A Comprehensive Guide to Gambling Laws and Regulations in India

Table of contents

• Brief History of Gambling in India
• The Current Situation for iGaming
• General Standards for Regulatory Compliance
• Operator Licensing, Costs and Tax Overview
• Regulatory Gambling Authorities and their Role
• Opportunities and Future Outlook
• Explore New Gaming Frontiers in India

Disclaimer

This information is not intended to be legal advice and is solely extracted from open sources. It should not be relied upon as a substitute for professional legal advice, and Altenar does not accept any liability for its use.

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Are you curious about opportunities in India’s rapidly evolving gambling market? With over 1.4 billion people and a digital economy surging by 15% annually, you are right to be, but India’s market is complex and varied by state. 

Altenar unpacks key insights and regulatory essentials across the nation’s gambling sector in this detailed guide. From legal gaming activities to state licensing requirements, you will gain the knowledge to stand out in this emerging market and position your iGaming business for success.

Brief History of Gambling in India

Gambling in India has deep roots, with its first recorded evidence traced to the ancient texts of the Rigveda and Mahabharata. The Rigveda, one of India’s oldest scriptures, alludes to a form of dice play, reflecting gambling’s early integration into Indian culture. The epic tale of the Mahabharata notably depicts a pivotal game of dice, which dramatically altered the fate of the Pandava brothers and their kingdom, spotlighting the primary influences on societal narratives and decision-making.

Over the centuries, gambling in India evolved with each era, experiencing varying levels of societal acceptance. During the Mughal period, for example, gambling was embraced as a pastime among royalty and the elite, while colonial British rule introduced a different dimension. British administrators sought to control gambling by introducing the Public Gambling Act of 1867. This law criminalised the operation of public gambling houses while remaining ambiguous about skill-based games, leaving space for traditional Indian games to thrive.

As Indian society transitioned into the 20th and 21st centuries, attitudes towards gambling continued to shift. Increasing economic liberalisation and digital penetration set the stage for online gaming. However, the legal landscape remained complex. The Constitution of India 1949 handed over gambling regulation to individual states (Entry 34 of List II [State List] in the Seventh Schedule). It empowered states to legislate on betting and gambling activities, leading to a fragmented approach between states. Goa, Sikkim, and the union territories of Daman and Diu in the west regulate casino games in land-based form through specific state laws. Some, notably Nagaland and Sikkim, permit certain types of online gaming. Most other states, however, have leaned towards prohibition.

More recently, the rise of online gambling and fantasy sports has prompted new discussions around regulation. The Information Technology Act of 2000 and subsequent judicial rulings opened avenues for skill-based gaming online. Yet, concerns over legality persist, creating an environment where operators must tread carefully to remain compliant.

Timeline of Events

India's regulatory environment remains varied and evolving, with several significant moments punctuating its history.

1867:   Introduction of the Public Gambling Act
Public gambling was outlawed in the operation of gambling houses in British India.

1950:   Constitutional Transfer of Gambling Powers to States
Gambling regulation powers are handed to individual states through the Seventh Schedule.

1976:   Legalisation of Casinos in Goa
Land-based casinos allowed in designated five-star hotels and offshore vessels.

1998:   Introduction of Lotteries (Regulation) Act
A state authority was established to regulate and conduct lotteries within their territories.

2000:   Passage of the Information Technology Act
To address cyber activities impacting online gambling indirectly through digital crime provisions.

2005:   First Offshore Casino in Goa
Casino Royale launched, marking Goa’s entry into offshore casino gaming.

2008:   Sikkim Online Gaming Regulation Act
Regulated online gaming permitted in Sikkim, including casino and sports betting, within state limits.

2016:   Nagaland Online Games of Skill Act
Online skill-based games, like poker, rummy, and fantasy sports, permitted and regulated in Nagaland.

2017:   Supreme Court Clarification on Rummy
The court ruled that rummy is a game of skill and is legally protected from gambling bans.

