Introduction
India's online gaming industry has experienced unprecedented growth over the past decade, becoming one of the fastest-growing segments in the digital economy. With millions of users engaging in various forms of online gaming, from fantasy sports to skill-based games, the regulatory landscape has evolved significantly to address the complexities of this burgeoning sector [01]. The regulation of online gaming in India represents a delicate balance between fostering innovation, protecting consumers, ensuring fair play, and addressing concerns related to gambling and addiction. [02]

Historical Context and Legal Foundation
The Public Gambling Act, 1867
The regulatory framework for gaming in India originates from the colonial-era Public Gambling Act of 1867 ("PGA"), which was the primary legislation governing gambling activities for a long period. This legislation prohibited betting and gambling involving games based predominantly on chance [03] but did not prohibit games based predominantly on skill [04]. However, the antiquated nature of the PGA, predating the digital revolution by over a century, has created significant challenges in addressing modern online gaming platforms. The fundamental distinction established by the PGA between "games of skill" and "games of chance" continues to be the cornerstone of online gaming regulation in India. Games of skill, which require substantial skill, knowledge, and judgment, are generally permissible, while games predominantly based on chance are considered gambling and are largely prohibited.

Constitutional Framework
After India gained independence and adopted a federal structure, gambling activities became subject to State laws. The Constitution of India allocates the subject of "betting and gambling" to the State List (Entry 34 of List II) [05], granting primary authority to the State Governments to regulate gambling activities within their territories. This constitutional arrangement has resulted in a patchwork of state-specific regulations, creating a complex regulatory environment for both physical and online gaming operators [06].

The Skill vs. Chance Debate
Legal Precedents and Judicial Interpretation 
Hon'ble Indian Courts have consistently upheld the skill vs. chance distinction, with several landmark judgments shaping the legal landscape. It has been held that games requiring substantial skill are not gambling, even if they involve an element of chance [07], such as Poker [08] or Rummy [09], as they involve substantial skill and cannot be classified as gambling [10]. It has also been held that gambling activities, specifically prize competitions, are protected under the fundamental right to trade and profession [11] and freedom of trade, commerce, and intercourse [12]. The Hon'ble Supreme Court held that gambling, being outside the scope of commerce, is not a trade or business and therefore not protected. [13]

Fantasy Sports
Fantasy sports have emerged as a significant category within the skill-based gaming ecosystem. These platforms allow users to create virtual teams of real players and compete based on the actual statistical performance of those players. The Hon'ble Indian Courts have generally recognized fantasy sports as games of skill, provided they meet certain criteria: the outcome depends primarily on the skill, knowledge, and judgment of participants; the element of chance is subordinate to skill; and success requires research, analysis, and strategic decision-making.

The IT Rules 2021 Amendments: A Watershed Moment
Background and Development 
On 06 April 2023, the Central Government, through the Ministry of Electronic and Information Technology ("MeitY"), provided much-awaited regulatory clarity to the online gaming industry by amending the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 ("Amendment Rule") [14]. This Amendment Rule sought to regulate online gaming by mandating their verification, registration, and transparency regarding privacy policies as well as user agreements.

Key Features of the Gaming Amendments 
The Amendment Rule proposes a self-regulatory structure for the online gaming industry. Broadly, online games [15] played for real money that are deemed 'permissible' may be offered in India [16]. The verification of the permissibility of these games will be done by Self-Regulatory Bodies ("SRBs") recognized by MeitY [17]. The self-regulatory framework includes Self-Regulatory Bodies, where MeitY may notify several SRBs or 'online gaming self-regulatory bodies' for verifying an 'online real money game' as a 'permissible online real money game'. SRBs are responsible for establishing and enforcing industry standards for fair play, responsible gaming, and consumer protection. Hence, recently, the All India Gaming Federation ("AIGF"), the Federation of Indian Fantasy Sports ("FIFS"), and the E-Gaming Federation ("EGF"), who are the appointed SRBs, have jointly signed a 'Code of Ethics' (CoE). This CoE is based on global best practices and lays down a strong framework for responsible gaming such as age-gating, adopting stringent KYC, and enabling user-set spending limits and self-exclusion. The CoE is aimed at enforcing consistent standards of user safety across the industry through the implementation of responsible gaming and advertising policies and mandates annual third-party audits and comprehensive reporting mechanisms to ensure accountability and transparency. This CoE applies to all online gaming operators who are members of the federations and offer skill-based real-money gaming services in India [18]. The framework also includes compliance monitoring through regular audits and compliance checks to ensure adherence to prescribed standards.

