Constitutional framework
“Betting and gambling” are covered under Entry 34, List II (the State List) in Schedule 71 to the Constitution of India2. This provides individual States with the exclusive authority to enact laws to regulate or prohibit betting and gambling within their respective territories. However, it is important to note that “lotteries” are expressly excluded from this ambit, as they are listed under Entry 45, List I3 (the Union List), thereby falling within the legislative competence of the Central Government.
Gaming laws — Central and State
The Public Gambling Act, 18674 (PGA) is a Central legislation enacted during the colonial era to regulate betting and gambling. Several States have adopted the PGA in its entirety by exercising their legislative powers under Entry 34, List II (the State List) in Schedule 7 to the Constitution.5
Conversely, several other States have chosen to enact their own distinct legislations to govern betting and gambling activities within their respective jurisdictions, rather than adopting the PGA in its original form. These State-specific enactments may vary significantly in terms of definitions, scope, regulatory mechanisms and enforcement provisions, reflecting the diverse socio-political and cultural considerations of each State. For the purposes of this Note, the term “gambling laws” shall be used to collectively refer to the PGA (as adopted and implemented by the respective States) along with the independent State legislations that govern betting and gambling across India.
A gaming law firm in India can assist stakeholders in navigating this fragmented legal landscape by providing insights into both Central and State-specific gambling laws, ensuring compliance and risk mitigation.
“Games of chance” vis-à-vis “games of skill”
The legal framework governing this area in India has its roots in colonial-era jurisprudence, particularly the principles underlying the PGA. A key feature of this framework is the distinction drawn between “games of chance” and “games of skill”. While wagering money or property on the outcome of a game of chance is strictly prohibited and attracts criminal penalties, staking on the outcome of a game of skill is not considered unlawful per se and may be legally permissible. This distinction has largely been retained by most Indian States in their respective gambling laws, which typically prohibit betting on games of chance while permitting participation in “games of skill”.6
Most of the gambling laws do not provide specific definitions as to which activities constitute “games of chance” or “games of skill”. Consequently, it becomes necessary to rely on authoritative judicial pronouncements to assess the nature of a game on a case-by-case basis. Notably, in two landmark judgments, the Supreme Court of India acknowledged that no game is entirely a “game of skill”, as virtually all games involve some degree of chance. Accordingly, the Court laid down the “dominant element” test, which is used to ascertain whether skill or chance plays the predominant role in determining the outcome of a game.7
This “dominant element” may be determined by examining whether factors such as superior knowledge, training, experience, expertise or attention of a player have a material impact on the outcome of the game. While the outcomes of any “games of skill” are affected by these factors, outcomes of “games of chance” are premised on luck and are largely independent of the skills of the players involved. Games which are substantially based on the skill of the players involved are considered commercial activities and afforded constitutional protection.
With particular reference to the game of rummy, the Supreme Court has held that successful outcomes in the game depend on the element and exercise of skill and has stating that it:
12. … requires certain amount of skill because the fall of the cards has to be memorised and the building up of rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of rummy is a game of entire chance. It is mainly and preponderantly a game of skill.8
Status of online gaming
It is crucial to recognise that the majority of India’s gambling laws were enacted well before the advent of the internet and are, therefore, primarily designed to regulate gaming activities conducted in physical locations, commonly referred to as “gaming houses”. These statutes largely fail to account for the unique characteristics of digital platforms and online modes of betting and gambling. As a result, there remains significant legal ambiguity regarding the applicability and interpretation of these outdated laws in the context of online gaming. The absence of express legislative provisions addressing digital or remote participation has led to varying judicial interpretations and inconsistent enforcement across States.
At present, only a handful of States, namely, Sikkim, Nagaland, Meghalaya, Telangana, Andhra Pradesh and Karnataka have taken legislative steps to address the legal status of online gaming. Among these, Sikkim, Nagaland and Meghalaya have enacted regulatory frameworks that permit online gaming under certain conditions, such as licensing requirements and restrictions on the types of games allowed. These States have recognised the potential of online gaming as a legitimate commercial activity, provided it is conducted responsibly and within the bounds of regulation.
On the other hand, the States of Telangana, Andhra Pradesh and Karnataka have taken a more prohibitive stance, treating online gaming on par with gambling conducted in physical premises. In these jurisdictions, all forms of betting or wagering whether online or offline are broadly prohibited under their respective gambling laws, with limited or no distinction made between physical and digital formats.