2021:   Passage of the Meghalaya Regulation of Gaming Act
Legalised and licensed online and land-based gambling within state borders.

2022:   Tamil Nadu Online Gambling Ban
Implemented a ban on online gaming, mainly targeting games like poker and rummy.

2023:   Kerala High Court Reverses Online Rummy Ban
The state judiciary declared a state-imposed online rummy ban unconstitutional, citing the freedom to engage in skill-based games.

2024:   Ongoing Legislative Discussions on Online Gambling
Proposals currently emerging for a central framework to comprehensively address online gambling legality.

The Current Situation for iGaming

India’s iGaming scene in 2025 is complex, shaped by both historical regulations and recent legislative measures. Presently, the country operates under a federal framework that grants states the power to regulate gambling independently, as outlined in the Constitution’s Seventh Schedule (Article 246), List II—State List. Consequently, each of India’s 28 states has the power to regulate gambling and betting at the state level. In contrast, the federal government has the authority to regulate gambling in the eight union territories.

Altogether, 13 states run government-operated lotteries, while online sports betting and casino gambling are legal only in a few selected states, each possessing an independent regulatory framework. Sikkim, for instance, permits online games of chance and sports betting within its territory. Nagaland, on the other hand, focuses on regulating online skill games, such as poker and rummy, through its Prohibition of Gambling and Regulation of Online Games of Skill Act. Tamil Nadu, in contrast, has taken a stringent stance by prohibiting online poker and rummy despite having a regime in place to oversee online games from local providers.

The federal government’s introduction of online gaming rules in April 2023 set forth new compliance requirements for iGaming operators, while a controversial 28% Goods and Services Tax (GST) on online gaming, casinos, and horse racing in October 2023 has fuelled considerable debate among stakeholders. For international operators, navigating this intricate patchwork of regulations requires diligent adherence to state laws, while for local operators, these frameworks present opportunities to tap into the growing digital gaming market.

Overall, it is fair to say that India’s gambling sector is on a transformative path, with ongoing discussions around creating a more unified regulatory framework at the federal level, primarily to address online gaming challenges across state borders. The fragmented approach currently in place continues to challenge operators seeking a clear and consistent road in the Indian market.

State and Union Territories

Here is a snapshot of the regions with some form of legal gambling activity out of India's 28 individual states and eight union territories.

Legal State Lottery Games

India's gambling regulations allow state governments to organise lotteries, creating government monopolies in 13 states. These lotteries operate under the Lotteries (Regulation) Act of 1998, which provides specific guidelines for organising lotteries.

1. Assam
   Organises state-run lotteries under regulated conditions.
2. Arunachal Pradesh
   Permits both paper and online lotteries.
3. Goa
   Allows state-organised paper and online lotteries.
4. Kerala
   Known for its robust state lottery system.
5. Madhya Pradesh
   Only state-run paper lotteries are allowed.
6. Maharashtra
   Organises lotteries under strict regulations.
7. Manipur
   Offers state-run lotteries following national guidelines.
8. Meghalaya
   Allows both paper and online state lotteries.
9. Mizoram
   Operates paper and online lotteries.
10. Nagaland
    Permits paper and online lotteries.
11. Punjab
    Runs state lotteries adhering to national rules.
12. Sikkim
    Legalises and runs state lotteries.
13. West Bengal
    Offers state-run lotteries under regulated conditions.

Legal Online Gambling and Sports Betting

Certain states in India have developed specific frameworks for legal online gambling. Nagaland permits skill-based games such as chess, poker, and fantasy sports under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2016. 

Sikkim allows online casino games and sports betting, regulated through the Sikkim Online Gaming (Regulation) Rules, 2009. In contrast, Tamil Nadu prohibits online games of chance, including poker and rummy, although it has a regulatory regime for online games provided by game providers. 

Federal guidelines under the Information Technology Rules 2021 apply in states without specific regulations.

