Online gambling in India is rapidly growing in popularity, with an increasing number of locals turning to remote casinos for their betting activities. This trend is partly the result of the internet boom the country has witnessed in recent years. Over 70% of the population has access to a high-speed internet connection.
The rising internet penetration in India has made it easier than ever for locals to gamble at offshore casinos from the comfort of their homes. Figures indicate around 40% of all Indians with internet access have gambled online, and some researchers claim that about 80% of the adult population gambles at least once per year.
The problem is that the legal status of gambling in India is complicated, and this complexity arises from the country’s administrative structure. As a federal union, India consists of 28 states and 8 union territories. Each administrative division has its own government, and state governments have the biggest say in what is legal. As a result, gambling regulations and legislation vary widely from one state to another.
Regulations in Indian States with Legal Gambling
The gaming enactments in most Indian states adhere to the Public Gambling Act of 1867, which prohibits casino gaming activities within their territories. At present, the only regions that host any form of legal gambling are Sikkim, Goa, Nagaland, Diu, and Daman. Let’s review the gambling laws and regulations in each of these territories.
Gambling Regulations in Sikkim
Gambling Regulations in Goa
Gambling Regulations in the State of Nagaland
Gambling Regulations in Sikkim
Sikkim is one of the few Indian states with legal casino gaming, which is regulated under the provisions of the Sikkim Casinos (Control and Tax) Act of 2002. The legislation covers various table and card games, including roulette, blackjack, and casino brag. The Sikkim state government has the authority to issue, suspend, and cancel licenses. Land-based gambling operations can be conducted only on the premises of five-star hotels.
Additionally, Sikkim is the only Indian state that offers legal and regulated online gambling, which falls under the provisions of the Sikkim Online Gaming (Regulation) Act that passed in 2008. Under this legislation, licensed operators can offer online keno and table games such as pontoon, baccarat, blackjack, backgammon, and roulette within the state’s territory. Placing bets on the outcomes of sporting events is also permitted in Sikkim.
Only companies incorporated in the country are eligible for gambling licenses in Sikkim. Regarding fees, Sikkim legislation requires operators to pay a provisional fee of ₹100,000 (roughly $1,360) along with a licensing fee amounting to ₹10,000,000 (around $134,680). The application fee for the online license is a nominal ₹500, or about $7.
Once an online applicant gains the approval of Sikkim authorities, the authorities issue a provisional license valid for twelve days. After the licensee sets up the infrastructure required for online gambling operations, the Sikkim government provides a regular operating license valid for five years.
The process is similar for land-based gambling operations in five-star hotels. Approved operators first receive provisional licenses that remain valid for half a year. When they have the necessary infrastructure in place and can commence casino games, they receive regular licenses upon paying a license fee of ₹50,000,000 (roughly $670,000).
Gambling Regulations in Goa
While digital gambling remains unregulated in Goa for the time being, the state permits various forms of land-based gaming. Similar to Sikkim, the state government has the authority to issue licenses to operators that wish to offer casino gaming in five-star hotels. Such gambling activities are also legal on the so-called floating casinos located on offshore cruise ships.
These activities fall under the legal scope of the 1976 Goa, Daman and Diu Public Act, which has undergone multiple amendments over the years. Approved licensees may operate electronic amusement machines, slots, and table games. However, a single license of this type covers no more than 20 slot machines. The licenses again have a five-year validity.
Regarding costs, applicants must pay licensing fees of ₹2,000,000 for land-based and floating casino activities upon approval. The number of machines or table games on the premises is irrelevant in this case. Approved operators must also pay annual license fees, which are subject to yearly increases.
At the time of writing, licensees must pay ₹25,000,000 per year (approximately $336,000) for every 100 m² of gaming floor space in five-star hotels. Those who operate gambling on floating casinos are subject to annual license fees of ₹70,000,000 (around $942,000).
Gambling Regulations in the State of Nagaland
As mentioned earlier, most Indian states prohibit the operation of chance-based games, with Goa, Sikkim, Diu, and Daman being the only exceptions. Skill games like poker are a different story. Skill-based versions of Texas Hold’em and Omaha poker are available across most Indian states.
Interestingly, in most administrative divisions no license is required to operate these games. As always, there are exceptions, and the same holds true for skill games in India. Operators may run poker games without licenses in all states except Telangana, Gujarat, Sikkim, Andhra Pradesh, and Nagaland.
Let’s examine how the state of Nagaland regulates such skill games, where poker operators must obtain a license. Nagaland legislation categorizes poker as a skill game under the provisions of the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act of 2016.
Nagaland is the only Indian state with a licensing regime for online skill games. Section 7 (4) states that licenses “shall be issued only to a person, company, entity, or firm that has no interest in any online or offline gambling activities” conducted in the country or abroad.
Apart from poker, the Nagaland Act classifies the following as skill games: chess, sudoku, bridge, quizzes, spades, rummy, and solitaire. Virtual sports also fall into this category and require a license, including virtual fighting, virtual wrestling, virtual boxing, and virtual combat games.
To acquire a license for skill games, a company must be incorporated in the country and hold a substantial stake there. Operators with a criminal history should not bother applying, as they will be denied licenses. In terms of costs, the state requires approved operators of skill-based games to pay an annual licensing fee of ₹1,000,000 (around $13,400) per authorized game or ₹2,500,000 for multiple games (around $33,700) during the first three years of operation.
