1 History of and overall attitudes to gambling
1.1 How prevalent are different types of gambling in your jurisdiction? For example, does the current law reflect: (a) Religious or moral objections to gambling? (b) A permissive approach which also seeks to address the social consequences of gambling? and (c) The promotion of gambling as an ‘export' industry?
(a) Religious or moral objections to gambling?
India has traditionally been culturally opposed to gambling even though it has existed in Indian society since ancient times. While India is a multicultural society – influenced by scores of religious and philosophical theories, both from mythology and from sacred texts – gambling has always been seen as a vice rather than a form of entertainment. But although gambling is frowned upon from a moral and religious perspective, the law has failed to prevent people from indulging in this activity because of its perennial allurement.
(b) A permissive approach which also seeks to address the social consequences of gambling?
"Betting and gambling" are governed by Entry 34 in List II (ie, the State List) of the Seventh Schedule of the Constitution of India. Therefore, individual states have the authority to enact laws relating to betting and gambling. Most states in India have adopted the framework of the Public Gambling Act 1867 (PGA), the pre-independence gambling legislation that was enforced by the British Empire. The PGA prohibits all forms of gambling as well as the keeping of common gaming houses, while making an exception for games of skill, especially horserace betting. Betting on games of skill also falls outside the purview of gambling. While most states have adopted the PGA with no major changes per se, certain states have taken a more liberal approach by allowing gambling for stakes to be offered within their territories under various licensing regimes. These states are Goa (along with the union territories of Daman and Diu), Meghalaya and Sikkim. In order to prevent unregulated gambling, the laws of Goa, Meghalaya and Sikkim provide, among other things:
- for gambling to be offered solely under a licence; and
- that licensees must abide strictly by the conditions under which the licence was granted, failing which they will be liable for penal punishments as well as fines.
(c) The promotion of gambling as an ‘export' industry?
Indian laws currently do not deal with the promotion of gambling as an ‘export' industry.
2 Legal and regulatory framework
2.1 Which legislative and regulatory provisions govern gambling in your jurisdiction?
The Public Gambling Act 1867 (PGA) was the chief law governing betting and gambling activities before the Constitution was promulgated. Post-independence, most states adopted provisions of the PGA to formulate their own state betting and gambling acts, with some amendments to suit their social norms. The PGA prohibits gambling in all forms and prohibits gambling house operations. However, the PGA provides an exception for ‘games of skill', which are outside its ambit. The following states and union territories have their own laws:
- Andhra Pradesh: Andhra Pradesh Gaming Act, 1974;
- Arunachal Pradesh: Arunachal Pradesh Gambling (Prohibition) Act, 2012;
- Dadra and Nagar Haveli: Bombay Prevention of Gambling Act, 1887;
- Delhi: Delhi Public Gambling Act, 1955;
- Goa and Daman and Diu: Goa, Daman and Diu Public Gambling Act, 1976;
- Gujarat: Bombay Prevention of Gambling Act, 1887;
- Karnataka: Chapter VII of the Karnataka Police Act, 1963;
- Maharashtra: Maharashtra Prevention of Gambling Act, 1888;
- Nagaland: Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015;
- Meghalaya: Meghalaya Regulation of Gaming Act, 2021;
- Rajasthan: Rajasthan Public Gambling Ordinance, 1949;
- Sikkim: Sikkim Casino Games (Control and Tax) Act, 2002 and the Sikkim Online Gaming (Regulation) Act, 2008;
- Tamil Nadu: Tamil Nadu Gaming Act, 1930; and
- Telangana: Telangana Gaming Act, 1974; and
- West Bengal: West Bengal Gambling and Prize Competitions Act, 1957.
2.2 Which bodies are responsible for regulating and enforcing the applicable laws and regulations? What powers do they have?
The regulatory authorities with respect to various states and union territories are as follows:
- Goa: The commissioner of commercial taxes acts as the gaming commissioner.
- Daman and Diu: The director (tourism) of Daman and Diu regulates casinos.