Legal Gambling in Other States

A number of states in India have legalised certain forms of gambling, primarily focusing on land-based casinos and horse racing. These states have either adopted specific legislation or followed judicial guidelines to permit and regulate these gambling activities. Here are the states where some forms of gambling are legal:

Land-based and offshore casinos

Goa and the union territory of Daman and Diu permit regulated casino gambling under the Goa, Daman, and Diu Public Gambling Act of 1976. Licensed casinos can operate in five-star hotels and offshore vessels, with land-based casinos offering games of electronic amusement/slot machines and offshore casinos permitted to provide table games and gaming under a licensing regime.

West Bengal: In West Bengal, skill-based games such as poker and rummy are explicitly legal. The state government permits these activities because they are skill-based games.

States Permitting Legal Horse Racing (Online and Offline)

Horse racing remains one of the few gambling activities legally permitted in several Indian states. The Supreme Court of India, in Dr. K.R. Lakshmanan v. State of Tamil Nadu (1996), ruled that horse racing is a game of skill, distinguishing it from games of chance and allowing its regulation under state laws. Betting on horse races is governed by state-specific legislation, with oversight from turf clubs and regulatory authorities. Furthermore, the Public Gambling Act of 1867 provides a broad legal foundation, although states have introduced their own laws to regulate the industry further.

Several states have official race clubs that oversee offline and online horse racing and associated betting operations.

• Maharashtra: Horse racing and pari-mutuel betting are regulated under the Maharashtra Betting Tax Act, 1925, with operations managed by the Royal Western India Turf Club (RWITC).

• Telangana: Horse racing is governed by The Telangana Gaming Act 1974, and betting is facilitated through the Hyderabad Race Club.

• West Bengal: Betting on horse racing is regulated under The West Bengal Gambling and Prize Competitions Act, 1957, with operations handled by the Royal Calcutta Turf Club (RCTC).

Each state has specific provisions allowing horse racing and associated betting under a strictly regulated framework. These turf clubs provide licensed on-site and online betting platforms, ensuring compliance with state taxation and gaming laws.

For more details on the legal framework governing horse racing betting, refer to The Public Gambling Act of 1867, which outlines the national gambling laws still applicable in many Indian states.

General Standards for Regulatory Compliance

Regulative complexity presents a significant hurdle for sportsbook operators in India. Each state has its own rules, while specific federal standards apply. Below, we outline the general criteria for operators seeking market entry.

Local Hosting and Infrastructure
In states like Nagaland, online operators must host their servers within India, ensuring operations and data are controlled domestically. In Sikkim, an online gaming system (OGS) accessible via the state’s intranet is required for regulatory compliance.

Licensing and Regulatory Compliance

Online gambling in India operates under state-specific licensing, with Nagaland, Sikkim, and Tamil Nadu regulating different forms of gaming. While Nagaland licenses online skill-based games, Sikkim allows online casinos and sports betting, and Tamil Nadu oversees local game providers. Operators must also comply with federal IT rules (2021), ensuring security, transparency, and approval from self-regulatory bodies for real-money gaming.

Data Reporting and Player Verification
In Sikkim, operators must maintain comprehensive data logs, including player identities, account activity, and timestamps for each game. Compliance also includes strict reporting on fund transfers and account changes, while identity verification is mandatory to prevent unauthorised access.

Technical Standards and Game Fairness
Both Sikkim and Nagaland require rigorous testing to ensure fairness and randomness in gaming systems. In Sikkim, operators must use certified systems that undergo specific randomness tests to ensure unbiased outcomes. Similarly, in Nagaland, applicants seeking a skill games licence must submit random number generation (RNG) and software certification documents as part of their licence application, ensuring compliance with regulatory standards.

Physical Presence and Local Partnerships
Although not universally mandated, establishing a physical office or collaborating with local legal experts is advisable. This helps operators overcome the complex local compliance environments and strengthen market presence within India’s regulatory framework.

