Gambling Laws in India: A Legal Framework Analysis

Introduction

The legal landscape governing gambling laws and betting activities in India presents a complex tapestry of central and state legislations, judicial precedents, and regulatory frameworks that have evolved over more than a century. The foundational principle underlying gambling regulation in India rests on the distinction between games of skill and games of chance, a differentiation that has shaped the jurisprudential approach to this contentious area of law. The current legal framework primarily stems from colonial-era legislation, which has been subsequently modified and adapted by various states to address contemporary challenges, particularly those arising from technological advancements and online gaming platforms.

The constitutional architecture of India delegates the power to legislate on “betting and gambling” to individual states under Entry 34 of List II (State List) of the Seventh Schedule to the Constitution of India. This federal structure has resulted in a diverse regulatory landscape where different states have adopted varying approaches to gambling regulation, creating a patchwork of laws that range from complete prohibition to regulated permissions under specific circumstances.

Historical Foundation and Central Legislation

The Public Gambling Act, 1867

The Public Gambling Act, 1867 [1] serves as the cornerstone of gambling regulation in India, though it has ceased to be a central legislation applicable across the entire territory of India. The Act was originally enacted to provide for the punishment of public gambling and the keeping of common gaming houses. Under this Act, a “common gaming-house” is defined as any house, tent, room, space or walled enclosure in which cards, dice, tables or other instruments of gaming are kept or used for the profit or gains of the person owning, occupying, using or keeping such house, tent, room, space or enclosure.

The Act imposes penalties including fines up to two hundred rupees or imprisonment for up to three months for operating gaming houses, and fines up to fifty rupees or imprisonment up to one month for persons found gambling in public places. However, the Act specifically excludes from its purview “any game of mere skill wherever played,” establishing the foundational principle that would guide subsequent judicial interpretations.

Currently, fourteen States and Union Territories have adopted the Public Gambling Act, 1867 in its original form, including Andaman and Nicobar Islands, Arunachal Pradesh, Chandigarh, Dadra and Nagar Haveli, Haryana, Himachal Pradesh, Lakshadweep, Punjab, Madhya Pradesh, Chhattisgarh, Manipur, Mizoram, Tripura, and Uttarakhand. Other states have chosen to enact their own comprehensive gambling legislations.

Judicial Interpretation: The Skill versus Chance Paradigm

The Chamarbaugwalla Precedent

The landmark judgment in R.M.D. Chamarbaugwalla v. Union of India [2] established the fundamental legal principle for distinguishing between permissible games of skill and prohibited games of chance. The Supreme Court held that competitions which substantially involve skills are not gambling activities but are commercial activities protected under Article 19(1)(g) of the Constitution of India. The Court applied the “skill test” to determine whether an activity constitutes gambling, establishing that the primary consideration is what dominates or preponderates – whether skill or chance.

The Court observed that when a question arises regarding the interpretation of gambling legislation, the legislature’s intention must be ascertained not solely from the literal meaning of words used but also considering factors such as legislative history, purpose, and the mischief it seeks to address. The judgment further clarified that gambling does not fall within the scope of Article 19(1)(g) of the Constitution, as it does not constitute legitimate trade or business activity.

The Satyanarayana Judgment: Rummy as a Game of Skill

In State of Andhra Pradesh v. K. Satyanarayana & Ors. [3], the Supreme Court definitively established that rummy is preponderantly a game of skill rather than chance. The Court examined whether the premises of the “Crescent Recreation Club” in Secunderabad constituted a common gambling house and whether the respondents found playing rummy could be said to be gambling.

The Court held that rummy requires a considerable degree 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.” While acknowledging that there is an element of chance in rummy similar to bridge (due to the shuffling and dealing of cards), the Court concluded that this alone cannot classify rummy as a game of chance. The judgment established that rummy is “mainly and preponderantly a game of skill,” thereby exempting it from the purview of gambling legislation under the games of skill exception.

State-Specific Legislative Frameworks

Gujarat Prevention of Gambling Act, 1887

The Gambling Act, 1887, which applies to Maharashtra and Gujarat by virtue of the Bombay Reorganization Act, 1960, prohibits and penalizes betting or wagering while providing specific exemptions. Under Section 3, the Act exempts “wagering or betting upon a horse-race or dog race” when conducted in licensed enclosures, and under Section 13, it exempts “games of mere skill wherever played.”

The Gujarat framework imposes stringent penalties for gambling violations. First-time offenders organizing gambling or maintaining gaming houses face a minimum of three months imprisonment plus a minimum fine of ₹500. Third-time offenders may face up to one year imprisonment and a minimum fine of ₹2,000. For individuals found gambling or present at illegal venues, first-time offenders face at least two months imprisonment and a ₹300 fine, while third-time offenders may face at least nine months imprisonment and a minimum ₹300 fine.

