IndiaAre Indian Online Casinos Legal?
Technically, online casinos that originate in India are legal in three states. However, offshore casinos with foreign authority licences can offer online gaming to Indian players because there is a grey area for online Indian gambling laws. In this article, we’ll explore the legal aspects of online gambling in India so you can be sure whether you can sign up at a new online casino in India.
Are there any legal implications for me as an Indian to play on online casinos?
If you’re not sure what an online casino is, it’s a place where you can find many different casino games on one platform. In theory, gambling at offshore online casinos falls within the grey area - making it technically legal. Even with the massive boom of casinos in India - with stats showing that nearly 40% of internet users in the country gamble online - there hasn’t been a case where an individual has been charged or prosecuted for playing at an online casino. (1) You can therefore be fairly safe when playing at any of our handpicked best online casinos in India.
Having said that, if you’re caught breaching the current gambling laws in India, you may be fined INR 200 or face up to three months in prison.
History of online gambling in India
Gambling is almost as old as time. Some forms of betting were present in India even through the ancient Vedic texts (2). Technology introduced gambling to a new level where you could place bets on all types of games using an internet-connected device.
The Indian government’s regulations about gambling are old and don’t consider online gambling. As a result, it’s left to each state to decide whether gambling should be legalised. Goa, Sikkim, and Daman states can have proper casinos within their borders.
Only a few states have made explicit laws against online gambling. As of 2022, the states mentioned above also legalised online gambling, meaning sites could be launched while operated within those areas. However, there aren’t any laws prohibiting offshore casinos from offering gambling services to states across India.
Legal Framework for Online Gambling
Since the federal laws surrounding online gambling are so vague, each state within the country can establish a set of laws to regulate online gambling. Some regulations that offshore casinos must abide by to be legal include having their servers located in the country along with details about their licensing. Additionally, these casinos must support transactions with the Indian Rupee.
The Public Gambling Act of 1867
The year of this Public Gambling Act demonstrates how old its content is. Primarily, the laws under the act prohibit individuals from operating or managing a gambling house in a traditional sense (3). At its core, this act prevents people from betting on games of chance while leaving the door open for games of skills and lotteries.
Because the act was created and established long before the development of computers and the internet, there aren’t any laws addressing online gambling as we know it today. As a result, the act is a grey area, which is why each Indian state can establish its own regulations regarding online gambling.
The Public Gambling Act of 1867 is so important in India because it’s the only legislation the country has, from a federal perspective, regarding betting and gambling, and why it is still so important. In 2022, the Indian government announced plans to introduce a new gaming bill to replace the Public Gambling Act of 1867.
The Information Technology Act 2000
Also known as the ITA-2000 or the IT Act, it deals with cybercrime and electronic commerce. While online gambling technically falls under the latter, it does not directly address gambling or betting. The Act is left for interpretation by the courts, who have, to date, refused to address online gambling (4).
Offshore vs. Onshore Casinos
Onshore casinos are physical or online sites operating within the country’s borders. Only three states in India have legalised onshore casinos: Sikkim, Daman, and Goa. Online casinos can also operate from within these states without contravening the law.
Offshore casinos are those platforms that hold licences from foreign casino authorities such as the Malta Gaming Authority or the Government of Curacao. One of the key trust factors you must consider when joining a new online casino in India is its licensing.
Only these sites can operate throughout the country in states where online gambling is allowed. Additionally, these casinos are international sites and may run in various countries. However, they must support Indian Rupees as a payment method for acceptance in India.
The advantage of having a locally-operated casino is its connection to you as a player. These sites will be more in tune with your needs as an Indian player and offer you products and features that will suit your gambling preferences. The disadvantage is that local casinos won’t have the technology and software that offshore casinos do, making the playing experience inferior.
Offshore casinos have almost infinite budgets to develop attractive and sleek online casinos that will appeal to your eyes, apart from offering the products you may want. The bonus options available may be far greater than what you will receive from an Indian casino. However, other aspects like telephonic customer care support or having the site translated into Hindi may not be available globally.
The Impact of the 2021 Kerala High Court Decision on Online Gambling
The Kerala Gaming Act, 1960 (KGA) is an extension of the Public Gambling Act of 1867 and places several restrictions on people playing games and betting on the outcomes. The Kerala government had placed a ban on online rummy because stakes were involved. As such, they banned the companies that provided the online games.
However, in the case Head Digital Works Private Limited v. State of Kerala (2021), the petitioners argued that online games (in this case rummy) were a game of skill and, as a result, didn’t fall within the purview of the KGA. The specific parts of the acts and their provisions that the court considered are listed below.
- Section 2(2):
Pertains to gaming that involve any form of betting where there is a collection of funds and the winners receive rewards for their wagers. It also deals with any other acts that involve betting.
- Section 14:
This part of the act addresses games of skill in that it doesn’t apply to games where the players need skill and ability to control the outcome.
- Section 14A:
Lists the exemptions that the Government can make regarding any games it feels that primarily depend on skill.
It was clear that the Act didn’t apply to games where there was an application of skill from the player. The petitioners argued that the act allowed the government to exempt skill-based games but made no provisions to retract that exemption.
In this case, online games were compared to rummy played at clubhouses, where it’s deemed a game of skill, alluding to the fact that the same should apply to online games. Essentially, they wanted the notification that required them to ban their services declared illegal and violative.
Ultimately, the court ruled that rummy is a game of skill and should remain exempted from the KGA, irrespective of the wagers around it. Prohibition of online rummy was ruled as not a reasonable restriction under Article 19(6) of the Constitution.
How was online gambling in India before the Kerala High Court Decision?