- Meghalaya: The commissioner of taxes or any other officer authorised by the state government adjudicates offences under the Meghalaya Regulation of Gaming Act and the Meghalaya Regulation of Gaming Rules 2021.
- Nagaland: The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act appoints the finance commissioner of the state as the ‘licensing authority' for offering games of skill online.
- Sikkim: The regulatory authority under the Sikkim Act (for issuing licences for online games provided within the state-wide intranet of the state of Sikkim) and the Sikkim casino laws (for issuing licences for casinos) is the authorised officer under the Finance, Revenue and Expenditure Department of the Government of Sikkim.
- West Bengal: Permits (for conducting games of skill in a public place) are issued by the commissioner of police.
These regulators have the power:
- to issue licences to gaming operators subject to various conditions; and
- to adjudicate offences under the relevant gaming legislation.
The regulators also have the power to suspend and/or cancel issued licences in case of breach of provisions in the relevant gaming legislation.
2.3 What is the regulators' general approach in regulating the gambling sector?
The regulators of the gambling sector in India have implemented a strict enforcement regime and strict penalties are prescribed for any violations of the laws, especially in relation to issues such as:
- the prevention of money laundering; and
- the implementation of licensing conditions.
Under the current regime in India, a prospective licensee will be thoroughly scrutinised before being granted a licence. The regulators must be satisfied of the prospective licensee's ability to conduct the business of gaming while abiding by all applicable rules and regulations.
3 Definitions and scope of gambling
3.1 How is ‘gambling' defined in your jurisdiction?
Most of the state/union territory gambling laws in India do not define the term ‘gambling'. However, ‘gambling' has been defined under Section 2(1) of the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act as follows: "‘Gambling' means and includes wagering or betting on games of chance but does not include betting or wagering on games of skill."
Similarly, the term ‘gaming or gambling' has been defined under Section 2(1)(b) of the West Bengal Gambling and Prize Competitions Act as follows:
2(1)(b) ‘gaming or gambling' includes wagering or betting except wagering or betting upon a horse-race, when such wagering or betting takes place—
- in accordance with the terms and conditions of a license granted by the State Government under this Act,
- on the day on which the race is to be run,
- in an enclosure which the licensee of the race course, on, which the race is to be run, has set apart for the purpose under the terms of license granted under section 2C, in respect of such race course, or in any other place approved by the State Government in this behalf,
- with a licensed book-maker or by means of a totalisator as defined in section 14 of the Bengal Amusements Tax Act, 1922 (Ben. Act V of 1922).
3.2 What different types of activities are defined in the gambling legislation and what specific requirements apply to each? Please consider: (a) Betting (fixed odds/pool and spread)/betting on lotteries; (b) Gaming (house and ring games); (c) Lotteries/scratch cards and (d) The interface with financial products (if relevant).
(a) Betting (fixed odds/pool and spread)/betting on lotteries
The Meghalaya Regulation of Gaming Act defines the term ‘bet' in Section 2(e) as follows:
‘Bet' means any money or a valuable security or a thing staked by a person on behalf of himself or through an agent or any person procured or employed, acting for or on his behalf, to be lost or won on the happening or determination of an unascertained thing, event or contingency of or in relation to a game or sport and shall include acceptance of a bet.
However, the term ‘betting on lotteries' is not expressly defined in gambling laws in India.
(b) Gaming (house and ring games)
The term ‘common gaming house' is defined in the Public Gambling Act 1867 (PGA) as follows:
‘Common gaming-house' means any house, walled enclosure, room or place in which cards, dice, tables or other instruments of gaming are kept or used for the profit or gain of the person owning, occupying, using or keeping such house, enclosure, room or place, whether by way of charge for the use of the instruments of gaming or of the house, enclosure, room or place, or otherwise howsoever.
The term ‘gaming' is defined in the Meghalaya Regulation of Gaming Act as follows: "‘Gaming' means and includes Games of Chance and Games of Skill as defined in this Act."