Online Gaming Intermediaries
The Amendment Rule introduces the concept of Online Gaming Intermediaries ("OGIs") [19], which are platforms that host or facilitate online games. The Amendment Rule only allows 'permissible online games' to be hosted and offered to users in India [20]. The due diligence obligation to ensure this has been placed on the 'OGI' [21]. The key obligations for OGIs include due diligence requirements, ensuring only permissible games are offered [22]; user verification, implementing robust KYC (Know Your Customer) procedures; grievance redressal, establishing effective complaint resolution mechanisms [23]; and transparency, publishing clear terms of service and privacy policies [24].

Permissible Online Games
The Amendment Rule defines "permissible online games" as those that do not involve wagering on any outcome [25], are games of skill as verified by SRBs [26], comply with applicable laws [27] and regulations, and do not promote gambling or betting [28].

Registration and Compliance Requirements
Online gaming platforms must register with designated SRBs, obtain verification certificates for their games, implement responsible gaming measures, maintain detailed records of transactions and user activities, and submit regular compliance reports.

State-Level Regulations and Variations
Permissive States
States like Goa [29] and Sikkim [30] allow licensed gambling, but only in designated physical locations or via regulated online platforms. These states have established comprehensive regulatory frameworks for both land-based and online gambling. Furthermore, Nagaland [31] and Meghalaya [32] have enacted specific legislation for skill-based gaming, providing a licensing framework for fantasy sports and other skill games.

Restrictive Approaches
Several states have taken more restrictive approaches. Tamil Nadu [33] initially banned online gaming entirely but later revised its position to allow skill-based games while maintaining restrictions on chance-based games. Andhra Pradesh and Telangana have implemented comprehensive bans on online gaming, including both skill and chance-based games [34]. Karnataka has oscillated between permissive and restrictive approaches, currently allowing skill-based games while prohibiting gambling [35].

Regulatory Challenges and Enforcement
Jurisdictional Complexity
The federal structure of Indian governance creates significant challenges in the regulation of Online Gaming. These include inter-state transactions, where online gaming transcends state boundaries, creating enforcement challenges; and conflicting State laws, where varying state regulations create compliance difficulties for operators.

Consumer Protection Concerns
Key consumer protection issues include technology and innovation, where rapid technological advancement outpaces regulatory development; addiction and problem gaming, which involves protecting vulnerable users from gaming addiction; data privacy, safeguarding user personal and financial information; financial fraud, preventing fraudulent practices and ensuring secure transactions; and fair play, ensuring games are conducted fairly without manipulation.

Enforcement Mechanisms
Enforcement of online gaming regulations involves regulatory audits, which are regular compliance checks by SRBs and government authorities; financial monitoring, tracking monetary transactions for suspicious activities; technology solutions, using Artificial Intelligence and Machine Learning for fraud detection; and inter-agency coordination, collaboration between different regulatory bodies.

Taxation Framework and Challenges 
The current tax structure of online gaming in India involves multiple components. This includes Goods and Services Tax ("GST") of 18% on platform fees [36] and 28% on the full face value of paid entry tournaments [37]. Income Tax specifies that winnings above INR 10,000/- are subject to 30% Tax Deducted at Source [38], and professional gamers may be subject to different tax rates. Some states impose additional taxes on gaming activities [39]. Tax compliance challenges have been highlighted by many experts, citing multiple tax obligations across different jurisdictions, coupled with heavy taxation and legal uncertainties, which are affecting the viability of gaming businesses.