AML Regulations

Operators must comply with India’s Prevention of Money Laundering Act (PMLA), 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, among other money laundering legislations. This includes due diligence for transactions above INR 50,000 (approx. $571) in one or several interconnected transactions, suspicious transaction reporting, and player identity verification using Aadhaar or passport identification to reduce illicit activities.

Advertising and Promotions

Advertising of gambling services is heavily regulated. Federal guidelines prohibit promoting non-licensed games, and disclaimers such as “Play Responsibly” are required in all advertising formats. In addition, the majority of the State Gaming Laws prohibit the publishing, printing, distributing, selling or circulating of any newspaper or other information with the intention of facilitating or aiding gambling (i.e., real-money games of chance). However, these limitations are not necessarily applicable to games of skill. 

Player Verification

Operators must implement solid player verification measures to comply with India's Anti-Money Laundering (AML) and player protection regulations. Section 11A(1) of the Prevention of Money Laundering Act, 2002, requires reporting entities to verify clients' identities through methods such as Aadhaar authentication, passport verification, or other government-notified identification modes. 

Banking and Payment Requirements

Payments must be processed through RBI-regulated channels, including credit/debit cards, net banking, and e-wallets, as required by Rule 9(4) of the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Rules, 2016. Cash transactions are permitted only if they comply with KYC (Know Your Customer) norms and are fully disclosed. Cryptocurrency remains unregulated, though virtual asset gains are taxed under India’s Income Tax Act of 1961.

Operator Licensing, Costs and Tax Overview

India’s approach to licensing and licensing costs varies significantly by state, with Nagaland, Sikkim, and Tamil Nadu each offering distinct regulatory frameworks.

Licensing by state

Nagaland

Nagaland grants licences for online skill games under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015, and its accompanying Rules, 2016. Under Rule 3(1), the state government may issue a licence to individuals, firms, or companies that meet the specified conditions.

Rule 3 (4) mandates that applicants ensure their operations—including technology support, platform management, and servers—are based in India. In addition, Rule 9(7) states that licensees may need to establish an office in Nagaland within 12 months of obtaining their licence.

The licensing fees, as outlined in Rule 11, are:

• INR 1 million (approx. $12,021) per game per year.

• INR 2.5 million (approx. $30,361) annually for a “bouquet” of games for the first three years.

• INR 5 million (approx. $60,123) annually for a bouquet of games for the following two years.

Sikkim

Sikkim regulates online gaming and sports betting through a five-year licence under the Sikkim Online Gaming (Regulation) Act, 2008. Licences are renewable and require an annual fee of INR 500,000 (approx.  €5,465) and a yearly bank guarantee of INR 50 million (approx. €546,500) as a security deposit with the government every year at the time of issue and renewal of the licence (Rule 6(3), Sikkim Online Gaming (Regulations) Rules, 2009 (Official Gazette, No. 54/2009). 

Licences can be renewed for a further period of five years upon the payment of a renewal fee (Rule 5(2), Sikkim Online Gaming (Regulations) Rules, 2009 (Official Gazette, No. 54/2009). (Official Gazette, No. 54/2009)

Online gaming operators can only operate through a statewide intranet, limiting access to players within Sikkim. This state also issues casino licences for five-star hotels, which are extended to authorised venues that meet strict infrastructural and operational standards.

Tamil Nadu

In Tamil Nadu, local providers can receive a certificate of registration through the Tamil Nadu Online Gaming Authority as per Section 10(1), Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022). The application fee is INR 100,000 (approx. €1,093) (Rule 3(2), Chapter II, Tamil Nadu Online Gaming Authority and Regulation of Online Games Rules, 2023), and licensing applies only to local operators who host games within the state. The authority places controls on online gaming activities and a clear differentiation between permissible skill-based games and prohibited games of chance.

Federal Taxation

The Goods and Services Tax (GST) and the Income Tax Act regulate India's online gaming and gambling tax structure. Effective October 1, 2023, the GST mandates a 28% tax on the total value paid by players to operators, covering online gaming, sports betting, and casino operations.

