifying it as a game of skill. This decision was subsequently upheld by the Supreme Court, providing a crucial legal fillip to the burgeoning fantasy sports industry in India. The Rajasthan High Court, in Ravindra Singh Chaudhary v. Union of India8, also opined that online fantasy sports games are games of “mere skill” and are protected under Article 19(1)(g).
The legal status of Poker was interpreted by the Gijarat High Court in Dominance Games Private Limited v. State of Gujarat9, which held that Texas Hold’em Poker to be a game of chance, emphasising the uncontrolled initial distribution of cards and the changing complexion of the game with each turn and betting. An appeal against this order is currently sub judice. Conversely, the Karnataka High Court in Indian Poker Association v. State of Karnataka10 held that “in respect of the game of poker if played as a game of skill, license is not contemplated”. The Calcutta High Court, in Indian Poker Association v. State of West Bengal11, stated that Poker is not included in “gaming or gambling” under the West Bengal Gambling and Prize Competitions Act, 1957, and playing it without other offences does not attract police interference.
The evolving landscape also sees states making their own determined efforts to regulate, or even ban, online gaming. The Madras High Court, in June 202512, upheld the State’s power to impose restrictions on online real-money gaming through the Tamil Nadu Prohibition of Online Gaming Authority (Real Money Games) Regulations, 2025. The court affirmed the State’s legislative competence under Entry II of the Constitution of India and upheld “blank hours” and Aadhaar-based KYC for age verification as reasonable measures to mitigate harm. This highlights the ongoing legislative efforts at the state level to balance economic activity with social concerns like addiction and financial distress. Similarly, the Kerala High Court, in 2021, had reversed a state-level ban on online rummy, reaffirming that online rummy, whether played with or without stakes, remains a game of skill and is thus protected under fundamental rights, echoing the consistent judicial stance.
Online Gaming – Current Status
The legal landscape for online gaming remains a “grey zone” due to the outdated nature of existing statutes that largely predate the internet. This has resulted in inconsistent interpretations and enforcement across different States. While some States like Nagaland, Sikkim, and Meghalaya have introduced regulatory frameworks, others, such as Telangana, Andhra Pradesh, and Karnataka, have adopted prohibitive stances, treating online gaming on par with physical gambling.
Recent efforts by the Central Government have aimed to bring more clarity. The IT (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 proposed a co-regulatory federal framework involving the Ministry of Electronics and Information Technology and self-regulatory industry bodies for permissible “online real money games”. However, this framework was not operationalised. Consequently, the Central Government is now considering establishing a direct federal government regulator for online games.
Conclusion
The ongoing judicial proceedings underscore the fluidity of the regulatory environment. Despite these ambiguities, the industry continues to grow, driven by a receptive and interested population. As long as a game can demonstrably prove to involve “substantial skill,” requires strategies and experience, and adheres to principles of fair play, its operation can generally be considered legal, subject to compliance with specific State regulations. Despite these legal foundations, significant grey areas and challenges persist. The rapid evolution of online games continuously blurs the lines between skill and chance, requiring constant judicial interpretation. While physical gambling houses are largely prohibited, the amorphous nature of online betting means it often operates in a largely unregulated space, with current laws struggling to effectively govern it. Concerns about potential financial fraud, money laundering, and gaming addiction are valid, prompting calls for stricter oversight, exhaustive KYC norms, and responsible gaming measures like deposit limits and self-exclusion options.
Citations
Expositor(s): Adv. Khushboo Saraf and Aradhya Lavania (Intern)