Specific Regulatory Considerations for Fantasy Sports
Fantasy sports occupy a unique position in India's gaming landscape, generally recognized as skill-based activities. However, regulatory approaches vary, with the Central Government generally supportive of skill-based fantasy sports [40], the Hon'ble Courts pronouncing judicial precedents supporting skill-based classification, while States implementing specific regulations for fantasy sports.

Advertisement 
Several key advisories have been issued to ensure responsible promotion and prevent misleading content. The Advertising Standards Council of India ("ASCI") introduced guidelines specifically aimed at Online Gaming advertisements ("ASCI Guidelines"). This move was designed to curb misleading ads and ensure transparency for consumers. Essentially, the ASCI Guidelines emphasize that marketing needs to be clear, fair, and not make promises it cannot keep [41]. Furthermore, in April 2023, the Ministry of Information and Broadcasting ("MIB") issued a strong advisory to all stakeholders in the industry [42]. The core message was to steer clear of any advertisements or promotional material related to betting or gambling, regardless of the form. This indicates a clear push to distance online gaming from gambling activities in advertising. Thereafter, in March 2024, MIB further tightened the reins, specifically targeting endorsers and social media influencers, as they were urged to refrain from promoting or advertising offshore online betting and gambling platforms [43]. This highlights the increasing scrutiny on influencer marketing and the responsibility individuals hold when endorsing such platforms.

Key Regulatory Requirements
Key regulatory requirements include responsible gaming, which is the implementation of spending limits and cooling-off periods; age restrictions, with a minimum age requirement (typically 18 years); transparency, requiring clear disclosure of rules, prize structures, and odds; and fair play, involving measures to prevent insider trading and collusion.

Industry Standards and Best Practices
Leading fantasy sports platforms have adopted industry associations establishing ethical standards, features for self-exclusion and spending controls, user awareness programs about responsible gaming, and robust security measures for user information.

Recent Developments and Future Outlook
Proposed Central Legislation 
In 2024, the Central Government expressed intent to introduce a Central Online Gaming Regulation Bill, but as of the date of this piece, it is still under consultation. This proposed legislation aims to create a unified regulatory framework, establish clear definitions and standards, provide regulatory certainty for the industry, and enhance consumer protection measures.

Challenge to GST of 28% on Online Gaming
The Hon'ble Supreme Court is currently reviewing a challenge to the Central government's decision to classify skill-based Online Games as "actionable claims" for the purpose of GST. Online gaming companies are arguing against the application of a 28% GST, specifically contending that participation fees should not fall under the "actionable claims" category. When the GST Council amended the Central Goods and Services Tax Act to levy a 28% GST on the total entry fee for all online gaming, regardless of whether it is a game of skill or chance, the said change was applied retrospectively from August 2017. Following this, the Directorate General of GST Intelligence ("DGGI") issued show-cause notices to online gaming firms, demanding the retrospective 28% GST on the full-face value of bets. Consequently, several companies have appealed to the Supreme Court, challenging both the retrospective tax imposition and the interpretation of Rule 31A of the CGST Rules [44].

Emerging Technologies and Regulation
The regulatory framework must evolve to address the regulatory approach to crypto-based gaming, Artificial Intelligence powered gaming experiences and fair play concerns, immersive gaming platforms and associated risks, as well as international gaming platforms and jurisdictional issues.

Conclusion
The regulation of Online Gaming in India represents a complex and evolving landscape that seeks to balance multiple competing interests. The introduction of the Amendment Rule marks a significant step toward establishing a comprehensive regulatory framework, providing much-needed clarity for industry participants while emphasizing consumer protection and responsible gaming practices. The journey toward effective online gaming regulation in India is ongoing, with several key areas requiring continued attention. The proposed central legislation, if enacted, could provide the unified framework necessary for the industry's sustainable growth while addressing state-level regulatory variations. However, success will depend on effective implementation, adequate enforcement resources, and continued stakeholder engagement. A well-designed regulatory system can foster innovation, protect consumers, and position India as a global leader in the online gaming sector. Conversely, overly restrictive or poorly implemented regulations could stifle growth and push activities into unregulated channels.

