Gambling in India: History, Licensing, Taxes

Martin Singh
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India has extremely restrictive laws, only allowing gambling in the states of Goa, Sikkim, Meghalaya, and Daman. Out of these four, Sikkim is the most liberal and the only one with online gambling laws. Each state creates its own regulation.The country has some leniency toward games they consider “skill games.” In other words, you can try your luck at a poker table, horse betting ring, and with a lottery. Sports betting, in particular, is very popular but is considered illegal.

History of gambling in India  

Although India has restrictive laws and is culturally against games of chance, the country has a long history of gambling. According to its ancient script, Ramayana, the practice has existed since the year 7300 BC. Aside from chess, people loved to play games with dice and gambling boards.

When talking about modern gambling games, the Indian population was heavily influenced by European traders and conquerors. Englishmen introduced cricket in the 17th century, and as its popularity spread across the country, Indians started placing sports wagers. In the 18th century, the introduction of horses started the practice of horse betting.

The first modern gambling law was introduced in 1867 and is still in effect to this day. According to it, a person cannot run a gambling house regardless of their upbringing or caste. Any violation of this law is punishable by a fine or jail time.

Even though federal laws are restrictive, each state is given full autonomy over its gambling practices. The government of Goa, Sikkim, Daman, and Maharashtra took advantage of this, allowing people to gamble on their territory.

Nowadays, illegal gambling is extremely popular in the country, despite it being perceived as a religious sin. Due to a massive surge of illegal online and traditional gambling, the government did a thorough examination in 2016, analyzing the current laws. They’ve concluded that it’s really hard to stop these illegal practices, but they should at least try to regulate them.

India’s gambling laws

As previously mentioned, most Indian states used the Public Gambling Act from 1867. In some cases, they add a few amendments, thus customizing the law for the local populace. The Public Gambling Act is a universal federal statute that bans gambling of all sorts. However, each state has the option of enacting its legislation.

So, states such as Delhi, Madhya Pradesh, and Uttar Pradesh have used the 1867 law, while Sikkim and Meghalaya have their own legislation. The most important thing about this law is that it mainly refers to physical premises. According to it, citizens aren’t allowed to open brick-and-mortar gaming houses, but the law doesn’t say anything about online casinos.

This omission makes sense given that it was made a century and a half ago, before the internet. In other words, there’s no regulation for online gambling, although the states are slowly introducing legislation that would regulate this field. For example, Meghalaya, Sikkim, and Nagaland have a licensing system for online gambling websites.

Available and prohibited gambling games in India

Gambling laws in India vary significantly from state to state. Regions that adhere to the 1867 Public Gambling Act prohibit bingo, betting, and sports betting. A lot of “newer” forms of betting are unregulated, which includes American-style poker, fantasy betting, and online gambling.

The legality of a game depends on its classification. For Indians, gambling is taboo, so the only forms they allow are skill games. Something like roulette is scoffed at, and there is only a handful of state governments that would even consider its legalization.

Horse betting is one of the rare gambling types that are allowed across the country, as it’s categorized as a skill game. The lottery is also legal according to the 1867 law. Depending on the type of poker, it might be legal or illegal. For example, Omaha Hold’em and Texas Hold’em are fully legal in India as games of skill.

If you’re looking to gamble in India, your ideal states would be Goa, Sikkim, Daman, and Meghalaya. These are the only places that have land-based casinos. Sikkim and Meghalaya are the only states in India that have sports betting regulations (betting is legal in both of them).

Issues and limitations

The main problem with Indian gambling laws is that they’re somewhat obsolete. What’s even worse, the majority of modern games are completely unregulated. The best example of this is online gambling, which Indians can enjoy with impunity.

Although Indians are generally abiding by the rules, illegal games are available to the citizens. It’s also worth mentioning that this country penalizes gamblers who go against the law. According to the 1867 law, those who open a gambling house are fined 200 rupees or a 3-month jail sentence. Players would have to pay 100 rupees or serve a 1-month sentence.

