Further, eight escrow bank accounts used for payouts and maintained with various banks, holding a balance of about Rs 18.57 crore, have been frozen under Section 17(1A) of the PMLA, 2002. The ED said these accounts are suspected to contain proceeds from alleged criminal activity parked by the accused entities, including Nirdesa Networks and Pocket52. The agency said it seized incriminating devices, including mobile phones and laptops, from the premises of the company’s directors and founders, and collected extensive data backups from Gameskraft offices.

The arrests come after a wider financial crackdown carried out on November 24, during which the agency froze ₹523 crore belonging to WinZO and another real-money gaming platform, Gameskraft. Any person or entity operating an unregistered platform or engaging in online betting will be punished with imprisonment for up to three years and a fine of up to Rs 1 lakh. Any person aiding, abetting or promoting illegal online betting, including through advertisements or endorsements, will be punished with imprisonment up to six months and fined up to Rs 10,000. In this update, we have analyzed some of the key aspects of the Amendment Rules and certain additional factors relevant to the Indian online gaming sector.

Online Betting in India: Skill vs. Chance and the current Legal Landscape (

This represents a decisive shift from prior advisory regimes into one with strong criminal law backing. Online games without monetary stakes or winnings, offered purely for entertainment, recreation, or skill development. (ii)     Online social games include subscription-based or one-time fee formats designed for recreation or skill development, provided there is no stake or winnings component.

Potential Implications for the Industry

For instance, games such as rummy, poker, and fantasy sports are often categorized as skill-based and are thus permitted in several states under the online gaming laws in India. Conversely, games of chance, which rely predominantly on luck, are often restricted or banned to mitigate potential risks. India’s online gaming guidelines are primarily shaped by a combination of central and state-level regulations.

• However, the matter escalated to the Bombay High Court, which, in June 2021, issued notice to the State of Maharashtra to consider whether the game’s reliance on dice rolls rendered it a game of chance.
• The complainants also alleged that their KYC details were misused and that they suffered substantial losses due to “fraudulent activities” and “cheating” by WinZO and others.
• It also examines recent controversies, enforcement actions, and the shifting treatment of poker, Ludo, and binary prediction apps.
• An application for permission can be made within three months from the date of the establishment of three SRBs.
• After receiving presidential assent on August 22, it became law and was implemented from October 1.

The government says that online money games are leading to increased financial losses and suicide cases across the country. After investigating the gaps in state legislation governing online gaming, the Ministry of Electronics and Information Technology proposed new regulations in April 2023 to safeguard online gamers from addiction and malicious material. Against this backdrop, the Act’s blanket prohibition undermines India’s Digital India and startup agenda.

Such power rests with state governments, who can, under Entry 34, List II, Seventh Schedule of the Constitution of India, legislate on betting and gambling within such state (more on this below). Therefore, stakeholders, as well as SRBs, will have to continue to rely on guidance from Indian case laws and asymmetric state legislations on a case-to-case basis to determine what constitutes betting, gambling or wagering and which games will be permissible in which location. The Indian government has levied a 28% goods and services tax on online gaming companies, casinos, and betting on horse racing. Online ‘games of skill’, which are considered legal in India, face a relatively lower tax of 18% on gross gaming revenue, but ‘games of chance’ face the higher tax of 28% on total bet value. However, the line between what constitutes a ‘game of chance’ versus ‘game of skill’ is relatively blurred with conflicting judicial and legislative decisions.

The Centre said that online gaming companies promote themselves using large advertisements, celebrity and influencer promotions, which increase the reach and impact of these apps among youth and vulnerable sections. Internet service providers, network service providers and search engines are not allowed to host or promote content that directly or indirectly supports illegal online betting. Any person or entity seeking to operate a skill-based gaming platform in Karnataka should apply for a licence from the Authority. If the Bill becomes an Act, it will curb the “Game of Chance” — any game, contest or activity where the outcome is predominantly determined by luck, randomness or uncertainty and includes online gambling, betting and wagering activities. Under Entry 34, List II, of the Constitution of India, each Indian state has the power to regulate betting and gambling within such state.

The Centre’s earlier attempt through the IT Rules, 2023, to allow self-regulatory bodies verifying permissible “real money games” proved unworkable in practice, leaving enforcement gaps unaddressed. Over the last decade, India has seen a huge uptick in the number of online real money games available to Indian users. minimum deposit casino online However, in the absence of formal recognition, genuine real money games have often suffered with interference from state governments and a lack of public faith. Additionally, as the sector remained unregulated, many fraudulent games and scams, both offshore and onshore, have been perpetrated on Indian users. Penalties are stringent, including imprisonment, substantial fines, and corporate liability for officers and promoters.

By classifying the violations as cognizable and non-bailable, the provision may end up punishing individuals with no real culpability, instead of focusing on intermediaries who act with knowledge and intent. The Act, insofar as it imposes an absolute ban on RMG, squarely trespasses into the exclusive domain of State legislatures. Under Entry 34 of the State List, Seventh Schedule of the Constitution, “betting and gambling” fall within the sole competence of States. Accordingly, most States have either extended the Public Gaming Act, 1867, or enacted their own statutes to regulate gambling and gaming, including online gaming activities. By attempting to regulate and prohibit RMG through a central law, Parliament directly encroaches upon this State subject.