Furthermore, the terms ‘games of chance' and ‘games of skill' are defined in the same act as follows:
2(j) ‘Games of Chance' mean all such games where there is a preponderance of chance over skill …
2(k) ‘Games of Skill' mean all such games where there is a preponderance of skill over chance, including where the skill relates to strategizing the manner of placing wagers or placing bets or where the skill lies in team selection or selection of virtual stocks based on analyses or where the skill relates to the manner in which the moves are made, whether through deployment of physical or mental skill and acumen, where the success in game depends on the existence of superior knowledge, training, attention, experience and adroitness of a player.
(c) Lotteries/scratch cards
The Lotteries (Regulation) Act of 1998 defines the term ‘lottery' as follows: "2(b) ‘lottery' means a scheme, in whatever form and by whatever name called, for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets."
The Arunachal Pradesh Lotteries (Regulation) Rules, 2013 further define the term ‘online lottery' as follows:
(2)(xix) ‘Online lottery' means a system created to permit players to purchase lottery tickets generated by the computer or online machine at the lottery terminals where the information about the sale of a ticket and the players choice of any particular number or combination of number is simultaneously registered with the central computer server.
(d) The interface with financial products (if relevant)
With respect to the interface with financial products, the terms ‘online gaming server' and ‘online gaming website' are defined in Sections 2(v) and 2(w) of the Meghalaya Regulation of Gaming Act, respectively, as follows:
2(v) ‘Online Gaming Server' means any main frame computer or set of computers, installed or maintained by the Licensee, at a central location or any location in the State of Meghalaya that accepts, processes, stores and validates wager or transaction and otherwise manages, monitors and controls the entire system.
2(w) ‘Online Gaming Website' means the non-restricted geo-fenced internet domain registration or URL address of the Licensee through which Games are conducted.
3.3 What are the main mechanisms and features of the control of gambling in your jurisdiction? What are the consequences of breach of the regulations, both for operators and for players?
In an effort to control gambling, the PGA provides that the following acts are offences punishable by a fine of INR 200 or imprisonment for up to three months:
- owning, keeping or managing a common gaming house;
- wilfully aiding in the operation of a common gaming house; or
- advancing money for the purpose of gaming with persons in such an establishment.
Anyone who is found to be in a common gaming house will be assumed to be present there for the purpose of gaming and will be liable to a fine of INR 100 or to imprisonment for up to one month.
The Andhra Pradesh Gaming Act stipulates a minimum fine of INR 500 and a term of imprisonment for at least one month for the first offence of an operator keeping a common gaming house. The prescribed penalties increase exponentially for subsequent offences to a maximum term of imprisonment for at least six months and a fine of at least INR 1,000, to prevent repeat offences. Anyone found in a common gaming house will be assumed to be there for the purposes of gaming and will be liable to a fine of INR 500 or imprisonment for up to one month.
4 Issues of jurisdiction
4.1 What approach do the courts take to the issue of jurisdiction? Where an operator which is physically outside the jurisdiction offers services to individuals within the jurisdiction, is such gambling treated as taking place offshore and outside the control of the authorities? If not, what triggers establish when such gambling is subject to the laws and control of your jurisdiction?
Jurisdiction is assumed by the Indian courts on the basis of cause of action and whether they have been granted the power to adjudicate a particular matter. Cause of action with respect to any player in India occurs at the point at which the funds are transferred. With respect to foreign operators and Indian players, therefore, any transfer of funds through the use of either international credit cards or international debit cards will amount to a violation of the Foreign Exchange Management Act, 1999, among other laws. This is because the Foreign Exchange Management (Current Account Transactions) Rules, 2000 (‘Current Account Rules') expressly prohibit current account transactions which involve any remittances to and from India relating to lottery prizes, racing or riding, lottery ticket purchases, football pools, sweepstakes and so on.
4.2 Can foreign operators provide remote gambling services in your jurisdiction without obtaining a licence? Can licensed domestic operators provide services overseas?