Judicial precedents
(1) The Supreme Court has rejected the classification of video games as “games of skill”, reasoning that the outcomes of such games could potentially be manipulated through tampering with the machines on which they are played. As a result, the players’ skill cannot be regarded as the dominant factor in determining the result of the game.9
(2) A Delhi District Court applied the same reasoning to online poker, observing that poker played for money in an online setting cannot be equated with playing the same game in a physical location. The Court noted that online play introduces the risk of manipulation through cheating and collusion, thereby increasing the element of chance in the game. However, as the petition was withdrawn by the parties prior to final adjudication, the Court’s observations in this matter do not carry any precedential value.
(3) Similarly, online operators of rummy platforms for stakes sought a review of the judgment by the Kerala High Court Division Bench which stated that the playing of rummy for stakes was an offence under the Kerala Gaming Act, 196010.11
(4) However, the High Court in Play Games 24×7 (P) Ltd. v. Ramachandran K.12 merely noted that the Division Bench was not concerned about the manner in which online games for stakes were being played and did not explicitly set out standards in this regard.
The status of whether a game of skill may be played for stakes is presently unclear, as various High Courts hold divergent views on the topic. A gaming attorney in India would closely monitor these developments, given their impact on the legality of real-money online gaming platforms.
(5) The Andhra Pradesh High Court held that a game of skill is excluded from the purview of the State gambling laws, and hence, even playing such a game for stakes or in a way that provides profits to the owners of the club would be so excluded. It held that as a penal provision, a strict interpretation is required, and “benefits of any loophole” is to be given to the accused.
Conclusion
The legal treatment of online gaming in India continues to reside in a grey zone, caught between dated statutes, divergent judicial interpretations, and evolving technological realities. While the distinction between “games of skill” and “games of chance” has long served as the legal touchstone, its practical application to online platforms has proven inconsistent and often inadequate. In the absence of a unified national framework, States have taken divergent approaches, some embracing regulation, others opting for prohibition, resulting in legal fragmentation and uncertainty for industry stakeholders.
Given the rapid growth of the online gaming sector and its significant economic potential, there is a pressing need for legislative clarity. A robust and uniform regulatory framework, one that balances consumer protection, investor confidence and innovation, is essential. Until such codification occurs, courts and regulators will continue to play a decisive role in shaping the contours of legality in this domain. As the sector matures, legal practitioners, policymakers and industry participants must engage in ongoing dialogue to ensure that the law keeps pace with technology and public interest alike.
*Founder & Managing Partner, Vidhisastras, Advocates & Solicitors.
1. Constitution of India, Sch. 7, Entry 34, List II.
3. Constitution of India, Sch. 7, Entry 45, List I.
5. 12 States/territories have adopted Public Gambling Act, 1867 as it is. These are: (i) Andaman & Nicobar Islands; (ii) Chandigarh; (iii) Dadra and Nagar Haveli; (iv) Haryana; (v) Himachal Pradesh; (vi) Lakshadweep; (vii) Punjab; (viii) Madhya Pradesh; (ix) Chhattisgarh; (x) Manipur; (xi) Mizoram; and (xii) Uttarakhand.
6. The States of Assam, Odisha, Kerala, Telangana, Andhra Pradesh and Karnataka are the exceptions to this rule. The respective gambling laws of these States restrict all forms of staking on any games, irrespective of whether it is for “games of chance” or “games of skill”.
7. See, State of A.P. v. K. Satyanarayana, 1967 SCC OnLine SC 333 and K.R. Lakshmanan v. State of T.N., (1996) 2 SCC 226.
8. See, K. Satyanarayana case, 1967 SCC OnLine SC 333.
9. See, M.J. Sivani v. State of Karnataka, (1995) 6 SCC 289. The “video games” referred to in this judgment are not a reference to online games, but rather to games played in physical gaming parlours that were prevalent in India until the 1990s. However, the possibility of the reasoning of the Supreme Court in this judgment being extended to the online sphere to label online gaming as “games of chance” cannot be ruled out.
11. See, Ramachandran K. v. Circle Inspector of Police, 2019 SCC OnLine Ker 6788.