In the last few years, certain states have done their best to update their legislation. Unfortunately, this trend is mostly present in the “gambling” states such as Daman, Goa, Sikkim, and Meghalaya. The last state is probably the most advanced in that regard; Meghalaya has regulated sports betting and fantasy betting.

India gambling licensing

Nowadays, gambling has become an extremely popular pastime in the country. The number of land casinos has increased in the last few decades, and Indians have shown enormous interest in online gambling and sports betting.

Keep in mind there are some major discrepancies between state licensing rules, and certain games are yet to be regulated. Nevertheless, regions that allow gambling are very strict when it comes to issuing permits, with requirements varying based on the game.

If we were to generalize, all applicants across India should adhere to similar basic requirements:

  • Operators’ top management and headquarters should be located within India’s territory. The same goes for their technology and business equipment.
  • Each state prescribes its own fees, which can vary from 500 rupees to 50,000 rupees.
  • An operator can’t have a criminal history.

Like in many other countries, the number of licenses is limited, with each state having the ability to govern the number of permits. For example, Sikkim allows only two casinos in the state, both of which are currently located in two of their 5-star hotels.

Licensing terms

Here are the licensing requirements based on a game:

  • Casinos: In India, the only way to run a casino is within a 5-star hotel. In other words, the only people who can apply for a casino license are the management of these hotels. The law applies to Sikkim, Daman, and Goa.
  • Poker: Certain types of poker, such as Texas and Omaha Hold’em, are considered skill games. As such, you don’t need a license to play them. The only exception to this rule is when you play poker in Gujarat, Sikkim, Nagaland, and Telangana.
  • Sports and horse betting: Operators need a license to run sports and horse betting in India.
  • Fantasy betting: Most Indian states allow fantasy betting (it’s not properly regulated). Nagaland is the only exception where operators need a license to run these games.
  • Social gaming: You don’t need a license
  • Skill games: You don’t need a license to play skill games, with the exception of Nagaland.

The duration of a license also varies based on a state:

  • Sikkim: 5 years (you can easily renew it upon expiry)
  • Meghalaya: 5 years
  • Daman: 5 years
  • Nagaland: 5 years (you can easily renew it upon expiry)
  • West Bengal: License duration varies based on the event that an operator is covering

India gambling tax

Like some other countries, India doesn’t have a gambling tax. Instead, the government uses standard income tax regulation for players’ and operators’ winnings. In other words, gambling taxation is a subject of the 1986 Finance Act that imposes a 30% flat tax on winnings and income.

However, the effective tax is a bit higher than that. When calculating the liabilities, players and operators should also consider conditions and surcharges applied for particular income groups:

  • If a player/operator earns more than 50,000 rupees, the regular flat-tax rate is increased by 10%. In other words, the total tax is 33%.
  • If a player/operator earns more than 1 million rupees, the surcharge on the flat-tax rate increases by 15%, resulting in a 34.5% total tax.

The second tax, in particular, is very rare, and most players don’t have to worry about it. Usually, a person is only subjected to this tax if they win the Indian lottery.

Keep in mind that there are some discrepancies when it comes to online gambling. According to a recently-introduced Equalization Levy or EL, all participants in digital transactions are subject to 2%. This also includes gambling and skill games.

In states where online games are regulated and allowed, operators and players are subject to a 28% gambling tax. The government is a bit more lenient toward skill games, such as Texas Hold’Em, taxing its population 18%.

Type of gambling in India

In India, people like to have fun with a mixture of traditional and modern games. Horse racing has a long history, being introduced in the 18th century and never losing its appeal. Indians also like illegal cricket betting, while online casinos are becoming more and more common.

Casino in India

Casino gambling: Partially legal, licensing required

Online casino gambling: Partially legal, licensing required

Each state has the option of enacting its respective gambling laws. According to some legal experts, the best way to classify casino gambling in India is as an unregulated practice (i.e., there isn’t an official federal law governing the activity).