The Current Account Rules (see question 4.1) were drafted under the Foreign Exchange Management Act, 1999 to set appropriate limits on current account transactions involving foreign currency. According to the Current Account Rules, transactions listed in Schedule I therein are banned in India. Schedule I includes remittances from lottery prizes, racing or riding, lottery ticket purchases, football pools, sweepstakes and so on. It is thus effectively implied that gaming activities involving foreign currency are outlawed in India. Hence, it is not possible for an offshore gaming operator to offer its services inside India. With respect to domestic licensed operators that provide their services overseas, Indian laws only allow operators to provide their services in the territories in which such laws apply and do not allow local operators to provide their services overseas.
5 Remote versus non-remote gambling
5.1 Does the gambling regime in your jurisdiction distinguish between remote and non-remote gambling? If so, how are these defined?
The Public Gambling Act 1867 (PGA) is the main law governing gambling, which most of the state and union territories have adopted. The current regime does not distinguish between remote and non-remote gambling. All laws that are applicable to non-remote gambling are applicable to remote gambling and vice versa. Furthermore, there is no difference between paper-based and online prize contests under the Prize Competition Act of 1955. Such contests are usually held in newspapers and online.
However, the state of Kerala has distinguished between online and paper lotteries, prohibiting online lotteries within its territory while allowing paper lotteries. In its 5 November 2015 decision in All Kerala Online Lottery Dealers Association v State of Kerala, Writ Petitions (C) 641/2007 and 233/2010, the Supreme Court of India upheld the validity of a notification dated 22 April 2005 in which the state government permitted the sale of traditional paper lotteries, but banned the sale of computerised and online lotteries. The Supreme Court held that paper and online lotteries fall into different classes, and thus that a state can ban online lotteries while allowing paper lotteries or vice versa, without violating Section 5 of the Lottery Act.
5.2 Are there any restrictions on the media through which gambling can be provided (eg, internet/mobile telephony)?
Gambling services may be offered by licensees solely on the basis of the conditions set out in the licence. The gambling laws allow gambling services to be provided both physically and virtually online, as well as via telephone communication – albeit only in the territories in which the licence is considered valid. The Meghalaya Regulation of Gaming Act defines ‘online gambling' as follows:
2(u) ‘Online Gaming' means any gaming, where any player enters or may enter the game or takes or may take any step in the game or acquires or may acquire, by means of a telecommunication device or an electronic machine or instrument or apparatus, including the negotiating or receiving of any bet by means of a telecommunication device for money or money's worth which may also be held through non-restricted geo-fenced internet or at a physical premises.
Meghalaya, Sikkim and Nagaland are the only Indian states that have their own independent statutes regulating any form of online gaming and have legalised online gaming. On the other hand, the Telangana Gaming (Amendment) Act has banned online gaming in the state of Telangana in order to prevent people from playing gambling games online.
Lotteries in India can be provided by operators in the form of paper lotteries and online lotteries. However, such lotteries are exclusively state run, as private lotteries are outlawed in India.
6.1 What types of licences are available? Please consider: (a) Operators; (b) Activities (if relevant); (c) Premises; (d) Key individuals (if relevant) and (e) Equipment (if relevant).
Under the current regime, licences are available for operators of casinos in order to provide games of chance for stakes in the territories of Daman and Diu, Goa, Meghalaya and Sikkim. Furthermore, licences are available for operators seeking to offer games of skill such as poker, rummy and fantasy sports for stakes in the territories of Meghalaya, Nagaland and Sikkim.
With respect to lotteries, since only state lotteries are allowed in India and these are operated and promoted by state governments, private parties are invited by state governments to act as agents for the governments and to promote and market state lotteries through a tender process.
(b) Activities (if relevant)
The licensing regime in India provides for licences to be issued for gaming and gambling services to be offered by licensees through physical premises, as well as online via websites or mobile applications.