During the next two years, each licensee must pay ₹2,000,000 ($26,900) annually per game or ₹5,000,000 ($67,400) for a combination of games. Either way, the licenses for skill games are valid for five years. When applying for a permit, applicants must submit a non-refundable fee of ₹50,000 (approximately $670).
Sports Betting Regulations in India
In India, wagering on horse races is also considered a game of skill because it requires evaluating the form of the jockeys, horses, and other variables. There is no specific regulatory body that governs horse-race betting, but operators may need a license from the respective state turf clubs. The laws in most Indian states exempt wagering on horse races from the definition of gambling under the Horse Racing Exemption.
Indian Turf Clubs and Sports Betting Regulation
Online Betting in India
Indian Turf Clubs and Sports Betting Regulation
However, this exemption is subject to certain conditions, such as whether the bet is placed on the day the horse runs. Physical race wagering is regulated by the turf clubs on whose premises the racing takes place. Punters can place wagers only within the enclosure the respective turf club has designated for betting. Consequently, land-based betting is prohibited outside the confines of the turf clubs.
Online Betting in India
Turf clubs operate race betting with licenses granted by their respective state authorities. Regarding betting on other sports, it is currently permitted only in Sikkim and requires a license under the provisions of the Sikkim Online Gaming (Regulation) Act. A licensed sports-betting operator may accept online wagers on sports, but only within the territory of Sikkim.
In several other administrative divisions, local authorities can prosecute punters who engage in unauthorized sports wagering. During the 2020 coronavirus pandemic, the states of Karnataka and West Bengal allowed the Bangalore and Calcutta Turf Clubs to offer online betting on races taking place on their courses. The Bangalore Turf Club, in particular, announced plans to launch a mobile app that would allow punters to bet on races on the go and receive payments through a virtual wallet.
Social Responsibility Policies in India
The laws in most Indian states do not include social-responsibility provisions for gambling providers because gambling is prohibited in the first place. In states where gambling is permitted and regulated, only players who have reached the age of majority (18 years old) may engage in such activities.
Self-Regulation of the Indian Gaming Industry
Preserving the Industry’s Financial Integrity
Self-Regulation of the Indian Gaming Industry
In the absence of formal social-responsibility requirements, gambling operators in India have taken the initiative to self-regulate and create their own social-responsibility policies. The country hosts several self-regulatory associations, such as the Indian Federation of Sports Gaming (IFSG) and the All India Gaming Federation (AIGF).
Under these self-regulation policies, gambling operators in India must implement player-protection measures such as age verification and self-exclusion. They must also keep records of all financial transactions initiated by customers and disclose their terms and conditions clearly and transparently.
Preserving the Industry’s Financial Integrity
The self-regulations also include provisions that govern the target audience, content, and duration of gambling-related advertisements. All authorized gambling operators must maintain financial integrity and comply with the Prevention of Money Laundering Act of 2002. This legislation requires them to keep detailed records of all financial transactions along with documents that verify their customers’ identities.
Finally, gambling-related debts are not enforceable in India. The Indian Contract Act of 1872, specifically Section 30, deems gambling contracts void. There are exceptions for certain prizes won in horse races, though.
Gambling Regulators in Different Indian States
As previously mentioned, India is a republic that comprises 28 states and 8 union territories, with gambling (when legal) being largely regulated at the state level. In the state of Sikkim, there are two separate regulators for remote and physical gambling. Online gaming and sports betting fall under the regulatory remit of the Finance, Revenue, and Expenditure Department, whereas the land-based sector is overseen by the Tourism Department.
Horse race betting in states other than Sikkim is regulated by the local turf clubs where the races take place. Skill games like poker lack specific regulators in most Indian states; the only exception is the state of Nagaland. The Nagaland Finance Commissioner issues the licenses for online poker and oversees skill-based gambling activities.
Closing Thoughts
To wrap things up, the regulatory landscape in India is complex because laws vary from state to state. Few states allow legal gambling, and the permitted forms of betting are again state-specific. State governments do not actively prosecute players who bet on offshore gaming sites. However, users still face issues predominantly related to failed payments and blocked domains.
The All India Gaming Federation (AIGF) has approached the country’s Prime Minister, requesting the Directorate of Enforcement (ED) to take action against foreign betting sites that serve locals without authorization. The organization argues that such websites operate in violation of the 2000 Information Technology Act.
To end on a more positive note, Indian punters could potentially see statewide legal sports betting in the near future. The question of whether sports wagering is based on skill is pending before the Supreme Court of India. If the court determines that sports wagering relies on skill rather than chance, it would most likely exempt it from state gaming enactments, allowing most states to offer it legally to their residents.
Self-Regulation of the Indian Gaming Industry
In the absence of formal social-responsibility requirements, gambling operators in India have taken the initiative to self-regulate and create their own social-responsibility policies. The country hosts several self-regulatory associations, such as the Indian Federation of Sports Gaming (IFSG) and the All India Gaming Federation (AIGF).
Under these self-regulation policies, gambling operators in India must implement player-protection measures such as age verification and self-exclusion. They must also keep records of all financial transactions initiated by customers and disclose their terms and conditions clearly and transparently.