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India - online gambling regulations

Published by Niki | June 29, 2020

Gambling in India

With more and more countries releasing news regarding current or developing legislation regulating online gambling, people are becoming more aware that these rules and regulations do apply, and if not followed could lead to some serious trouble. Because of this, the question regarding the legality surrounding online gambling in certain countries is being raised more frequently.

The online gambling market has become one of the biggest sources of revenue for many countries that have jumped at the chance to legalize online gaming. Others, however, are a bit slow on the legalization part and are therefore missing out on plenty of lucrative opportunities.

The laws and regulations on online gambling in India can be rather confusing. To be more specific, if you take the time to ask a couple of different people what their thoughts are regarding the legality of online gambling based in India, the chances are each will come up with a different answer. The truth is that most people don’t actually know what is happening when it comes to the laws on online gambling in India. Which is sad, seeing that India has a massive population of about 1.25 billion people.

When it comes down to it, Indian authorities consider gambling something to be frowned upon, but there are many legalities and loopholes that make it difficult to fully gain perspective. In an effort to clear the air and help players become aware of the legislation as well as whether or not they’ll be able to participate in online gambling safely, we’re taking a look at the history and current laws of gambling in India. Keep reading if you want to know if playing online casino games are okay in India.

Online gambling regulations in India

The history and laws of gambling in India

Gambling has existed in India for many years. Some would say it even dated back to a time that nobody really remembers. There is no precise date to be given on when gambling came to India, but gambling is believed to be a centuries-old activity. Even if this was true the government has done its utmost best to keep gambling illegal.

There are three Acts that address gambling, namely: the Public Gambling Act of 1867, the Prize Competition Act of 1955 and the most recent Information Technology Act of 2000.

The Public Gambling Act of 1867 makes it illegal for anyone to run a gaming house or to be caught in one. Those who are caught will receive the punishment of one month in jail. While this act specifically targets gambling in casinos or “gambling houses”, it was established way before online gambling existed and there are some that believe it does not apply to online gambling, seeing that the Act states that gambling in “any house, walled enclosure, room or place” is illegal. It says nothing about online sites, but in 1976 the Act was amended and words such as “house, room, vessel, and vehicle” were added. When looking at it in that perspective the law can also be applied to online gambling.

Then there is the Prize Competition Act of 1955 that addresses all forms of gambling in which a prize is given. Thus, any prize competitions in which the prize costs more than a thousand rupees is considered illegal. Again, while this specifically targets certain forms of gambling it does not point to online gambling.

Finally, there is the Information Technology Act of 2000, but this one is a bit tricky. The Act basically states that the sending of offensive messaging using an electronic device, especially if the message is offensive or menacing by nature, will result in severe punishment which includes up to three years imprisonment. It is unclear if this can be applied to online casinos but according to the Bombay High Court, it is fully applicable to content published on websites. No online operators have suffered under this Act, so there is uncertainty on whether or not it actually includes online gambling.

All these Acts are considered to have an impact on online gambling, but the reality is that online gambling itself isn’t specifically mentioned, so the legality of playing online is still considered to be a grey area.

Are winnings taxable in India?

This is another area of the laws in India that can be rather confusing. According to the law, any money received from winning the lottery, a game show, a crossword puzzle, gambling, betting or racing is taxable. It does not clearly state online gambling, but it is suggested that you rather declare the winnings to avoid getting into trouble with the law. The taxes on these types of winnings are quite steep. Players are looking at a flat rate of 30% tax payable on winnings, and this increases to 30.9% after the cess has been added.

While online gambling is considered to be a grey area, it is wise to be rather safe than sorry. Punishment in India is quite strict and it would be wise to remain on the right side of the law or you might face serious penalties such as imprisonment.

Is online gambling legal in India?

On reviewing the laws regarding any form of gambling as seen above, it becomes clear that online gambling is a grey area. And with each state in India has the authority to regulate gambling independently to a degree, this becomes even more complex.

Most states have outlawed all forms of gambling, but Goa and Sikkim have authorized a certain number of land-based casinos. According to the Sikkim Online Gaming Act of 2008, some online games are legal to play, including Poker, Blackjack and Baccarat to name a few. There is, however, no mention of online slots or other online casino variants.

With the online gambling industry continuously growing, Indians continue to take part in this recreational activity. While online gambling is not legal the governing bodies have done nothing to prosecute or follow up players who have participated in it. Players can therefore still enjoy playing on online casino sites that are licensed in other territories. The Indian authorities have managed to block some sites or prevent payments to others, but there is a number that is still available and open to players from India.

The laws in India regarding online gambling, or more specifically gambling as a whole, are extremely outdated. And with the interest growing in online gambling from both players residing in India and online operators looking to tap into the Indian gambling market, there is hope that these laws will soon be updated for the better.

Tip: Be sure to keep an eye on our responsible gambling section.

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