(d) Key individuals (if relevant)
(e) Equipment (if relevant)
6.2 Which bodies award and oversee such licences?
The bodies tasked with scrutinising licence applications and awarding licences to eligible applicants are listed below, together with the bodies/authorities that regulate the licensees.
|State/union territory||Type of licence||Licensing body/ authority||Overseeing body/ authority|
|Goa and Daman and Diu||Casino operators||State government of Goa||Gaming commissioner of Goa|
|Meghalaya||Licence for offering games of skill and games of chance for stakes, either physically or online||Commissioner of taxes, Meghalaya government||Commissioner of taxes, Meghalaya government|
|Nagaland||Licence for offering games of skill for stakes||Finance commissioner, government of Nagaland||State government of Nagaland|
|Sikkim||Licence for offering games of chance and games of skill online for stakes||Government of Sikkim||Government of Sikkim|
|Sikkim||Licence for running a casino||Department of Tourism, government of Sikkim||Government of Sikkim|
6.3 What are the key features of such licences (eg, term/renewal/any limit on overall numbers/change of control)?
A licence is typically valid for a period of five years from the date of issuance, provided that the conditions and restrictions prescribed vis-à-vis the licence are complied with by the licensee. These conditions must be strictly followed and the licence is subject to revocation in case of violation of the conditions or restrictions. Licensees must pay an annual licence fee as may be prescribed by the respective state government. For example, the annual licence fee in the state of Meghalaya is INR 20 million. After the expiry of the licence period, the licence may be renewed by paying a renewal fee at rates prescribed by the state government. In case of delay in payment of the licence fee, the licensee will be liable to pay a penalty at such rates as may be prescribed. For example, the penalty for delayed payment of a licence fee in Meghalaya is a fine of 18% per annum, in addition to the due licence fee.
The gaming laws also provide for the transfer of a licence upon an application being made by the current licence holder to that effect. A licence can be transferred by payment of a transfer fee. However, the transfer is subject to continued compliance with all conditions under which the licence was issued and such rules as may be prescribed by the state governments from time to time.
6.4 What are the substantive requirements to obtain a licence (eg, company established in the jurisdiction/physical presence/capitalisation?)
To obtain a licence, the following prerequisites must be met, which are broadly similar across the various gambling laws in India:
- The applicant must be an Indian citizen or a company incorporated in India, with the controlling stake held in India;
- The applicant must have at least five years' continuous experience of conducting games of skill and games of chance;
- The applicant must not have been blacklisted in any part of India for conducting games of skill and/or games of chance;
- The applicant must not have been implicated in or convicted of any offence, especially any offence under the Foreign Exchange Management Act 1999 or any money-laundering offence;
- The application must be submitted in the prescribed format along with the requisite application fee; and
- The applicant must submit certain documentation together with the application, such as:
- random number generation certification;
- software certification;
- company incorporation documents; and
- tax-related documents.
6.5 What are the formal and documentary requirements to obtain a licence?
Generally speaking, the following documents must be submitted when applying for a licence under the gambling laws of India:
- the applicant's memorandum of association and articles of association;
- supporting documents evidencing past experience in the gaming industry (minimum five years);
- audited financial statements with a valid certificate issued by a chartered accountant;
- details of the applicant's software technology platform; and
- the applicant's business plan and financial projections.
In addition, the applicant must undertake to abide strictly by all conditions that may be imposed by the licensing authority upon grant of the licence, as well as the provisions of the gambling laws and rules made thereunder.
6.6 What is the typical timetable for obtaining a licence?
An application, together with the requisite documents and evidence of payment of the application fee, will be scrutinised and reviewed by officers appointed by the state government/licensing authority. If everything is satisfactory and the officers are satisfied with the applicant's credentials, past experience in the gaming industry and ability to successfully conduct and offer games of skill and/or games of chance for stakes, the officers will recommend that the licensing authority issue the licence. If the officers feel that the application does not meet all applicable requirements, they can issue non-binding suggestions to the applicant to modify the application to address this, following which a licence may be issued after scrutiny of the modified application and supplementary documentation.
In Meghalaya, an application is forwarded by the commissioner of taxes to the ‘registered qualified person' (RQP) upon receipt. The RQP will scrutinise the application within 30 days and either endorse the issue of a licence or send the form back to the commissioner with recommendations which would make the applicant eligible for grant of the licence. Upon receipt of certification/recommendation from the RQP, the commissioner of taxes will forward this within 14 days of receipt to the licensing authority, which will either accept or reject the application. In case of rejection, the applicant will be given the opportunity to be heard by the licensing authority.
6.7 What costs are typically incurred in obtaining a licence?
|State/ union territory||Application fee||Licence fee||Bank guarantee (if applicable)||Royalty (if applicable)|
|Goa, Daman and Diu||Annual fee of INR 10 million to INR 40 million, depending on the size of the land-based casino.|
|Annual fee of INR 25 million to INR 40 million, depending on the size of offshore casino.|
|Sikkim||INR 500 for a licence to offer online games of skill.||Annual fee of INR 100,000.||INR 50 million, to be renewed annually.||1% of gross gaming yield. A penalty of 20% is levied if the licensee fails to pay such royalty by the 15th day of the following month.|
INR 100,000 for a provisional licence, which is valid for six months. This can be extended for a further six months upon payment of an additional INR 100,000;
A one-time payment of 50 million for five years.
|10% of the gross gaming yield or INR 10 million, whichever is higher, for the first year; followed by an incremental increase of 15% every year in respect of minimum assured revenue for the remaining four years of the licence.|
|Nagaland||INR 50,000||INR 1 million per game per annum or INR 2.5 million for per annum three games or more for the first three years, followed by INR 2 million per game per annum or INR 5 million for three games or more for the subsequent two years of the licence||0.5% of the gross revenue generated.|
INR 100,000 for a provisional licence which is valid for up to six months;
An annual fee of INR 20 million for an annual licence, to be paid within one month of the commencement of each financial year
|INR 20 million, to be renewed annually.||A quarterly payment of 2% of the gross gaming revenue, to be paid by the 15th date of the following quarter, failing which a penalty of 2% per month will be levied, on condition that the same is paid within one month of the following quarter. Further delay in payment makes the defaulter liable to a penalty equivalent to 20% of the royalty due and payable.|
7 Ongoing compliance
7.1 What are the operator's rights and obligations under the licence?
The operator must abide by the provisions of the applicable legislation and the rules and regulations made thereunder, as well as ensuring strict compliance with the conditions under which the licence has been granted. It is only through continued compliance that the operator is entitled to operate its gambling operations legally. Upon grant of a licence, the operator can also advertise the fact that it is a valid licence holder that can offer gambling services within the territory in which the licence is valid.
7.2 Can licences be transferred? If so, how? What restrictions apply?
The gaming laws provide for the transfer of a licence upon application by the current licence holder to this effect. The licence can be transferred upon payment of a transfer fee. However, the transfer is subject to continued compliance with all conditions under which the licence was issued, as well as such rules as may be prescribed by the state government from time to time.
7.3 What requirements and restrictions apply to the different types of gambling facilities in your jurisdiction?
The basic restrictions on advertising are discussed in question 9.
Operators of gambling facilities cannot provide their services to players who are located outside the territory in which the respective licence is valid. The details of the licence must be prominently displayed by the operator in its physical premises. Where services are provided online, the website/online portal should also prominently display the licensing information. Furthermore, the computer systems through which operators conduct their games must be certified by the state government/licensing authority, as the case may be.
Operators must additionally ensure that accurate and duly verified know-your-customer information for each customer is obtained and a record of this is maintained throughout the course of their business. Operators must also devise and deploy fool-proof systems for detecting and effectively countering fraudsters, to prevent players from suffering undue financial harm. Physical and virtual gambling facilities must also prominently display guidelines on responsible gaming for the benefit of customers.
