India: New Law Passed In The State Of Nagaland In India To Regulate Online Gaming

The Legislative Assembly of the State of Nagaland in India, as per reports, recently passed The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, 2015 ("Bill"). The Bill was reviewed by a Committee set-up by the Government of Nagaland. The Committee recommended the passing of the proposed law without any significant changes. The Bill is awaiting the assent of the Governor of the State of Nagaland, in order to be enacted as a law in the State. This update is provided on the basis of the version of the Bill as was presented before the Legislative Assembly.

The primary objective of the Bill is to prohibit gambling, and to regulate and promote "online games of skill" in the State. The Bill proposes a license regime under which licensees may provide wagering or betting on online "games of skill" or make profits by providing a medium for playing "games of skill". Providing such online games of skill will not be construed as gambling so long as they are provided in territories and are accessed by players in territories where such games are not construed as gambling or are prohibited.

Some of the key highlights of the Bill are:

i. Games of Skill

The Bill adopts the "preponderance of skill" test laid down by the Supreme Court of India ("Supreme Court") and proposes that a "game of skill" would include all games where there is a preponderance of skill over chance, including where the skill relates to (i) strategizing the manner of placing wagers or placing bets, (ii) selection of a team or virtual stocks based on analysis, or (iii) the manner in which the moves are made, whether through deployment of physical or mental skill and acumen. Further, certain games such as chess, bridge, poker, rummy, nap, auction, virtual sports fantasy sports leagues and virtual team selection games have been explicitly enlisted in the Schedule to the Bill as "games of skill".

To ensure the contemporaneity of the statute, games that have been declared as, or determined to be "games of skill" by Indian or international courts or other statutes; or games for which domestic and international competitions and tournaments are conducted, or games which can be determined to be "games of skill" may get included in the Schedule to the proposed law. The Schedule may be updated by the State Government either on its own motion or on representation made by a party. Thus, potential operators may make a representation to the Government that a certain game should be classified as a "game of skill" and accordingly, the State Government may at its discretion classify such game as a "game of skill" and/or issue a license to the operator for offering such game.

ii. Stakes and Profits

The Bill explicitly permits the licensee to offer "games of skill" on their website, mobile platform, television or any other online media and also to earn a revenue by means of advertising or by taking a percentage of winnings of gameplay or charging a fixed fee for membership or for downloading a game. Thus, profiteering by the licensee on games of skills is permitted.

The Bill also clarifies that if players play games of skill for stakes under the license, this would not amount to gambling.

However, there seems to be a contradiction in the definitions of "wagering" / "betting" and "stake". The definition of "wagering or betting" contemplates staking of money or virtual currency, however, the definition of "stake" specifically does not include virtual currency. Hopefully, this discrepancy would be addressed in the final version of the Bill that is enacted.

iii. Licenses

A license may be granted to a person, company or limited liability company incorporated in India, and having a substantial holding and controlling stake in India. Further, the executive decision making powers and processes would be required to be performed from within India and the technology support, including hosting and management of the website, placement of the servers would need to be within India.

Although the text of the Bill is ambiguous on the subject, it is clear that the intention of the Government of Nagaland is to issue licenses to persons in India or companies incorporated in India. Even if an Indian company applying for a licensee, would have an amount of foreign investment, the Bill would require that the majority / controlling stake of the company should vest with another Indian company and not a foreign company. Further, it has been made clear that technology support, maintenance and hosting of the website, and placement of the servers may be done anywhere in the territory of India and not necessarily in the territory of the State of Nagaland. This ought to bring comfort to potential operators, unlike in the case of operators under the Sikkim license regime.

Further, a license would only be granted to a licensee which has "no interest" in any online or offline gambling activities in India or overseas. This may pose challenges to established players in the Indian gaming industry that have wide-ranging operations in multiple States.

The Bill proposes that the licensing authority is required to make a decision within 6 months from the date of receipt of an application, on whether or not to issue a license to an applicant. Hence, unnecessary delays on the State Government's behalf may be avoided.

iv. Games of Skill offered Pan India

A license holder would be permitted to offer "games of skill" for which it holds a license for, in other States in India where such games are not classified as gambling and hence prohibited. Further, where a the Government of another State in which such games are being offered by a licensee, is of the opinion that a licensee is operating in such State in violation of the Bill or local laws of the respective State, it may inform the Nagaland Government of such alleged violation.

This provision seems to be in consonance with the fact that State Governments have been entrusted with the power to frame state specific laws on 'betting and gambling' within their state. Consequently, permissibility of such activities by a Nagaland licensee in other states falls within the purview of such state.

v. Penalties

In case a licensee was found to be engaging in "games of chance or gambling activities", it would be liable to a fine of INR 20,00,000 (approx. USD 30,000) in the first instance and may be extended to simple imprisonment in case of a repeat offender.

In comparison with The Sikkim Online Gaming (Regulation) Act, 2008 along with its rules ("Sikkim Online Gaming Law") which imposes a fine of only INR 10,000 for violation of the terms of the license; the Bill imposes a monetary penalty of a much higher amount. Although the Bill does not specify, it is likely that imprisonment would extend to directors and other officers in charge of the company in the event of a repeated offence.

vi. Rules

The Bill contemplates issuance of rules which will prescribe the manner and format for applications for a license, or the terms and conditions under which a license may be issued. Such rules may also address aspects such as license fees payable and annual fees payable by operators to the State Government. One must wait and watch as to when rules may be framed under the Bill to address such aspects.

vii. Licensing Authority

The Bill provides that the State Government may designate an authority or body to monitor and regulate activities of the licensees to ensure compliance under the Bill, and to settle disputes arising out of the licensees' activities.


The Bill is definitely a positive step towards not only clearing the ambiguity on what constitutes "games of skill" but also towards a promising license regime for potential operators to set up shop.

One cannot but help make a comparison to the Sikkim Online Gaming Laws, as it is presently the only other online license regime in the country. Two main concerns of operators under the Sikkim Online Gaming Laws license regime, were the (i) high fees payable to the State Government for procuring the license along with the high amount of online annual gaming levy, and (ii) the restriction on offering of games within the boundaries of the State of Sikkim and through intranet gaming terminals. Gaming laws of most states of India do not apply to games of skill. Since the Bill contemplates licenses of only games of skill, the licensee may be able to offer such games almost in all states of India, unless states object to certain specific games not being games of skill. There are certain states which have more restrictive prohibitions than the other states, where the licensee may not be able to offer even the games of skill.

As the online fantasy sports market continues to develop rapidly in India, owing to technological advancements and rise in popularity of sports such as Kabaddi and Football, along with the existing popularity of cricket, the inclusion of online fantasy sports within the ambit of the license only makes it a dream match-day up ahead for potential operators that have a keen eye on India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Aaron Kamath
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions