INTRODUCTION
India’s online gaming sector has developed very fast in the last decade, reaching approximately ₹23,000 crore in 2024 and is likely to reach ₹38,000 crore by 2026[1]. What was once a recreational hobby has become a huge digital marketplace fueled by cheap internet, smartphones, and fantasy gaming platforms. However, this growth has also led to social issues like gambling addiction, youth involvement, fraud, and loss of money. For years, the industry functioned in a legal limbo characterised by divergent state legislation and judicial pronouncements. To dispose of the same, Parliament passed the Promotion and Regulation of Online Gaming Act, 2025,[2] the first such national endeavour to consolidate online gaming policy within a single framework.
HISTORICAL LEGAL BACKGROUND
India’s legal structure regarding gaming has always been defined by its colonial history. The Public Gambling Act 1867 founded the tradition, as it outlawed the running of common gaming houses but authorised provincial governments to modify or tailor its provisions. Regulation, therefore, developed unevenly in India[3]. Goa and Sikkim legalised casinos as a means to increase the revenue generated by tourism, while Tamil Nadu and Telangana legislated for total bans on online money games[4].
Additional intricacy is introduced by the Constitution of India, which puts “betting and gambling” in the State List (Entry 34, List II, Seventh Schedule)[5], which reserves the subject in exclusive control of state legislatures. The Union Government’s suggestion of a national Online Gaming Act has thereby generated considerable controversy regarding federalism and legislative jurisdiction in the area.
CASE LAW JOURNEY: FROM CHANCE TO SKILL
The courts were often required to determine where the line was drawn between what was considered gambling and what was permissible as a valid game. In State of Bombay v RMD Chamarbaugwala, the Supreme Court held gambling to be res extra commercial—beyond the realm of legal business guaranteed under Article 19(1)(g) of the Constitution[6], on the basis that such activities were intrinsically malicious and thus could not be claimed as an activity within the scope of a protected trade[7]. The Court in State of Andhra Pradesh v K Satyanarayana explained that rummy was not a gamble, as skill over chance dominated the determination of results[8]. Subsequently, in Dr KR Lakshmanan v State of Tamil Nadu, the Court applied similar reasoning to horse racing, holding betting on races to be a game of skill and study, judgment, and training that needed to be done[9]. These judgments formed the doctrine that, though gambling could be banned, games of skill were beyond such prohibition.
The establishment of websites made it more difficult to distinguish between them. Fantasy sports providers like Dream11 used precedents to contend that their games were more skill-based. Various High Courts concurred. In Varun Gumber v Union Territory of Chandigarh, the Punjab and Haryana High Court confirmed the validity of Dream11’s fantasy sports platform, on the rationale that gamers needed substantial judgment in choosing players and teams[10]. The Rajasthan High Court soon followed suit in Chandresh Sankhla v State of Rajasthan, confirming that fantasy sports constituted valid games of skill. Even when appealed to the Supreme Court in the form of special leave petitions, the Court refused to intervene and thus left these judgments as holdings[11]. Also, in Junglee Games India Pvt Ltd v State of Tamil Nadu, the Madras High Court invalidated a state law prohibiting online rummy and poker, reaffirming that skill games cannot be banned simply because they have stakes[12].
THE ONLINE GAMING ACT, 2025
In spite of these rulings, the lack of a clear national policy left the industry exposed. States continued to enact contradictory laws, and this created uncertainty for consumers as well as businesses. In this context, the Promotion and Regulation of Online Gaming Act, 2025[13], aims to bring clarity. The Act takes one of its bravest steps in prohibiting all real-money games, whether skill-based or chance-based. This comes as a direct impact on platforms providing rummy, poker, and fantasy sports, which were earlier held by courts to be skill games. While doing this, the Act also identifies professional e-sports as a genuine sporting activity, providing a fillip to India’s budding competitive gaming industry. To oversee permitted gaming, it establishes a national licensing framework mandating operators to go through rigorous KYC checks, implement age checks, and inculcate anti-addiction practices. It also requires consumer protections like transparency of rules, warnings of excessive play, and grievance redressal systems accessible to consumers. Failure to comply invites heavy penalties, including imprisonment and fines, with stricter penalties for repeat offenders.
CONSTITUTIONAL AND LEGAL CHALLENGES
Not unexpectedly, the Act has also been challenged in various High Courts. Companies argue that the legislation infringes their basic right to practice a trade or profession under the Indian Constitution, Article 19(1)(g)[14], as courts have always ruled that games of skill were legal. They contend that the wholesale ban contradicts precedents like State of Andhra Pradesh v K Satyanarayana[15] and Dr KR Lakshmanan v State of Tamil Nadu[16]. The government, nonetheless, defends the law under the Indian Constitution, Article 19(6)[17], which allows for reasonable restrictions on trade in the interest of public order, morality, and health. The rule laid down in State of Bombay v RMD Chamarbaugwala[18] that gambling is not a fundamental right but an offending activity beyond the horizon of the Constitution—also supports the government’s position.
The legal argument also involves an issue of federalism. Gaming and betting are State List (Schedule VII, List II), hence opponents feel Parliament was not competent legislatively to pass this legislation, which may conflict with the Indian Constitution, Articles 246(1) and 254[19], dealing with the allocation of legislative power between the Union and States. The Centre, nonetheless, argues that a single national framework must apply to online platforms that have operations pan-state, and those cannot be satisfactorily regulated by piecemeal state laws. This federal element introduces a depth of constitutional intricacy to the legal complexities.
POLICY AND ECONOMIC ANALYSIS
The policy argument has both pros and cons of this strategy. Supporters say that the law is required in order to shield vulnerable users, avoid underage gaming, and protect consumers against predatory business practices. It also lends official sanction to e-sports, putting India on par with international acceptance of competitive gaming as a professional pursuit. Opponents caution, though, that the law would devastate the booming real-money gaming sector, which has generated thousands of jobs and drawn serious foreign investment. By enforcing a blanket ban, they argue that the Act ignores the subtle distinction between luck and skill and will drive gaming into the unregulated underground. Economically, India stands to lose a lot of tax revenues in the short term, although the government expects the more secure and transparent sector to bring in investments in the long term.
COMPARATIVE PERSPECTIVE
A comparative perspective shows that India’s approach is among the strictest globally. The United Kingdom, through the Gambling Act 2005, licenses betting, gaming, and lotteries in a regime of licensing, but excludes true skill games from the meaning of gambling[20]. The United States has a federalist approach: regulated online poker and sports betting are allowed in some states, like Nevada and New Jersey, but others have strict bans, although fantasy sports are commonly regarded as skill games.[21] Singapore’s Remote Gambling Act 2014 takes a blanket prohibition approach to online gambling but permits exceptions for licensed operators, showing a restrictive yet organised model[22]. China, on the other hand, legally bans online gambling nearly in its entirety but operates state-run lotteries[23]. Relative to these jurisdictions, India’s blanket prohibition on real-money skill games is one of the most backward major jurisdiction positions.
THE ROAD AHEAD
In the coming years, India’s online gaming law is set to go to a constitutional test. The Supreme Court might uphold the Act as a preference for public morality and health, invalidate the ban on skill games to follow earlier precedents, or ask Parliament to enact a balancing act of law with regard to central regulation and state prerogatives. Experts have recommended the creation of a National Gaming Commission, similar to SEBI, responsible for regulating online gaming, ensuring compliance, safeguarding consumers, and defining industry standards. Its membership can consist of a chairperson, legal and financial professionals, and technology and consumer protection representatives to provide proper regulation[24].
BALANCING REGULATION AND INNOVATION
The Promotion and Regulation of Online Gaming Act, 2025, is thus a landmark in the history of Indian legislation. Withholding real-money games but approving e-sports, it is the state’s attempt at consumer protection while introducing order into an unorganised industry. But with companies banking on State of Andhra Pradesh v K Satyanarayana[25], Dr KR Lakshmanan v State of Tamil Nadu[26], and State of Bombay v RMD Chamarbaugwala[27], and governments asserting their constitutional power, the war is far from over. Online gambling has shifted irretrievably from play to policy. What is yet to be seen is if India can find a balance between regulation and innovation.
Author’s Name: Kushagra Kumar (Maharaja Agrasen Institute of Management Studies, New Delhi)
[1] KPMG Report on India’s Online Gaming Industry 2024 (KPMG India, 2024)
[2] Promotion and Regulation of Online Gaming Act 2025 (No 18 of 2025, India)
[3] The Public Gambling Act 1867 (Act No 3 of 1867, India)
[4] Goa, Daman and Diu Public Gambling Act 1976 (Goa Act No 13 of 1976), as amended by the Goa Public Gambling (Amendment) Act 1992; Sikkim Online Gaming (Regulation) Act 2008 (Sikkim Act No 23 of 2008); Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022 (Tamil Nadu Act No 2 of 2023); Telangana Gaming (Amendment) Act 2017 (Telangana Act No 28 of 2017)
[5] The Constitution of India (adopted 26 January 1950), Seventh Schedule, List II, Entry 34
[6] Indian Constitution, art 19(1)(g)
[7] State of Bombay v RMD Chamarbaugwala [1957] SCR 874 (SC)
[8] State of Andhra Pradesh v K Satyanarayana AIR 1968 SC 825
[9] Dr KR Lakshmanan v State of Tamil Nadu (1996) 2 SCC 226
[10] Varun Gumber v Union Territory of Chandigarh 2017 SCC OnLine P&H 5372
[11] Chandresh Sankhla v State of Rajasthan 2020 SCC OnLine Raj 264
[12] Junglee Games India Pvt Ltd v State of Tamil Nadu 2021 SCC OnLine Mad 2762
[13] Promotion and Regulation of Online Gaming Act 2025 (No 18 of 2025, India)
[14] Indian Constitution, art 19(1)(g)
[15] State of Andhra Pradesh v K Satyanarayana AIR 1968 AP 269
[16] Dr KR Lakshmanan v State of Tamil Nadu [1996] 1 SCC 597
[17] Indian Constitution, art 19(6)
[18] State of Bombay v RMD Chamarbaugwala [1957] SCR 874
[19] Indian Constitution, arts 246(1) and 254
[20] https://www.legislation.gov.uk/ukpga/2005/19/section/1
https://www.legislation.gov.uk/ukpga/2005/19/section/6 accessed 09 September 2025
[21] Murphy v NCAA 584 US (2018)
[22] Remote Gambling Act 2014 (Singapore) ss 8–9, available via Singapore Statutes Online: https://sso.agc.gov.sg/
[23] https://legalpilot.com/country/china/accessed 08 September 2025
[24] PRS Legislative Research, The Promotion and Regulation of Online Gaming Bill, 2025 https://prsindia.org/billtrack/the-promotion-and-regulation-of-online-gaming-bill-2025 accessed 08 September 2025
[25] State of Andhra Pradesh v K Satyanarayana AIR 1968 AP 269
[26] Dr KR Lakshmanan v State of Tamil Nadu [1996] 1 SCC 597
[27] State of Bombay v RMD Chamarbaugwala [1957] SCR 874