It goes without saying that transparency in terms of transactions must always be maintained by gambling facilities. Therefore, facilities should ensure that all payments made online using debit/credit cards, Unified Payments Interface, e-wallets or similar comply with the applicable rules and regulations of the Reserve Bank of India. Cash transactions are allowed only up to a certain limit (eg, INR 25,000 in Meghalaya).
8 Penalties and sanctions
8.1 What penalties and sanctions are available to the authorities for breach of the gambling legislation?
In addition to the fines and penalties set out in the Public Gambling Act 1867 (PGA), the act provides for the imposition of fines of up to INR 500 and imprisonment for up to one month where a person arrested for having been found in a gaming house refuses or fails to give his or her name and address, or gives a false name and address.
|Meghalaya Regulation of Gaming Act, 2021|
|1.||Any contravention of the provisions of the act/rules||Fine of up to INR 200,000.|
|2.||Obtaining a licence through misrepresentation or deliberate misdeclaration||Fine of up to INR 200,000.|
|3.||Breach of licensing conditions by a player while playing games||Fine of INR 10,000 for the first three violations; thereafter, the player will be prohibited from participating.|
|4.||Operating unlicensed gambling operations||Imprisonment for up to two years and a fine of up to INR 200,000.|
|5.||False or misleading advertising||Fine of up to INR 100,000.|
|6.||Failing to keep or submit accounts or submitting false or incorrect accounts||Fine of up to INR 200,000.|
|Telangana Gaming (Amendment) Act, 2017|
|Imprisonment up to one year and a fine of up to INR 5,000. The penalties increase exponentially for each subsequent offence.|
9 Advertising and marketing of gambling
9.1 What requirements and restrictions apply to the advertising and marketing of physical and remote gambling in your jurisdiction? Do these vary depending on the type or location of the activity, or the medium through which it is carried out?
Licensed gambling services can only be advertised in valid licence territories. Ads that are in violation of the law or that (directly or indirectly) disseminate information that is forbidden by law are prohibited under the Advertising Standards Council of India Code. Any kind of advertising that aims to enable or promote gambling is prohibited in most Indian territories. Games of skill, on the other hand, are exempt from these constraints. The advertisement of prize competitions is forbidden unless the competent authorities have given their permission.
Content-related rules apply to games and gaming websites in India, as well as to gambling operators' websites and physical premises in Meghalaya, Nagaland and Sikkim. The following rules apply:
- Gaming ads may not depict anyone under the age of 18;
- Gaming ads must carry a disclaimer that the game involves an element of financial risk and may be addictive;
- Ads should not suggest that online gaming can be used as an income opportunity or an alternative employment option; and
- Ads should not suggest that people who engage in gaming activity are in any way more successful than others.
The following general restrictions also apply:
- Ads must include the gaming operator's website or physical address;
- Ads should not be directed to anyone who is under the age of 18;
- Ads should not be directed at any jurisdiction in which online gaming is prohibited;
- Ads should not be offensive or indecent, or contain any pornographic material; and
- Ads should be based on facts.
10 Consumer protection
10.1 What social responsibility obligations apply to land-based and remote gambling operators in your jurisdiction? Do these vary depending on the type or location of the activity, or the medium through which it is carried out?
No strict responsibility or obligations apply to gambling operators in India. However, various self-regulatory industry organisations – such as the Indian Federation of Sports Gaming and the All-India Gaming Federation – have issued player safety measures, such as age gating. In addition, the Reserve Bank of India mandates that know-your-customer information be sought, verified and compiled by operators for the purposes of all financial transactions. Operators must be transparent, which means they must continually disclose:
- the rules, mechanics and terms and conditions of all games; and
- the terms and conditions of the gaming platform.
Misleading advertising and ads that spread misinformation among customers are strictly prohibited.
The obligations of these self-regulatory bodies are general in nature and do not vary according to location.
10.2 What other general consumer protection requirements are of relevance for gambling operators in your jurisdiction?
In addition to the requirements listed in question 10.1, gambling operators must comply with the Consumer Protection Act 2019.
