Author: Kanishka Panwar, a student of NMIMS, Navi Mumbai
To the Point
- Online gaming in India has rapidly evolved from a casual leisure activity to a high-value digital industry. However, legal regulation around it remains unclear, inconsistent, and largely dependent on interpretations of whether a game involves “skill” or “chance.” With courts, state governments, and the central government all playing a role, the regulatory ecosystem remains fragmented. This article explores the legal and constitutional dimensions of online gaming in India, shedding light on the policy vacuum, the risks involved, and the urgent need for a unified legal framework.
Use of Legal Jargon
This article uses relevant legal terms such as:
- Games of skill vs. games of chance
- Article 19(1)(g) (Right to practice any profession)
- Article 21 (Right to life and personal liberty)
- Res extra commercium (activities excluded from commerce)
- Doctrine of proportionality
- Entry 34, List II of the Seventh Schedule (State subject under Constitution)
- Self-regulatory body (SRB) under the amended IT Rules, 2023
The Proof
- The Indian online gaming market was valued at ₹16,428 crore in FY 2023 and is expected to reach ₹37,000 crore by FY 2027 (Statista, 2023).
- States like Tamil Nadu and Telangana have attempted to ban online games involving money.
- The Ministry of Electronics and Information Technology (MeitY) amended the IT Rules in April 2023, introducing self-regulatory bodies and compliance obligations for online gaming platforms.
- Several landmark court decisions have clarified the legal distinction between skill and chance-based games.
Abstract
- The online gaming industry in India is growing rapidly, attracting millions of users and billions in investments. However, the legal treatment of online games—especially those involving real money—varies widely across states and is often caught in a regulatory grey zone. This article examines the existing legal framework, relevant constitutional provisions, landmark judgments, and recent government interventions. It aims to evaluate whether India’s legal response to online gaming is adequate, fair, and future-ready.
Case Laws
- Dr. K.R. Lakshmanan v. State of Tamil Nadu (1996) 2 SCC 226
The Supreme Court ruled that horse racing is a game of skill, setting a precedent that skill-based games enjoy constitutional protection.
- State of Andhra Pradesh v. K. Satyanarayana (1968 AIR 825)
Held that Rummy is a game of skill, even if stakes are involved.
- R.M.D. Chamarbaugwala v. Union of India (1957 AIR 699)
Laid the foundation for distinguishing between games of skill and chance. It upheld that skill-based games are not res extra commercium and enjoy protection under Article 19(1)(g).
- All India Gaming Federation v. State of Tamil Nadu (Madras HC, 2021)
The Madras High Court struck down the Tamil Nadu Gaming Ban Ordinance, ruling that the blanket prohibition on all online games, including games of skill, was unconstitutional.
- Play Games24x7 Pt. Ltd. v. Union of India (Delhi HC, 2023)
Reinforced that games like Rummy and Fantasy Sports are skill-based and not to be equated with gambling.
Main Discussion
- The Legal Distinction: Skill vs. Chance
The core of gaming law in India lies in this distinction.
- A game of skill is one where success depends predominantly on knowledge, training, attention, and experience.
- A game of chance is one where luck determines the outcome, regardless of the player’s ability.
Indian courts have consistently held that games of skill are legal, and playing them—even for stakes—is protected under Article 19(1)(g). However, the problem arises when this distinction becomes blurred, especially with new forms of gaming like hybrid models, loot boxes, and real-money games.
Legislative Framework
- The Public Gambling Act, 1867
An outdated colonial law that bans operating gambling houses. Many Indian states have adopted it, but it doesn’t cover online platforms or digital betting.
- State Laws
States have the power to legislate on “betting and gambling” under Entry 34, List II of the Constitution:
- Permissive States: Nagaland, Sikkim, Meghalaya allow and regulate online skill-based games through licensing models.
- Restrictive States: Tamil Nadu, Telangana, Andhra Pradesh have attempted blanket bans—even on skill-based games with stakes.
- The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023
Introduced by the Central Government:
- Requires online gaming platforms to register with Self-Regulatory Bodies (SRBs).
- SRBs must determine whether games are “permissible” (i.e., not involving betting/gambling).
- Platforms must ensure KYC, grievance redressal, addiction warnings, and age restrictions.
Issue: While the Centre attempts regulation, its authority to do so is being debated since gaming is a state subject.
Constitutional and Policy Concerns
- Article 19(1)(g): Courts have interpreted skill-based games to fall within the scope of professional or commercial activity protected under this article.
- Article 21: Addiction, suicides, and financial ruin from online gaming raise serious questions about the Right to Life and mental health.
- Federalism: A key issue is the clash between central IT rules and state-level gaming laws, which differ widely.
- Res Extra Commercium Doctrine: Some argue that gambling and betting are outside the scope of legal trade, but courts have ruled otherwise for games of skill.
Enforcement Challenges
- No unified regulator.
- Vague boundaries between skill and chance.
- Widespread illegal offshore betting websites.
- Poor user awareness and inadequate grievance redressal.
- Inconsistent application of state laws.
Conclusion
India’s legal stance on online gaming is undergoing a much-needed transition, but it still lacks coherence. While court decisions have protected games of skill, the absence of a unified, forward-looking regulatory framework has led to confusion and forum shopping. The new IT Rules offer a starting point, but a comprehensive National Gaming Act—enacted with consultation from states, industry players, and civil society—is the need of the hour. Such legislation must balance innovation, economic growth, and consumer protection, ensuring the industry can thrive without causing social harm.
FAQs
1. Is online gaming legal in India?
– It depends on the nature of the game. Games of skill are generally legal across India, even with stakes. Games of chance are often banned under state gambling laws.
2. Can state governments ban online gaming?
– Yes, states can regulate or ban gambling as per Entry 34 of List II. However, they cannot indiscriminately ban skill-based games, as clarified by courts.
3. What is the central government’s role in regulating online gaming?
– Through the IT Rules, 2023, the central government has begun regulating permissible online games and mandating self-regulatory oversight.
4. Are Fantasy Sports and Rummy legal in India?
– Yes. Multiple court rulings have confirmed that these are games of skill, not gambling, and are thus legal.
5. What are the key risks associated with online gaming?
– Addiction, financial loss, underage gaming, privacy issues, and lack of grievance redressal are major concerns.