References
[02] Tanu Shree Saxena, New Regulations for Online Gaming, Cyber Peace.
[03] §§ 3 and 4, Public Gambling Act, 1867.
[04] § 12, Public Gambling Act, 1867.
[05] Art. 246 read with Item No. 34, List II, Seventh Schedule, Constitution of India. Art. 246 acts as a rulebook that divides responsibilities between the Central Government (Parliament) and State Governments, for the purpose of implementation of law, thereby making a clear demarcation of who gets to decide what, as it dictates the legal landscape one’s business operates within.
[06] Many States have implemented their own laws for regulation of betting and gambling including Assam (Assam Gaming and Betting Act, 1970); Mumbai (Bombay Prevention of Gambling Act, 1887); Goa, Daman and Diu (Goa, Daman and Diu Public Gambling Act, 1976); Karnataka (Karnataka Police Act, 1963); Madhya Pradesh (Madhya Pradesh (C.P.) Public Gambling Act, 1867) and Madhya Bharat Gambling Act, 1949; Orissa (Orissa Prevention of Gambling Act, 1955; Public Gambling Act, 1867 (applicable to Uttar Pradesh, Punjab, Delhi and Madhya Pradesh); Punjab (Punjab Public Gambling Act, 1867); Sikkim [Sikkim Online Gaming (Regulation) Act, 2008 amended vide Sikkim Online Gaming (Regulation) (Amendment) Act, 2024]; Tamil Nadu (Tamil Nadu City Police Gaming Rules, 1949 and Tamil Nadu Gaming Act, 1930); Andhra Pradesh (The Andhra Pradesh Gaming Act, 1974 and The Andhra Pradesh Gaming Rules, 1976); Delhi (Delhi Public Gambling Act, 1955); Jammu & Kashmir (The J&K Public Gambling Act, 1977) Kerala (The Kerala Gambling Act, 1960); Meghalaya (The Meghalaya Prevention of Gambling Act, 1970); Pondicherry (The Pondicherry Gaming Act, 1965); Rajasthan (The Rajasthan Public Gambling Ordinance, 1949); West Bengal (The West Bengal Gambling and Prize Competitions Act, 1957 and The West Bengal Gambling Rules, 1958; Uttar Pradesh (Uttar Pradesh Public Gambling Act, 1961); Nagaland (Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2015 and the Nagaland Prohibition of Gaming and Promotion and Regulation of Online Games of Skill Rules 2016) and Haryana (Haryana Prevention of Public Gambling Act 2025).
[07] K.R. Lakshmanan v. State of Tamil Nadu [(1996) 2 SCC 226].
[08] Indian Poker Association v. State of Karnataka [WP No. 39167-39169/2013 (GM-Police)]; Junglee Games India (P) Ltd. v. State of Tamil Nadu [2021 SCC Online Mad 2762]; Dm Gaming Pvt Ltd v. State of UP, 2024 SCC OnLine All 5009, Order dated 29 August 2024].
[09] State of Andhra Pradesh v. K Satyanarayana [AIR 1968 SC 825].
[10] Varun Gumber v. Union Territory of Chandigarh [SLP (Civil) No. 26642/2017].
[11] Art. 19(1)(g), Constitution of India.
[12] Art. 301, Constitution of India.
[13] R. M. D. Chamarbaugwalla v. The Union of India [AIR 1957 SC 628].
[15] § 2(qa) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 defines the term ‘online game’ to mean a game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary.
[16] § 2(qd) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 defines the term ‘online real money game’ to mean an Online Game where a user makes a deposit in cash, or kind, with the expectation of earning winnings on that deposit (“ORMG”). On the other hand, § 2(qe) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 defines the term ‘permissible online game’ to mean a permissible ORMG or any other Online Game that is not an ORMG. 
[17] § 2(qf) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 defines the term ‘permissible online real money game’ to mean an ORMG verified by an Online Gaming SRB. The procedure for verification has been laid down under Section 4A of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[19] § 2(qb) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 defines the term ‘online gaming intermediary’ to mean any intermediary that enables the users of its computer resource to access one or more Online Games.
[20] § 3(1)(b)(ix) and § 3(1)(b)(x) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[21] § 3 of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[22] Supra Note 16. 
[23] § 3(2) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. 
[24] §§ 3(1)(a) and 3(1)(b) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[25] § 4(11) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[26] § 4A(3)(a) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[27] §§§ 3 and 4 read with 4A(3)(a) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[28] § 3(1)(b)(ii) of The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