11 Financial crime
11.1 How does the gambling regime interface with money laundering/terrorist financing/proceeds of crime legislation in your jurisdiction?
Money laundering is prohibited in India under the Prevention of Money Laundering Act, 2002 (PMLA). Furthermore, Foreign Exchange Management Act (FEMA) regulations expressly prohibit the exchange of foreign currency in transactions which involve gambling or lotteries. Thereby, the PMLA and FEMA are the two main laws which seek to prevent the proceeds of gambling operations in India from being utilised for illegal activities. Both the FEMA and the PMLA are enforced very strictly. The maximum punishments under the PMLA for money-laundering offences are imprisonment for between three and seven years and a fine of up to INR 500,000. FEMA violations attract penalties of imprisonment for up to five years and a fine of up to three times the amount of a particular transaction.
12 Non-gambling activities/social gambling
12.1 What specific activities, if any, are exempted from the gambling regime in your jurisdiction (eg, prize contests/sweepstakes/free prize draws/e-sports)?
All games of skill are exempt from the gambling regime. These include horse racing, card games such as rummy and poker (in most jurisdictions), fantasy sports and e-sports.
12.2 How is ‘social gambling' defined in your jurisdiction and how is it regulated (if at all)?
While there is no definitive definition of ‘social gambling' in India, this is considered to refer to games of chance, such as teen patti, which are played in India among family and friends who have gathered for other purposes, such as festive occasions. Alternatively, social gambling can also include playing games of chance on social media networks, but without any money changing hands.
13 Disputes and legal enforceability
13.1 Are gambling contracts enforceable as a matter of law?
Contract law is governed by the Indian Contracts Act of 1872. Section 30 considers wagering agreements unlawful and states that "no suit shall be brought for recovering anything alleged to be won on any wager". As a result, gambling contracts cannot be enforced in India.
13.2 In which forums are gambling disputes typically heard in your jurisdiction? What issues do such disputes typically involve?
As outlined in question 13.1, gambling disputes are not enforceable under the Contract Act.
13.3 Have there been any recent cases of note?
14 Trends and predictions
14.1 How would you describe the current gambling landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The courts have struck down as unconstitutional amendments made by the Karnataka and Tamil Nadu government which prohibited the act of offering games of skill for stakes. Appeals against these judgments are pending adjudication before the Supreme Court of India.
According to a Statista study, the Indian gaming sector was valued at INR 49 billion in 2021, which is expected to increase by a further INR 11 billion by 2025. According to figures in the proposed Online Gambling (Regulation) Bill, 2022, the value of India's online gaming market might reach $5 billion by 2025. The new bill defines ‘online gaming' as any game played on an electronic device, such as a computer, mobile phone, tablet or other similar device. The bill does not distinguish between games of skill and games of chance. It proposes that a central agency be established to regulate online gaming, but provides no details on the types of games that should be regulated. This would do more harm than good.
Additionally, it is proposed that the rate of goods and services tax that is levied on gambling operators in India be increased to 28%, with retrospective application. This would be one of the highest rates in the world, increasing tax liability across the board for all gambling operators. If this is implemented, the gaming industry will suffer, as more players will seek to play through untaxed illegal avenues, thereby increasing black market activity.
15 Tips and traps
15.1 What are your top tips for gambling operators in your jurisdiction and what potential sticking points would you highlight?
The applicable laws and regulations represent a significant compliance burden for gambling operators in India. Games of chance are still largely looked down upon in Indian society and are not yet accepted as a form of entertainment. The threat of gambling addiction is a real concern for most gambling operators, as they are blamed by society as financial predators that seek to profit from the losses of customers. Therefore, gambling operators must strictly enforce responsible gaming and gambling practices by offering counselling services to customers and making them fully aware of the financial risks of gambling. In addition, gambling operators must be fully compliant with all requirements of the applicable laws and should be proactive in cooperating with investigative authorities if approached for information relating to financial crimes.
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