justice, law, court



Online gaming has become a major source of entertainment and a growing industry worldwide as well a being used for earning high amount of money . However, the taxation of online gaming remains a complex and controversial issue. This thesis examines the current state of online gaming taxation and analyzes the different tax regimes adopted by different countries. It also considers the challenges governments face in taxing online gaming and assesses the potential impact of taxes on the growth of the industry. The paper concludes with recommendations for governments on how to approach the taxation of online gaming in a way that balances the need for revenue with supporting industry growth.

This abstract provides an overview of the legal framework for online gaming in India. It examines the various laws and regulations governing online gaming in India, including the Indian Gaming Act 1976, the Information Technology Act 2000, and the Indian Penal Code. It discusses various legal issues related to online gaming, such as the legal status of online gaming, the legality of offshore gaming, the potential for criminal activity, and the taxation implications of online gaming. It also focuses on the need for a comprehensive legal framework for online gaming in India and the implications of such a framework. Finally, it makes recommendations regarding the need for stricter regulation and oversight of online gaming in India.

KEYWORDS: Online Gambling, Gambling Laws, online games, gaming taxes, psychological harm


Gambling is not a new concept to discuss. It has been a controversial topic for many countries. And it’s not a new topic in its formation as well, as gambling has been in existence since the time immemorial. From the Indus Valley Civilization to the Mesopotamian period, there have been ample pieces of evidence of the existence of the game. It is seen as a game of skill by some and a game of luck by others. It involves consideration, risk, prize and is a game of probability, and permutations and combinations. Gambling has been a topic of debate due to the moral issues revolving around it and the psychological effect it has on the players.

Here are many types of gambling and every country has separate legal laws for each of them. India, United Kingdom, USA, China, Australia, Ireland, Finland, Canada, Thailand and New Zealand are some of the major markets for gambling businesses. What is interesting to note is that there are some countries where gambling of any kind is strictly prohibited such as the United Arab Emirates and Brunei because the concept of gambling goes against the culture and ethics of the country. North Korea also doesn’t allow for any kind of gambling, however, it is allowed for tourists with guided tours.

For other countries where gambling is legalized, it differs from state to state and country to country. For example, in the USA, there is a federal law for gambling, but it also depends on state to state which type of gambling is legal and which is not. In countries like Japan, gambling was illegal for a long time but recently betting in sports activities has been legalized and various casinos have also been opened. Therefore, even in countries where gambling is legalized, it ultimately  depends on the kind of gambling taken into consideration.  With millions of users participating in various forms of digital gaming and competitive E-sports tournaments, India has a thriving online gaming and E-sports industry. With the growing popularity of online gaming, the Indian government has enacted laws and regulations to govern this industry, particularly in the areas of online gaming, E-sports, and gambling. In India, the legal landscape for online gaming and E-sports is complicated, as different laws govern different aspects of the industry. The Public Gambling Act of 1867, for example, prohibits gambling in India. However, because this law does not specifically mention online gambling, there has been some confusion in the country about the legality of online gambling.

The recent boom in the online gaming and E-sports industries has also resulted in the formation of self-regulatory organisations such as the E-sports Federation of India (ESFI) and the All India Gaming Federation (AIGF). These organisations seek to regulate the industry and ensure fair play, as well as to promote responsible gaming and the prevention of gambling addiction. The lack of uniformity in laws across different states is one of the major challenges in regulating online gaming and E-sports in India. While some states have legalized online gaming and E-sports, others have outright prohibited it. Confusion and inconsistency have resulted, making it difficult for the industry to thrive in a regulated environment.


This study was compiled using a doctrinal research methodology, which necessitated the gathering of secondary data from a wide range of print and digital sources including journals, research papers, online legal databases , thesis and research carried out by scholars. This research shows various case laws of different states related to online gambling and betting. It also referred to online gambling cases to understand the liability and applicability of laws in different countries.


1.Gambling in India: A study from the perspective of law and economy by Sanjeev Kumar Singh, I this the author had shown a development in the rise of online gaming in India as well as the precents set by the judicature with respect to it

2. Online gambling laws and punishment in India published on legalkart.com, in this article the specific case laws regarding online gambling and its development in India was elaborated.


The truth is that gambling on betting sites is still in the gray area in most parts of India. We must understand that gambling is regulated in the country, and the regulations in place are based on the Public Gaming Act of 1867.  Since this is a law passed before the internet ever existed, it has no mention of online gambling. Some of the state that allow online betting are given below;

  • Sikkim – The local government of Sikkim has the ability to issue sports betting and casino licenses to online operators. Online gambling activities are fully legal including games of skills and chance in Sikkim.
  • Goa – The state of Goa allows land and online gambling activities. It’s a popular tourist destination for gambling enthusiasts.
  • Daman and Diu – Daman and Diu have a few land-based casinos that are operating legally, but it doesn’t regulate online betting.
  • Nagaland – Online games categorized under games of skill like poker and rummy are legal in Nagaland based on the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act of 2016.
  • Meghalaya – In Meghalaya, online games including poker, rummy, and bridge are also allowed and regulated.