Online gambling in India has always occupied a void between being legal or not (5). The country’s overarching gambling act didn’t address online gambling, which is where online casinos found a loophole. Of course, each state in India could either legalise or prohibit online gambling. The government of Kerala tried to end online gaming by banning casinos. However, the High Court of Kerala ruled in favour of those online gaming providers (6).
The significance of the decision and its potential ramifications
Apart from Head Digital Works Private Limited bringing the case against the Kerala government, other petitioners included Junglee Games India, Play Games 24 X 7, and Gameskraft Technologies (7).
The fact that the Kerala High Court ruled in favour of the gaming providers means there is now a precedent for other legal battles across India. Other states that want to bring online casinos to a halt will have difficulty with this recent ruling.
The creation of rules for Online Gambling in India in 2023
The Ministry of Electronics and IT in India stated that it would be adjusting its Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules in direct response to the increasing popularity of online gambling.
Firstly, it notes that online games must not contravene national gambling laws. Instead of establishing a regulator at a national level, the amendment suggests the creation of “self-regulatory” bodies that would oversee the industry. The body could consist of people from online gaming companies, a consumer education professional, and a public policy expert whom the Indian government nominates.
The body will create rules that protect children and users from self-harm. Like offshore regulators, these new organisations must enforce Know Your Customer (KYC) checks, establish a complaints process, and ensure the casino has an address in India (8).
The Role of Skill vs. Chance
Indian games law is divided into two categories - games of skill and chance. Games of skill are defined as more than simply gambling, regardless of how much money is wagered. If the player has to use their physical or mental abilities to contribute to the game’s outcome, it’s deemed a game of skill.
For example, rummy requires a level of skill where players must try to memorise the fall of the cards and know which cards to hold or discard to win the game. As such, it is not a game of luck but skill.
However, games involving random outcomes where players have no control over the outcome are deemed as games of luck. Games like Flush or Brag are based purely on chance.
State-Specific Regulations
The laws regarding online gambling vary in different states of India. For example, Telangana and Andhra Pradesh are pushing for banning online gaming. Any person breaking the law within these states can face fines or imprisonment.
These are the states where online gambling is legal to some extent.
- Sikkim - The government here can issue sports betting and casino licences to online operators. Both games of skill and chance are legal to bet on here.
- Goa - As a popular tourist destination, land and online casinos are legal.
- Daman and Diu - While online betting isn’t allowed, there are a few land-based casinos.
- Nagaland - If you’re playing games like poker and rummy with a degree of skill involved, they are legal as part of the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act of 2016.
- Meghalaya – Skilled online games are legal in this state.
Legal Challenges and Court Decisions
Online casinos have faced a battle with lawmakers in India. Since there’s no national law against online gambling directly, offshore sites can provide casino games to local players.
Obtaining wins from the High Court in Kerala has helped online gaming providers get a legal platform when providing games to Indian players. With these legal results going in the favour of online casinos, you can expect more providers to capitalise on these court decisions.
FAQ
Yes, in some states, those casinos with offshore licences are legal in India.
If you access a casino in a state where it’s illegal, you could be fined or face imprisonment.
It’s mandatory that companies have servers in the country with a physical contact address. As such, Indian players have a level of protection. Additionally, offshore casinos must have proper licence with conditions regarding the fairness of games and tools to support responsible gambling.
No, but the Indian government is considering creating a new gambling bill to support its original Public Gambling Act of 1867.
Future Outlook of the Legality of Indian Online Casinos
When considering what a future for new online casino in India may look like, most sites will have to abide by the regulations of the states they want to operate in. The Indian government is in the process of adding to their current gambling laws. Hopefully, they will realise the revenue generation that online gambling can bring to the country. If the federal regulations allow for online gambling, it will lead to more providers inshore and offshore, creating platforms as fast as possible.
Before you sign up for an account on an online platform, you must ensure that it’s not a blacklisted ,untrustworthy site and that it’s legally allowed to operate in the country. Accordingly, you can enjoy all your favourite games without fear of breaking the law.
Resources & Sources
1) Online Gambling in India: Is it Legal?, Legal Service India, accessed 8 November 2023, <https://www.legalserviceindia.com/legal/article-7324-online-gambling-in-india-is-it-legal-.html>
2) Compulsive gambling in ancient Indian texts, National Library of Medicine, accessed 8 November 2023, <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2910357/>
3) Gambling in India, Wikipedia, accessed 8 November 2023, <https://en.wikipedia.org/wiki/Gambling_in_India>
4) The Gazette of India, eProcure, accessed 8 November 2023, <https://eprocure.gov.in/cppp/rulesandprocs/kbadqkdlcswfjdelrquehwuxcfmijmuixngudufgbuubgubfugbububjxcgfvsbdihbgfGhdfgFHytyhRtMjk4NzY=>
5) Are Online Casino Games Legal in India?, Legalkart, accessed 8 November 2023, <https://www.legalkart.com/legal-blog/are-online-casino-games-legal-in-india-#:~:text=In%20some%20states%2C%20it%20was,the%20passage%20of%20new%20laws>
6) Analysis of the ban on online rummy by Kerala High Court, iPleaders, accessed 8 November 2023, <https://blog.ipleaders.in/analysis-ban-online-rummy-kerala-high-court/>
7) Play Games 24 X 7 Private Limited vs State Of Kerala on 27 September 2021, Indiankanoon, accessed 8 November 2023, <https://indiankanoon.org/doc/11702299/>
8) India creates rules for online gambling, Igamingbusiness, accessed 8 November 2023, <https://igamingbusiness.com/legal-compliance/india-creates-rules-for-online-gambling/>