Kerala Gaming Act, 1960

The Kerala Gaming Act, 1960 [4] represents a state-specific approach to gambling regulation that has recently garnered attention due to judicial directions regarding online gambling. The Act provides for the punishment of gaming and keeping of common gaming houses throughout Kerala. Like other state acts, it contains an exception for “games of mere skill wherever played.”

Recent developments in Kerala highlight the challenges posed by online gambling platforms. The Kerala High Court, in a Public Interest Litigation filed by film director Pauly Vadakkan, directed the Kerala Government to take appropriate decision on including online gambling and online betting within the purview of the Kerala Gaming Act, 1960, within two weeks. The Court noted that the current Act does not extend its regulatory power to gambling, wagering, or betting games conducted through online platforms using electronic and communication devices, as the legislation was conceived for games conducted in physical “common gaming houses.”

The petitioner highlighted that online gambling games operated by platforms endorsed by celebrities attract audiences with false promises, primarily targeting middle to low-income people who are enticed to make easy money. The petition referenced a recent suicide of a Kerala youth after losing money in online betting, emphasizing the growing menace of unregulated online gambling in the state.

Sikkim’s Progressive Gaming Framework

Sikkim stands out as having one of the most liberal and well-regulated gaming frameworks in India, encompassing both physical and online gaming activities.

Physical Casino Regulation

The Sikkim Casinos (Control & Tax) Act, 2002 [5] authorizes the Government of Sikkim to grant licenses to businesses and individuals to operate casinos within the state. The Act specifically limits casino operations to five-star hotels and has restricted the number of casino licenses to two. The Sikkim Casino Games (Control and Tax) Rules, 2007, made under Section 18 of the Act, provide detailed regulations for games of chance played using machines or instruments in five-star hotels.

In July 2016, the Government of Sikkim issued a notification banning local population from playing in casinos situated in the state, restricting casino access to tourists only.

Online Gaming Regulation

The Sikkim Online Gaming (Regulation) Act, 2008 [6] represents the first Indian legislation to expressly permit and regulate online gaming. The Act, along with the Sikkim Online Gaming (Regulation) Rules, 2009, provides for licensing of various games including roulette, blackjack, pontoon, punto banco, bingo, casino brag, poker, poker dice, baccarat, chemin-de-fer, backgammon, keno, super pan 9, and sports betting on games involving prediction of sporting event results.

However, the Sikkim Online Gaming (Regulation) Amendment Act, 2015, significantly restricted the scope by limiting “online games and sports games” to physical premises of ‘gaming parlours’ through intranet gaming terminals within the geographical boundaries of Sikkim, effectively preventing true online gaming accessible from outside the state.

The licensing regime under the Sikkim framework requires operators to be companies incorporated in India and limits operations to within Sikkim territory. Annual license fees amount to INR 5,20,00,000, with operators required to execute a bank guarantee of INR 5,00,00,000 as security deposit.

Goa’s Casino Framework

The Goa, Daman and Diu Public Gambling Act, 1976 [7] represents a unique approach by being one of only two state legislations that permits casinos and other games of chance. The Goa Legislative Assembly, through amendments in 1992 and 1996, added Section 13A allowing the State Government to authorize “electronic amusement/slot machines in Five Star Hotels” and “table games and gaming on board vessels offshore.”

The 2012 Amendment significantly widened the regulatory framework by inserting provisions including Section 13C (enabling appointment of a Gaming Commissioner), Section 13D (providing powers and functions of the Gaming Commissioner), and Section 13L (excluding civil court jurisdiction over matters arising from the Act).

Other State Frameworks

Meghalaya Prevention of Gambling Act, 1970

The Act permits not only “games of mere skill wherever played” but also those games and sports that the government may, by notification, exempt from the Act’s operation, provided such exemption is not likely to encourage gambling. The government has utilized this power under Section 13(2) to permit the local archery game of ‘teer,’ with betting licensed under Section 14A of the Meghalaya Amusement and Betting Tax (Amendment) Act, 1982.

Rajasthan Public Gaming Ordinance, 1949

The Rajasthan framework provides that nothing in the Ordinance applies to any game of mere skill, as distinguished from a game of chance and skill combined, unless carried on in a common gaming house. This creates the unique situation where even games of skill are prohibited if played in common gaming houses.

Contemporary Challenges: Online Gaming and Regulatory Gaps

The rapid proliferation of online gaming platforms has exposed significant gaps in India’s gambling regulatory framework. Most existing state legislation was enacted in an era predating digital technology and lacks provisions addressing virtual gaming activities. This regulatory vacuum has created uncertainty regarding the legal status of online games, particularly skill-based games offered for monetary stakes.