Online gambling can be lightly addictive, leading to severe financial and social problems. As it is easily accessible, players can spend hours playing games without  realizing the amount of time and money


Online gambling can be used as a means of money laundering, where players can deposit large amount of cash into online accounts and then withdraw the money in a legitimate form


Online gambling sites can be vulnerable to cyber attacks, which can lead to the theft of sensitive personal and financial information of the players.


  • Convenience: Online gambling can be accessed from the comfort of one’s own home or anywhere with an internet connection, making it more convenient than traditional gambling methods.
  • Accessibility: Online gambling is often more accessible for people with disabilities or those who have difficulty leaving their homes, allowing them to participate in gambling activities that would otherwise be difficult or impossible for them.
  • Revenue Generation: Online gambling has the potential to generate significant revenue for the Indian government through taxation and regulation. Besides, the online gambling industry can create job opportunities for Indian entrepreneurs, who can develop and operate their own online gambling platforms.



Sikkim: Sikkim has also officially allowed the establishment of online casinos with a special license. For this purpose, the Sikkim Online Gaming (Regulation) Act, 2008 (“SOGA“) was enacted. SOGA covers certain casino games such as roulette, blackjack. These games may only be offered via intranet within the State of Sikkim. The license is generally valid for 5 years unless revoked or withdrawn. 

MeghalayaMeghalaya Regulation of Gaming Act, 2021 (“MRGA“) and Meghalaya Regulation of Gaming Act Rules 2021 (“MRGAR“) allow operators to acquire a license to provide online and in-state gambling games such as slots, roulette, keno ETC

 Only Indian citizens or a legal entity registered in India can apply for a gambling license in Meghalaya. Each license is valid for 5 years and licensees will have to pay “Gambling Royalty”. MRGA also states that it is illegal to operate a casino or offer games in the state without a license.

Goa, Daman, Diu :The Goa  daman and Diu Public Gambling Act, 1976 (“GDDPGA“) regulates casinos and permits the offering of electronic entertainmentcin five-star hotels in Goa, Daman and Diu under a licensing regime. Table games and gambling games may also be offered on board marine vessels. Offshore casinos require a license to operate under the GDDPGA.

In Goa, the Commissioner of Commercial Taxes acts as the Gambling Commissioner


It can be played in different formats (online or in the states) and they fall under the category of lotteries or the category of gambling (the last prohibited by most gambling laws). 


Several types of betting are stipulated:


in the states of Sikkim and Meghalaya, sports betting is allowed under license via intranet;

  • HORSE RACE BETTING– they have been judicially recognized as a game of skill and many gambling laws exclude them from their list of prohibitions. Also since most gambling laws started before the Internet, there is no regulator, no definition of “online horse racing betting” and therefore no license is required.  But the club organizing the horse race can impose certain conditions.


Excluded from the sphere of gambling laws and regulated by state and national lottery laws. Private lotteries, except those permitted under a license issued by a state government, are prohibited under the Indian Penal Code (45 of 1860) (“IPC“).  Among those state governments that organize lotteries themselves, physical lotteries are conducted by their authorized departments or the state finance ministry.

In the states of Punjab, Kerala, and Maharashtra, only physical lotteries are authorized.


Gambling laws provide special exemptions for skill games.  In most states in India, except for Nagaland, which has an online skill games licensing regime, a license is not required to conduct skill games.


The Indian cyber law under IT Act 2000 provides certain provisions which can be used to regulate online gaming industry. Section 66 of IT Act defines computer related crimes which are punishable upto three years of punishment and upto five lakh fine. Section 67, 67A, 67B can be used to regulate games involving any obscene content. Section 69 of the Information Technology Act, said that government to issue directions for interception, monitoring and decrypting of any information of any computer source under certain circumstances which include sovereignty and integrity of the country. Under section 69A, “the government can issue directions for blocking for public access any information through any computer source”. Section 79 of the IT act provides that cases in which intermediaries would have a liability and cases in which they won’t.

Central and State legislations:

