According to thatvideogamesite.com, gambling in India is regulated both at the central level and under the authority of each state. Although the main Public Gambling Act (Public Gambling Act, 1867) is in force throughout the country, its application and age limits can vary significantly from one region to another. To clearly understand what can and cannot be gambled and at what age, it is necessary to understand the key legislation, the meaning of “game of chance” and “game requiring skill” and other nuances.
Public Gambling Act, 1867: The General Framework of the Legislation
The central law “An Act to provide for the punishment of public gambling and the keeping of common gaming houses” came into force in January 1867. It prohibits the keeping of public gambling houses and imposes fines or short-term imprisonment for engaging in gambling in such houses.
The most important provisions of the act are:
- Any place where people gather to bet using cards, dice or other devices is recognised as a ‘gambling house’;
- The penalty for running such establishments is a fine of up to ₹ 1,000 ₹ and up to a year in jail;
- Visiting a gambling house is punishable by a fine of up to 500 ₹ or up to six months’ imprisonment.
Each region is free to enact its own laws tightening regulations or introducing additional licences.
Distinguishing Between Lucky Play and Skill Play
Indian jurisprudence has confirmed that not all amusements are subject to the same prohibition regime. The Supreme Court has repeatedly distinguished between “games where the outcome depends mainly on chance” and “games where skill affects the outcome”.
- A pure game of chance is classified as completely prohibited under the Public Gambling Act. This includes roulette, fixed reel slot machines and lotteries unless they are separately regulated;
- Games of skill are exempted from prohibition by a number of court decisions. This category includes rummy, chess, poker, some variants of Victorian quizzes and modern cyber sports.
Due to this approach, some states (Nagaland, Goa, Sikkim) have created special licences to conduct ‘skill games’ online, which now form the backbone of the legal digital gambling industry.
Age Threshold for Participation
The minimum age for participation in gambling is determined by the law of each state and can range from 18 to 21 years of age. The general recommendation is that those under the age of 18 are not allowed access to betting on funds.
Most regions allow participation in state lotteries and betting on games that require skill once you reach the age of 18. The threshold for casinos in the state of Goa is 21 years of age. Amusement rides under the jurisdiction of Sikkim are also available from the age of 21. At the same time, some north-eastern states (e.g. Assam) have introduced a complete ban on gambling regardless of age under regional acts.
State Lotteries and Prize Competitions
Apart from gambling houses and online entertainment, state lotteries operate legally in India and are regulated by the Prize Competition Act, 1955. It prohibits any competitions with prizes in excess of 1,000 ₹ unless approved by the authorities. Each lottery must be authorised by the gambling department of the particular state.
Changes and New Legislative Initiatives
In the 21st century, the Public Gambling Act has been repeatedly criticised for being outdated and unincorporated online. In 2016, Nagaland passed a specialised law (Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act) regulating only recreational online games requiring skill. In 2009, similar rules were enshrined in the Sikkim Online Gaming (Regulation) Rules.
In 2022-2023, a number of states (Tamil Nadu, Karnataka) have passed or are drafting an act to prohibit pure chance elements in online gaming and introduce a licensing procedure for skill-game providers.
The Federal Information Technology Act 2000 partially addresses online activity, but the courts have not yet made a definitive assessment of the applicability of its individual sections to online gambling.
Taxation of Winnings
From the commencement of the financial year 2023-2024, the rules for taxation of betting income and winnings have changed in India.
- Goods and Services Tax (GST): from October 2023, the 28% rate applies to the entire amount paid by a participant for participating in gambling, including bets and coupons;
- Income Tax: Gambling profits are taxed at a rate of 30 per cent (section 115BBJ of the Tax Code), without the ability to write off losses on other items on the tax return.
These measures are aimed at creating harmonised requirements for operators and participants, as well as increasing tax revenues.
Controls and Penalties
In addition to the central act, each state establishes its own controls over the operation of gambling establishments. Violation of age limits, lack of licence and operating without registration are punishable by fines and possible imprisonment.
Example: Uttar Pradesh has a fine of up to 200 ₹ for engaging in illegal gambling and up to 3 months in jail.
And in Tamil Nadu, one can get up to one year imprisonment and a fine of up to 100,000 ₹ for organising purely casual online gaming.
Prospects for Reforms
A nationwide bill is being discussed for 2024-2025 to replace the Public Gambling Act and combine regulations on skill gambling, online betting and offline gambling. It is envisaged to introduce licensing and supervision at the federal level, as well as differentiation by type of games and age groups.