REAL-MONEY GAMING IN INDIA
India. 10 Games like Rummy, certain formats of Poker, and daily fantasy sports have been recognized as games of skill in India. Only certain Indian States like Nagaland, Tamil Nadu, Andhra Pradesh, amongst others, specifically extended their laws to cover online gaming, leaving uncertainty as to whether other State laws, which prohibit gambling in physical premises termed ‘common gaming houses,’ could be interpreted as applying to online platforms. Additionally, there are jurisdictional limits to State laws with respect to online activities. Accordingly, there was a strong need for a pan-India law dealing with online gaming, and a federal regulator for the industry, apart from such State-specific legislations. 11 Against this background, the MeitY, the Central Ministry for IT, was designated in charge of ‘matters related to online gaming’ on December 26, 2022. 12 Thereafter, MeitY introduced certain amendments to India’s IT laws under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”), which sought to introduce a light-touch co-regulatory framework for the real money gaming industry, through designation of self-regulatory gaming bodies (“SRB”). Three SRBs filed applications for designation under the IT Rules, however by late 2023, the applications had still not been determined, amidst reports of Government concerns that SRBs would be “heavily influenced by major industry players.” News reports suggested that MeitY sought to regulate the industry directly instead. 13 Hence, this framework was never operationalized. Now, the Act and Draft Rules seek to repeal these provisions of the IT Rules. 14 Thereafter, the Act was introduced. The preamble to the Act suggests that it was introduced for the following reasons: • To protect public health, particularly amongst the youth and economically disadvantaged, from harms caused by addictive game designs, manipulative features, bots, and
undisclosed agents that lead to financial and other damage; • To combat serious financial crimes such as fraud, money laundering, tax evasion, and terror financing, • To address aggressive marketing and promotional strategies by online real money gaming platforms, including endorsements by celebrities and influencers, which increase their reach and impact. • To overcome challenges posed by offshore gambling services that operate beyond the jurisdiction of individual States, leading to enforcement difficulties and inconsistent regulations across inter-State boundaries. The provisions of the Act and Draft Rules are geared towards the above objectives. Rules of the game: key features of the Act and Draft Rules Applicability The Act applies only to ‘online games,’ and does not cover physical/brick and mortar gaming activity, which continues to be regulated under State-specific legislations. It also has extra- territorial applicability, applying to both online gaming services offered from within India, as well as from outside the territory of India and offered in India. 15 Since only a Central law (and not State laws) can have extra- territorial applicability outside India, and given one of the key purposes of the Act is to address offshore gambling services offered from outside India, there was a need for a federal law explicitly applying to offshore gaming services. Establishment of the Online Gaming Authority of India and Appellate Authority The Act and the Draft Rules provide for the establishment of an online gaming authority of India (“OGAI”). 16 The OGAI is
10 Dr. K.R. Lakshmanan v. State of Tamil Nadu & Anr., (1996) 2 SCC 226 11 The scope of State Governments’ and Central Governments’ respective legislative powers with respect to gaming activity is the subject of a pend- ing matter before the Supreme Court in the case of DG GST v. Gameskraft Technologies Pvt. Ltd., SLP (C) No. 19366-19369/2023. 12 Amendment to Government of India (Allocation of Business) Rules, 1961 13 https://government.economictimes.indiatimes.com/news/technology/indias-gaming-future-a-battle- between-innovation-and-monopo- ly/121572612 14 Rule 11, Draft Rules 15 Section 1, Act 16 Rule 5, Draft Rules
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IMGL MAGAZINE | DECEMBER 2025
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