  • The Constitution of India in its Seventh Schedule, List II (State List) [1] empowers the State Governments to make laws regarding gambling and betting activities. Pre-independence there was no such distinction and the Public Gambling Act, 1867, governed gambling and betting activities in the country. The Public Gambling Act, 1867, a central legislation enacted during the pre-independence era, prohibits any games of chance and probability except lotteries. The Act prohibits owning, keeping and being found in a common gaming house [2] , however, the Act excludes “games of skill” from its ambit.
  •  Post independence, most States have enacted State laws governing gambling and betting that are based on the central legislation i.e. Public Gambling Act, 1867. Some of the State laws that are enacted pertaining to gambling and betting activities are West Bengal Gambling and Prize Competition Act, 1957, Bombay Prevention of Gambling Act, 1887, Punjab Public Gambling Act, 1961, Kerala Gambling Act, 1960, Goa, Daman and Diu Public Gambling Act, 1976, Sikkim Regulation of Gambling (Amendment) Act, 2005 etc. Most of the States have passed enactments prohibiting gambling and betting (other than exceptions like horse racing, some card games etc.) but two States i.e. Goa and Sikkim have legalized many forms of gambling and betting.
  • Goa and Sikkim permit the setting up of casinos. The Goa, Daman and Diu Public Gambling Act, 1976, with prior permission of the State Government authorises any game of electronic amusement/ slot machines in five star hotels and such table games and gaming on board in offshore vessels, as may be notified, subject to such conditions including the payment of recurring and non recurring fees.
  • The Sikkim Casino Games (Control and Tax Rules), 2002 authorises the Sikkim Government to grant licenses to individuals and businesses that are interested in operating a casino within the State. Also, the Sikkim Regulation of Gambling (Amendment) Act, 2005 gives the Sikkim Government the authority to authorise gambling on certain days and to make certain gambling houses legal at their own discretion by way of grant of license.
  • The Maharashtra State Legislative Assembly has passed the Maharashtra Casino (Control & Tax) Act, 1976 but has failed to enforce and notify the same till date. In the year 2008, the Sikkim State Legislative Assembly has passed the Sikkim Online Gaming (Regulation) Act, 2008 which came into force from 1 July 2009. The Act provides for regulating online gaming in Sikkim, which were originally limited to poker and casino games, such as, Black Jack, Pontoon, Bingo, Poker, Baccarat etc. The Act was subsequently amended on 1 August 2009 to make online sports betting in the State of Sikkim legal, subject to the operator holding a license granted by the State Government of Sikkim. Thus, Sikkim is the only State in India that permits online betting in sports through websites whose servers are based in Sikkim.
  • Although the State of Sikkim has permitted online betting in sports, there is a grey area whether this step by the State of Sikkim may be affected by the provisions of the Information Technology Act, 2000 [3] and the Rules [4] (being a central legislation) that prohibit the sharing of any information online that may relate to or encourage gambling.


1. S.Muthukumar v/s The Union Of India

2. Amit m Nair v/s State Of Gujarat

3. Pauly Vadakkan v/s state of kerala

) Gambling in India: A Study from the Perspective of Law and Economy by Sanjeev Kumar

Singh, in this the author had shown a development in the rise of Online Gambling in India as

well as the precents set by the judicature with respect to it.

2) Online Gambling Laws and Punishment in India published on LegalKart.com, in this article

the specific case laws regarding online gambling and its development in India was elobarated

) Gambling in India: A Study from the Perspective of Law and Economy by Sanjeev Kumar

Singh, in this the author had shown a development in the rise of Online Gambling in India as

well as the precents set by the judicature with respect to it.

2) Online Gambling Laws and Punishment in India published on LegalKart.com, in this article

the specific case laws regarding online gambling and its development in India was elobarated


India possesses a range of factors that make it attractive to gambling enthusiasts. Here are some reasons why India is considered a great destination for such games:

  1. Traditional skill-based games: In addition to games of chance, India has a long-standing tradition of skill-based games like chess and rummy. These games require strategy, critical thinking and expertise, making them popular among players who prefer to test their abilities rather than rely solely on luck.
  2. Legal framework: While the legal status of gambling varies from state to state in India, some states such as Goa, Daman, and Sikkim have established a legal framework for gambling activities. These states have licensed casinos and gambling establishments, providing a regulated and safe environment for gamblers.
  3. Online gambling opportunities: With the advancement of technology, online gambling has gained significant popularity in India. Many reputable online casinos and betting platforms serve Indian players, offering a convenient and accessible way to enjoy gambling without leaving home.
  4.  Growing casino industry: The casino industry in India is steadily growing, with new casinos opening up. This growth creates new job opportunities, stimulates the tourism sector, and contributes to the overall economic development of the country.
  5. Cultural diversity: Different regions of India have their own traditional games, rituals, and customs associated with gambling. Learning about these diverse gambling traditions can be a fascinating and enriching experience for players.


The technology is changing day by day and so are the needs of people. Activities which were considered to be immoral some decades back are not so immoral anymore like gambling. People used to think of gambling as a social evil earlier but now there is a huge demand for it especially on the cyberspace. So, the law has to keep pace with changing values of the society. The size of the market for online gambling is increasing rapidly and it’s high time that the government should take steps to regulate it. Also, the parliament has the power to enact a legislation regarding internet gambling as it played on the cyberspace and uses mass communications which fall under entry 31 of the union list that states “Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication”. So I recommend that a comprehensive legislation should be bought which is the need of the hour to regulate such activities on the internet. This will be beneficial both for the consumers and the government. The legislation would aim to protect the interest of the gamblers by protecting them from fraudulent players in the market and would also take steps to curb problems like problem gambling, youth addiction, criminal behaviour, and money laundering activities. On the other hand, the government would also be able to keep a check on such transactions and can tax profits made out of them which will serve as a good source of revenue for the government. It will also help in reducing the scope of the illegal market and circulation of the black market in the economy as regulation will ensure transparency which will curb underground activities. I also recommend that a Gambling Commission should be set up in India which will be given the task to issues licenses to the relevant players in the market and ensure that such operators link up their Aadhar card/ Pan card in order to ensure a free and fair market. No one should be allowed to provide gambling services online without having a license and the same should be made a punishable offence