Is online gaming with real money legal or illegal in India?
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The online gaming industry in India is a strange beast. On the one hand, it is one of the country's fastest-growing sectors; on the other hand, real money games involving money are banned in most Indian states. Despite the legal ambiguity surrounding the industry, a KPMG report predicted that online gaming would reach 29,000 Crores in revenue by 2025, with over 65 Crores users, and employ 70,000+ professionals directly and uncountable others indirectly.
In fact, in the past five years, three Indian gaming giants entered the 'Unicorn Club.' Dream11 was the first fantasy sports company that reached the coveted $1 Billion valuation in 2019. Mobile Premier League (MPL) became India's second gaming unicorn in 2021, while Games24x7 became the latest entrant to the 'Unicorn Club' in March 2022.
Because real money online gaming has high revenue potential, there is a strong push being made to regulate and legalise it. But that's easier said than done. Indians have a rather complicated history with online games that tread the line between 'games of chance' and 'games of skill.' This is especially true in the context of card games. While card games like rummy and poker are integral to Diwali parties, they are simultaneously viewed as gambling when played in casinos or for stakes.
Online gaming is, for all intents and purposes, not prohibited by law. But it has not been legalized either. As the situation stands now, state governments can decide whether or not to allow online gaming with stakes or real money. Andhra Pradesh, Arunachal Pradesh, Telangana, Odisha, and Assam have prohibited all forms of real money online games.
Tamil Nadu and Karnataka had also imposed a blanket ban on the industry, but the bans were overturned by the High Courts of the respective states. Both state governments challenged their respective High Court judgments in the Supreme Court, and the matter is currently sub judice.
While Karnataka is awaiting the Supreme Court verdict, Tamil Nadu went ahead with implementing yet another legislation to ban online skill games. The state's legislative assembly passed the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022. Still, the date the law will come into effect is yet to be announced.
Kerala, too, had tried to ban online rummy, but the state's High Court struck down the notification.
While these states have prohibited online gaming, there are a few states where real-money online games are legal.
Goa is considered the country's gaming capital and, along with Sikkim, is an Indian state that legally permits casinos. The Goa, Daman, and Diu Public Gambling Act, 1976, dictates the state’s gambling laws and has provisions for offshore casinos while allowing land-based casinos only at Five-Star hotels. A booming casino industry exists in the coastal state and is monopolized by six offshore casinos.
Online gambling is legal in Sikkim under the Sikkim Online Gaming (Regulation) Rules 2009. The state government can issue licenses to operators desiring to offer online gambling services to the state. Sikkim is also the only other state, besides Goa, with fully functioning casinos.
West Bengal furnishes a straightforward judicial diktat for real money gaming. Real money games derive their legal basis from the West Bengal Gambling and Prize Competitions Act, 1957, section 2 (1) (b), which explicitly excludes games like poker, rummy, bridge, and nap from the ambit of gambling.
With the legality of the online gaming industry varying from state to state, the future of the domain heavily rests on the decision of the Supreme Court in the pleas of the Tamil Nadu and Karnataka governments challenging the decisions of their respective High Courts.