Players’ winnings are also subject to taxation under Section 115BBJ of the Income Tax Act, 1961. A 30% tax is levied on earnings from online gaming, affecting all winnings exceeding INR 10,000. This dual taxation framework underscores the importance of thorough compliance for operators targeting the Indian market.

It should also be noted that in addition to federal taxes, state taxes may also apply.

Regulatory Gambling Authorities and their Role

India’s gambling regulations are largely decentralised, giving individual states significant authority to establish their own rules and enforcement bodies. Several key regulatory authorities operate at state and federal levels, each influencing the gambling industry in specific ways.

Federal-Level Gambling Authorities

The following federal bodies shape India’s iGaming sector through digital regulations, financial oversight, and taxation policies, each impacting the operations of local and international operators.

Ministry of Electronics and Information Technology (MeitY)

MeitY plays a pivotal role in India’s digital gaming environment, mainly through its regulatory oversight of online activities under the Information Technology Act 2000. It sets rules for online content and enforces guidelines to curb illegal activities, including online gambling. MeitY’s 2023 rules established new compliance requirements for online gaming operators, impacting licensing, advertising, and data protection, thereby significantly shaping the regulatory framework for digital gaming across India.

Enforcement Directorate (ED)

The Enforcement Directorate (ED) operates under the Ministry of Finance and enforces the Prevention of Money Laundering Act (PMLA) concerning gambling and betting activities. It investigates illegal financial transactions, money laundering, and foreign exchange violations involving gambling operations. For iGaming operators, the ED’s oversight is a significant policy to adhere to, as non-compliance can lead to financial penalties, license revocations, and criminal investigations.

Central Board of Indirect Taxes and Customs (CBIC)

The Central Board of Indirect Taxes and Customs (CBIC) implements and collects the Goods and Services Tax (GST) on gambling activities. In 2023, CBIC enforced a 28% GST on online gaming, casinos, and horse racing, which reshaped the sector's economic dynamics. Compliance with CBIC’s taxation guidelines is essential for gambling operators, as it affects pricing strategies, revenue distribution, and tax liabilities, thereby influencing overall business sustainability.

State-Level Gambling Authorities

The following regulatory bodies play a central role in shaping India’s gambling industry on a state level, setting the standard for legal compliance in an evolving market.

Sikkim State Lotteries and Gaming Authority

The Sikkim State Lotteries and Gaming Authority oversees gambling regulations within Sikkim, focusing on land-based and online gaming. This authority was established to manage the state’s ambitious casino operations and online betting initiatives. Its role includes issuing licences, ensuring compliance with local gaming laws, and monitoring gaming operators. For iGaming operators, Sikkim’s Gaming Authority sets the standards for online betting, making it an instrumental regulator in a state where online gambling is legal.

Nagaland Authority Finance Commissioner

The Finance Commissioner of Nagaland is the state’s licensing authority for online skill-based gaming. It oversees compliance under the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015, and its Rules, 2016. Unlike the Lotteries and Gaming Authority, which focuses on state-run lotteries, the Finance Commissioner’s jurisdiction covers licensing and regulatory oversight for online skill games such as poker and rummy.

The Finance Commissioner plays a central role in maintaining a secure, legal, and responsible online gaming ecosystem in Nagaland by setting strict licensing and operational standards.

The Home Department of Goa

The Home Department for the State of Goa is the regulatory body supervising casino activities in the State. It was established to manage the state’s flourishing casino industry, which includes land-based and offshore casinos. The Commissioner is tasked with issuing and renewing casino licenses, regulating gaming operations, and maintaining standards of fairness and transparency. For operators, the Commissioner’s guidelines are key to maintaining compliance with Goa’s casino regulations.

