India Online Gambling Laws and Regulations: Are They Adequate?

India Online Gambling Laws and Regulations: Are They Adequate?

Being one of the most densely populated countries in the world, India has a large portion of its population interested in gambling. As every state in the country is independently deciding on the laws regulating the gambling sector, the main issue in India is the lack of unity between all states.

Last year, the need for a uniform legal framework across the entire country was confirmed by the Madras High Court. They noted that having a regulatory body that will oversee online sports in the entire industry will help decrease the number of illegal gambling cases in India. Nevertheless, the issue still remains the same in 2021, with many questioning the effectiveness of the current legal framework in the country. To better understand whether the current laws in the country are efficient in overseeing the gambling sector, you can take a look at this report about the regulation in India.

Overview of Gambling in India

According to the Federation of Indian Chambers of Commerce & Industry (FICCI) and EY, in 2020, the number of gamers in India surpassed 350 million. In addition to that, there was a 21% surge in transaction-based online gaming. What is more, the estimates for 2021 predict a 27% year-over-year increase.

Despite the constantly growing interest in gambling activities, under the 1876 Public Gaming Act, both offline and online forms of gambling are deemed illegal in India. Under that law, if a casino owner is caught offering gambling activities to individuals in India, the fine that must be paid accumulates to 200 INR. Alternatively, the operator may face an imprisonment of up to three months. Meanwhile, individuals who are caught breaking the law will be fined 100 INR or may be imprisoned for up to one month.

Despite the current legal status of gambling in India, the outdated law lacks a clear definition of ‘gambling’. As various activities are considered as simply games of chance, they cannot be deemed illegal under the 1876 Gaming Act. The vagueness of the law gives many loopholes that players in India use to still play various casino games.

Legal Status of Gambling in Different Indian States

As gambling is considered a sector that should be regulated individually by every state in India, we cannot put the entire gambling market in India under the same legislative umbrella. The Central Government is involved in the regulation of lotteries and social games that offer no real money prizes. Despite that, the Central Government is not dealing with issuing gambling licenses.

Since the gambling sector is regulated on a state level, some of the states in India can legalize certain games and even grant licenses for operation in the respective state. Another aspect of the state gambling regulation includes taxes on gambling and betting events, with every state deciding its own tax rates.

As of the time of writing this article, 13 states in India have legalized lottery games, while land-based casinos are allowed to operate in the states of Goa and Sikkim as well as in the Union Territory of Daman. With Goa being the first Indian state to take steps towards the legalization of brick-and-mortar casinos, it is currently the state with the most gambling parlors in India.

Despite offering quite the number of floating casinos, the state of Goa does not permit locals to participate in any gambling activities. In addition to that, the legal age of gambling has been raised to 21 and the local casinos are required to pay a 10% tax. While Goa offers only offshore casinos, Sikkim was the first state to introduce an onshore brick-and-mortar casino facility to players in India. Online gambling, sports betting, and virtual lottery games have also been legalized in the state of Sikkim.

While the Union Territory of Daman is currently offering only one onshore casino, it boasts the biggest brick-and-mortar casino in India. Another state that should also be mentioned is Nagaland as it has become the first state to issue licenses to online poker operators. In addition to that, the jurisdiction of Nagaland has also legalized fantasy games, further expanding the legal gambling sector in India.

Are Gambling Laws in India Adequate?

As mentioned above, there is no clear difference between games of skill and games of chance. This often leads to confusion and the outdated Public Gaming Act needs to be revised and provide a better definition of gambling which should be the same across all states in India.

Another thing the gambling sector in India is lacking is a proper regulatory body that will assess the compliance of licensed operators. There have been suggestions about some games being overseen by a self-regulatory organization or a national safe-harbor, similar to the regulatory model in countries like the US and Canada. Such a regulatory model, however, may not be very successful in India as the current law lacks clarity in many aspects. This is why India needs to review its gambling laws and work on improving the regulation of the sector across all states in the country.

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