Several states have recently amended their gambling laws to address online gaming:

The Andhra Pradesh Gaming Act, 1974, was amended in 2020 to specifically address online gaming activities. Similarly, Telangana amended its Gaming Act in 2017 to include online gaming within its regulatory purview. Tamil Nadu enacted the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, creating a distinct framework for online activities.

The regulatory challenges are compounded by the interstate nature of many online gaming operations, which can circumvent state-specific prohibitions by operating from states with more permissive regulatory environments. This has led to calls for a uniform national legislation to address policy inconsistencies.

Constitutional and Federal Considerations

The constitutional division of powers places “betting and gambling” in the State List, granting individual states exclusive authority to legislate on these matters within their territories. However, this creates practical challenges for regulating online activities that transcend state boundaries.

The Supreme Court has consistently held that gambling activities do not enjoy constitutional protection under Article 19(1)(g) relating to freedom of trade and profession, as gambling is considered res extra commercium (outside the realm of commerce). This principle, established in the Chamarbaugwalla case, continues to influence judicial approaches to gambling regulation.

Regulatory Enforcement and Implementation Challenges

The enforcement of gambling laws faces several practical challenges, particularly in the online sphere. Traditional enforcement mechanisms designed for physical gaming houses are inadequate for addressing virtual platforms that can operate across jurisdictions. The involvement of celebrities as brand ambassadors for online gaming platforms has further complicated enforcement efforts, as noted in the Kerala High Court proceedings.

The distinction between skill and chance games remains problematic in implementation, with regulatory authorities often lacking the technical expertise to evaluate complex gaming mechanics. This has led to inconsistent enforcement and legal challenges to regulatory decisions.

Economic and Social Implications

The gambling industry’s economic impact varies significantly across states with different regulatory approaches. Goa’s casino industry contributed ₹135 crores to state revenue in 2013, demonstrating the potential revenue generation from regulated gambling activities. However, concerns about gambling addiction, money laundering, and social harm continue to influence policy decisions.

The phenomenon of “loss chasing,” where gamblers continue playing to recover losses, has been identified as a significant indicator of problem gambling closely resembling drug addiction. This has led some states to adopt increasingly restrictive approaches to gambling regulation.

Conclusion and Future Outlook

India’s gambling laws represent a complex interplay of historical legislation, judicial interpretation, and evolving state-specific regulations. The fundamental distinction between games of skill and chance, established through judicial precedents like Chamarbaugwalla and Satyanarayana, continues to serve as the primary regulatory framework.

However, the emergence of online gaming has exposed significant regulatory gaps that require comprehensive legislative attention. The current patchwork of state laws creates opportunities for regulatory arbitrage while failing to provide adequate consumer protection or revenue optimization.

The need for a uniform national legislation addressing online gaming has become increasingly apparent, as individual state amendments cannot effectively regulate the borderless nature of digital platforms. Such legislation would need to balance multiple objectives: protecting consumers from harm, preventing illegal activities, ensuring appropriate taxation, and allowing legitimate business operations.

The future of gambling regulation in India will likely require a more nuanced approach that recognizes the technological transformation of gaming while maintaining the traditional skill-versus-chance distinction that has served as the foundation of Indian gambling jurisprudence. The success of such regulatory evolution will depend on effective coordination between central and state authorities, along with the development of appropriate technological and administrative capabilities for enforcement.

As courts continue to grapple with these evolving challenges, the legal framework will undoubtedly require further refinement to address the dynamic nature of modern gaming while preserving the policy objectives underlying gambling regulation in India.

References

[1] The Public Gambling Act, 1867. Available at: https://indiankanoon.org/doc/1824663/ 

[2] R.M.D. Chamarbaugwalla v. Union of India, AIR 1957 SC 628. 

[3] State of Andhra Pradesh v. K. Satyanarayana & Ors., AIR 1968 SC 825.

[4] Kerala Gaming Act, 1960. Available at: https://indiankanoon.org/doc/30615938/ 

[5] Jus Corpus. (2024). Exploring Gaming Laws in Sikkim: A Legal Overview. Available at: https://www.juscorpus.com/exploring-gaming-laws-in-sikkim-a-comprehensive-overview/ 

[6] Government of Sikkim. Sikkim Online Gaming Regulation. Available at: https://www.sikkim.gov.in/department/departmentmenudetails?url=Menu%3Dfinance-revenue-expenditure-department/directorate-of-state-lotteries 

[7] ICLG. (2024). Gambling Laws and Regulations Report 2025 India. Available at: https://iclg.com/practice-areas/gambling-laws-and-regulations/india 

[8] Lexology. (2021). A general introduction to gambling law in India. Available at: https://www.lexology.com/library/detail.aspx?g=3c73b277-c25e-4883-a152-a47e1040f4f2 

[9] Wikipedia. (2025). Gambling in India. Available at: https://en.wikipedia.org/wiki/Gambling_in_India 

Published and Authorized by Dhrutika Barad