The Turf Authorities of India (TAI) 

The Turf Authorities of India is a federation comprising six principal turf clubs that collectively govern horse racing activities across India. Each member club operates independently within its respective region to ensure the sport's uniformity in regulations nationwide. The member clubs are:

• Royal Western India Turf Club (RWITC) – Mumbai and Pune

• Bangalore Turf Club – Bangalore

• Hyderabad Race Club – Hyderabad

• Royal Calcutta Turf Club – Kolkata

• Madras Race Club – Chennai and Udhagamandalam (Ooty)

• Mysore Race Club – Mysore

Most Indian racecourses under TAI use the totalizator system, ensuring fair and transparent betting pools. This system distributes payouts based on actual bets placed, reducing the risk of fixed odds manipulation while offering credibility to wagering operators.

Directorate of Lotteries, Kerala

The Directorate of Lotteries in Kerala regulates the state’s government-run lottery system. Kerala’s lottery is one of the most significant in India, generating substantial revenue. The Directorate oversees the conduct of draws, distributes prizes, and ensures transparency. It also sets strict guidelines for local operators and vendors to ensure fair play and prevent fraudulent activities within the state’s lottery system.

Opportunities and Future Outlook

India's gambling sector offers significant potential for iGaming operators eager for early entry into an emerging gambling market in this strategic peninsula in southern Asia. With a population surpassing 1.4 billion and a digital economy growing at over 15% annually, the appetite for online gaming is on a clear upward trajectory. Rapid smartphone adoption and increasing internet penetration, currently at 47% and rising, have transformed India into one of the most exciting online casinos and sportsbooks markets.

States like Sikkim, Goa, and Nagaland are already leading the charge with progressive regulations, opening the door for operators to tap into India’s online gambling surge. According to industry reports, India’s online gaming sector is projected to grow to $8.6 billion by 2027, driven by increased consumer spending and digital entertainment adoption. As one industry insider noted: 

“The scale and potential of India’s iGaming market are comparable to no other, creating immense opportunities for those willing to navigate the complexities.”

However, gambling operators in India do indeed face several challenges, including strict advertising restrictions that hinder promotional efforts. The regulatory environment is fragmented, with each state holding varying stances on gambling, often leading to legal uncertainties and compliance complexities. Furthermore, the recent introduction of a 28% Goods and Services Tax on gambling operations significantly impacts operational costs, making it a key financial consideration. Payment systems are subject to stringent anti-money laundering regulations, adding another layer of scrutiny. These challenges require operators to adopt flexible strategies and maintain rigorous compliance to traverse the evolving Indian market successfully.

On a positive note, despite the challenges of a fragmented regulatory environment and the introduction of higher tax rates, these obstacles are balanced by the country’s growing enthusiasm for online gaming. Legalisation and regulation of skill-based gaming in several states provide additional avenues for market entry. Looking ahead, ongoing discussions around unified regulations and technological advancements could make India an even more attractive destination for ambitious iGaming operators. 

Market Advantages

• Expanding Digital and Mobile Reach
  Rapid smartphone adoption and increased internet penetration provide substantial access to online gaming.

• Massive Population with Growing Middle Class
  Has a growing population of over 1.4 billion people, with a rising middle class eager for digital entertainment.

• Skill-Based Gaming Legality
  States like Nagaland and Sikkim allow legal online skill-based gaming, opening avenues for entry.

• Young and Tech-Savvy Demographic
  India’s population includes a large segment of tech-savvy youth actively engaging in digital games.

• Emerging Regulatory Developments
  Positive legislative developments are occurring in states like Meghalaya and Sikkim, showing progressive market potential.

• Increased Investment in Payment Infrastructure
  India’s booming digital payment infrastructure supports fast and secure transactions for online gambling.

Market Disadvantages

• Fragmented Regulatory Environment
  Differing state-level laws create complexity and challenges for nationwide operators.

• High Taxation and Compliance Costs
  The recently introduced 28% GST on gaming activities raises operational costs.

• Ambiguities Around Online Betting Legality
  Some states have unclear or restrictive rules around online betting, posing legal uncertainties.

Explore New Gaming Frontiers in India

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