Regulating Real Money Gaming in India: Balancing Innovation and Consumer Protection
Updated: Jul 28
By Jaztejvar Singh Gill (Student, SVKM’s Narsee Monjee Institute of Management Studies, Chandigarh Campus)
INTRODUCTION
India’s digital economy has seen a rapid growth which led to a significant expansion of the online gaming industry, especially the segment of real money gaming. (RMG). Platforms that offer fantasy sports, poker, rummy as well as other skill based games enable users to participate by staking their money with the opportunity to win rewards. Despite this sector attracting large investments and millions of uses, it has also raised grave regulatory concerns.
Issues involving the distinction between games of skill and games of chance, and online betting have led to regulatory intervention by both the Central and State Governments. The evolving regulatory approach is evident through the amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 along with the attempts by states like Tamil Nadu and Karnataka to restrict online gaming.
This blog would examine the intricacies of the legal framework that governs real money gaming in India and highlights the development of the Promotion and Regulation of Online Gaming Act, 2025.
Keywords: Online Gaming Law; Real Money Gaming; IT Rules 2023; Fantasy Sports Regulation; Gaming Law in India; Digital Gaming Regulation; Game of Skill vs Game of Chance; Consumer Protection in Gaming.
Understanding Real Money Gaming in India
Real Money Gaming refers to online games wherein the users stake money or other valuables with the possibility of gaining monetary rewards. These may include rummy, poker, fantasy sports, and any other such competitive online games. The central question which is of debate is whether these games constitute a “games of skill” or “games of chance”.
Historically, Indian courts have recognized that games that are predominantly based on skill come under legally permissible boundaries, in contrast to games of chance which amount to gambling and are either banned or prohibited under various state gambling laws. There has been a presence of a longstanding judicial distinction between skill and chance which has been repeatedly tested in Indian Courts. The Supreme Court in the case of Bombay v. RMD Chambarbaugwala found that games in which skill predominates over chance cannot be treated as gambling. This came to be known as the preponderance of skill test in KR Lakshamanan v. State of Tamil Nadu.
As a result of such precedents, fantasy sports have relied heavily upon this legal principle. In the case of Varun Gumber v. Union Territory of Chandigarh, wherein the Punjab and Haryana examined online fantasy cricket league formats and held these to be a game of skill. The Court ruled that playing fantasy sports online on the Dream 11 website does not amount to gambling and involves a substantial degree of skill.
Even in the presence of such judicial precedents, the emergence of online gaming platforms has complicated the regulatory framework because of technological advancements and various approaches taken by different states, but this allowed for the Parliament to introduce a coherent legal framework in 2025.
Amendments to the Information Technology Rules
The introduction the amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 in 2023 happened due to the sudden recognition of the need to regulate the rapidly growing online gaming sector by the Government of India.
The amendments paved the way for the introduction of a framework specifically targeting online real money games and imposed obligation on gaming intermediaries. One of the major factors was the creation of Self-Regulatory Bodies (SRBs) which are responsible for the verification of the compliance of real money games with Indian law. These bodies are expected to ensure that such platforms do not permit betting or wagering activities in any form prohibited under existing legislation.
Additionally, gaming intermediaries provided in the rules must adhere and abide by the due diligence requirements, including verification of permissible games, prevention of unlawful activities as well as protection of user interest. The rules also highlights user safety measures that include mechanisms established to tackle complaints and prevent financial fraud.
The action taken by the Government of India through the amendments reflects an attempt to balance industry growth along with regulatory oversight. This reinforces the principle that innovation does not come at the expense of consumer protection, even in the gaming sector.
State-Level Bans and Legal Challenges
The Constitution of India allows states to regulate gambling as well as betting under Entry 34 of List II of the Seventh Schedule, which lead to regulatory diversity across states.7 Due to the fact that the previous legal framework and provisions governing online games were statecentric, such provisions lead to uncertainty.
Tamil Nadu attempted to ban online games with the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. However, the Madras High Court in the case of Junglee Games India Pvt. Ltd. v. State of Tamil Nadu has held that games of skill such as online rummy and poker are protected under Article 19(1)(g) and that the state prohibition was invalid as it comes under the ambit of games of skill instead of games of chance.8 Meanwhile, Karnataka through its Karnataka Gaming (Amendment) Act, 2022, also faced challenges, wherein the court invalidated broad bans on online gaming.
The Promotion and Regulation of Online Gaming Act, 2025
Due to the rapid expansion in the online money gaming industry which previously has a fragmented legal framework resulted in the Parliament passing the Promotion and Regulation of Online Gaming Act, 2025 by providing a coherent framework for governing online gaming in India. The Act defines online money gaming as an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes, but shall not include any e-sports.9 The ultimate goal of the act is to regulate the growth of high-risk online gaming activities while at the same time recognising that digital gaming represents an increasingly significant segment of both India’s entertainment and technology sectors. Further, the Act establishes a new central governing authority responsible for:
Determining, on the receipt of an application from any person offering an online game or on suo motu basis, whether a particular online game is an online money game or otherwise, after making such inquiry as it deems necessary;
Recognising, categorising and registering online games in such a manner as may be prescribed by the Central Government under the Act; and
Such other powers and functions as may be prescribed by the Central Government under the Act.
Although the Act attempts to create clarity within this growing industry, its implementation will include a variety of factors that will certainly affect the future of online gaming in India, such as how the implementation of the Act works in tandem with existing legal principles under the Constitution of India, judicial precedents and the state’s constitutional responsibility to govern gaming-related activities.
Conclusion
The online gaming sector embodies both the promise and peril of India’s digital age. But it has allowed for the creation of vast economic opportunities and new forms of entertainment due to its rapid expansion. The features that make gaming attractive such as its scale, accessibility as well as its financial integration, also make it prominent to manipulation by extremist actors.
Against this backdrop, it is evident that the Promotion and Regulation of Online Gaming Act, 2025 seeks to provide proper oversight mechanisms in the context of India’s rapidly growing online money gaming environment.
Sources
State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.
State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699.
Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226.
Varun Gumber v. Union Territory of Chandigarh, SLP (Crl.) No. 9295 of 2019 (SC), order dated 4 Oct. 2019.
Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, G.S.R. 139(E), Gazette of India, Feb. 25, 2021.
Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, Rule 12 (amended 2023).
India Const. sched. VII, list II, entry 34.
Junglee Games India Pvt. Ltd. v. State of Tamil Nadu, 2021 SCC Online Mad 2762.
Promotion and Regulation of Online Gaming Act, 2025, § 2(g).
Promotion and Regulation of Online Gaming Act, 2025, § 8.
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