[29] Goa permits licensed on-ground operations of gaming activities as per Goa, Daman and Diu Public Gambling Act, 1976.
[30] The state of Sikkim allows the operation of casino games, such as roulette and blackjack, by obtaining a license under the Sikkim Online Gaming (Regulation) Act, 2008, with the condition that these games are offered exclusively through intranet terminals.
[31] In Nagaland, the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2016 governs poker as a skill-based game.
[32] In Meghalaya, The Meghalaya Regulation of Gaming Act, 2021 allows for both land-based and digital casinos.
[33] In Tamil Nadu, The Tamil Nadu Online Gaming Act, 2022 was enacted which banned all forms of online gambling, including skill-based games like rummy and poker. However, the Madras High Court in November 2023 in the matter titled All India Gaming Federation v. The State Of Tamil Nadu [W. P. No. 13203/2023], struck down the ban, ruling that the State Government could only regulate online gaming and not completely ban it. However, the court also stated that the act in question can only apply to games of chance, not games of skill like rummy and poker. Thereafter, on 07 February 2025, the Tamil Nadu Online Gaming Authority published the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 to address concerns surrounding online real money gaming addiction, financial risks, and the protection of vulnerable groups, particularly minors (“2025 Regulations”). The 2025 Regulations apply to online real-money games, which are defined as games where users make a deposit with the expectation of earning winnings. The 2025 Regulations aim to create a safer gaming environment by imposing strict controls on real-money gaming platforms operating within the State.
[34] In Andhra Pradesh, The Andhra Pradesh Gaming Act, 1974 prohibits all forms of online gambling, including games of skill. Similar to Andhra Pradesh, in Telangana, the Telangana Gaming Act, 1974, as amended vide The Telangana Gaming (Amendment) Act, 2017, prohibits all forms of online gambling.
[35] The Karnataka Police (Amendment) Act, 2021 (“2021 Amendment”) sought to ban online games of skill for money. However, the Karnataka High Court, in the matter titled Galactus Funware Technology Private v. State of Karnataka [WP No. 18703/2021 (GM Police)], declared the 2021 Amendment as unconstitutional. This decision highlighted the need for a balanced approach to regulating online gaming that respects the distinction between games of skill and games of chance.
[36] Report on GST on Online Skill based Gaming, Assocham & EY. The GST rate for supply of services is notified under notification 11/2017-Central Tax (Rate) dated 28 June 2017. Further, given that online games of skills do not fall under the category of ‘gambling’, the platform services operators predominantly consider their services to be covered under the heading 9984, which is currently taxed under GST at 18%.
[38] §§ 115BBJ, 194BA, Income Tax Act, 1961.
[39] Government Strengthens Regulations for Online Gaming to Ensure Transparency and User Safety, Ministry of Electronics and IT, Press Information Bureau, Government of India.
[40] Legal Framework: Gambling and Sports Betting Including in Cricket in India (2018), Law Commission Report No. Government of India.
[41] Game’s Up for Misleading Gaming Ads - Says ASCI, Advertising Standards Council of India.
[42] Ministry of I&B issues fresh Advisory warning against advertisements of betting and gambling, Ministry of Information and Broadcasting, Press Information Bureau, Government of India.
[43] Ministry of I&B cautions social media influencers against endorsing offshore online betting and gambling platforms, Ministry of Information and Broadcasting, Press Information Bureau, Government of India.

Disclaimer: The above article solely remits information and discusses relevant issues, it shall in no way be used for soliciting legal solutions. The information and/or observations contained in this article do not constitute legal advice and should not be acted upon in any specific situation without appropriate legal advice.