Aside from Goa, Sikkim, Meghalaya, and Daman, casinos are illegal in all Indian states. In regions where casinos are legal, players can choose between traditional casinos situated within luxury hotels and floating casinos onboard cruise ships.

Although there are some regulations pertaining to traditional casinos, there are no official federal laws regulating online gambling. Official institutions consider it an illegal activity, although, in practice, perpetrators are not penalized. The Indian government does a good job of blocking online gambling sites and preventing deposits.

The only two states that regulate online gambling are Meghalaya and Sikkim. Although the first Indian laws were enacted in 2009, the players had to wait until 2014, when the first online gambling license was issued.


Lottery gambling: Partially legal, no licensing required

Online lottery gambling: Partially legal, no licensing required

Similar to other gambling activities, each state can enact its lottery laws and regulation. Indians consider the lotto a skill game, which is why the governments are more lenient toward it compared to some other games.

There are currently 12 states that run lottery. The list includes Meghalaya, Kerala, Punjab, West Bengal, Assam, Goa, Sikkim, Maharashtra, Madhya Pradesh, Arunachal Pradesh, Manipur, and Nagaland.

Nowadays, the biggest lottery in India is organized by Playwin, which is under the umbrella of the Pan India network. It’s available in a few states and is currently the only lottery company that has proper licensing. They also have a working website in numerous states, at least those that allow lottery.

Similar to poker, people are generally not persecuted for playing the illegal lottery. Foreign companies accept Indians and give them prizes if they win. However, you will encounter several difficulties trying to play the online lottery in states where it’s banned. Most state governments block gambling websites in their respective states.


Bingo gambling: Partially legal, no licensing required

Online bingo gambling: Partially legal, no licensing required

Bingo is not a particularly popular game in India. You won’t find it in hotels or any other places, as a matter of fact. According to the general definition, this is considered a game of luck, and, as such, it’s the subject of the 1867 Public Gambling Act.

The online version of the game is not regulated. Due to the nature of traditional bingo, most Indians will tell you that online bingo is an illicit activity. However, given there are no bingo halls in the country, operators and players are not even in a position to be persecuted.

Sikkim is the only state that has regulated this game of chance. To this day, its institutional bodies haven’t issued a single bingo license.

If you’re interested in playing bingo in India, your best bet is to go with a reputable online gambling provider. However, depositing funds and accessing bingo sites can prove to be tricky, similar to other forms of online gambling in India.

Poker in India

Poker gambling: legal, no licensing required

Online poker gambling: legal, no licensing required

Poker laws in India are among the most ambiguous ones, and their interpretation can vary based on the type of poker that is being played. According to the 1867 law, this is a game of skill, which is why it should be considered legal. Unfortunately, things are not always that obvious.

There was an instance of a poker club raid in 2013, where participants and operators were accused of enjoying an illicit gambling activity. However, India’s High Court has acquitted everyone involved citing that poker is a skill game.

Online poker in India has a similar status to traditional poker. In theory, operators should have a license to perform this activity without having to worry about legal ramifications. Still, the local governments haven’t issued any permits so far. The state of Sikkim is the only exception issuing a few of them.

Nowadays, a lot of players enjoy this game via foreign sites.

Sports betting in India

Sports betting: legal, no licensing required

Online sports betting: legal, no licensing required

Sports betting has been present in India, in one form or another, since the 18th century. Soon after England introduced horses to the peninsula, Indians started placing money on horse races. To this day, this remains the only allowed form of sports betting in the country, legalized by the Supreme Court in 1966.

According to the official categorization, horse racing is a form of skill game. Interestingly enough, the same rule doesn’t apply to any other activity, which is why placing a wager on other sports is still prohibited.

Sikkim is the only state that allows online and land betting. However, they still haven’t issued any permits putting the whole practice within the gray legal zone. Most Indians place their wagers on foreign websites, with operators welcoming players from this country.

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