Should an international gambling project enter the Indian market? Legal aspects

What about international gambling operators that have iGaming licenses? In Curaçao or Malta, are they planning to reach out to this target market? It is attractive in terms of the popularity of the industry among citizens. Is it legal, and is it even possible to operate in India?

Let's look at this through the lens of how internet gambling is generally regulated in India.

In India, the online gambling industry is not as strictly regulated as it may seem. There are no federal laws prohibiting the online industry in the state. To date, with the exception of a Supreme Court precedent decision regarding skill-based gambling, no federal act directly regulates the online gambling industry, and each state takes a different position on the issue. Accordingly, the regulation of online gambling in India is made on a state-by-state basis.

There are only a few states where iGaming is regulated (or banned) by modern, clear legislation. But even if gambling is only allowed in a few states (e.g., Goa, Daman, and Sikkim), the rest of the country can also play online casinos and bet on sports.

With the exception of the states of Nagaland, Sikkim, Meghalaya, Telangana, Andhra Pradesh, and Tamil Nadu, all other gambling laws were enacted before the advent of the Internet and have not been amended to this day. Today, however, there is simply no law explicitly stating that gambling on the Internet is prohibited. And while the Indian Gambling Act of 1867 attempts to completely ban all forms of gambling, it does not sufficiently explain what gambling is in general. The interpretation of what iGaming is is out of the question.

As of 2022, online gambling is officially allowed only in the states of Goa, Daman, and Sikkim. Sikkim also allows online lottery, where players from all over India take bets. In addition, the states of West Bengal, Nagaland, and Sikkim allow poker play both online and offline after obtaining a license from the state authority.

Indian online casinos cannot advertise or have websites. However, it is not illegal to have foreign casinos (called offshore companies). The only legal requirement is that they offer Indian rupees as a payment method for players.

Advertising online gambling in India is a crucial point that international online operators should be careful with, especially in those states where there is a ban (Nagaland, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh) and where there is local regulation (Goa, Daman, Diu, Sikkim, Nagaland, Meghalaya). It is generally advisable to avoid aggressive advertising as it is fraught with the risk of undue regulatory scrutiny. India's information technology and consumer protection laws prohibit misleading advertising and prohibit content that violates the norms of basic Indian laws.

Online gambling has become a hotly debated topic in recent years because, in July 2018, the Law Commission called for the legalization of online gambling. A detailed report was then published recommending that India legalize gambling to generate revenue from the industry as a whole.

The government is trying to pass a new law to regulate gambling because with proper taxation, it will prevent people from losing money and will bring revenue to the economy. In 2022 a plan was announced to create a new gambling law to replace the Gambling Act of 1867. In May, an inter-ministerial commission was organized amid calls for a federal Internet gambling law. The commission included representatives from various government ministries planning the future development of the industry.

In January 2023, the government published new rules to regulate internet gambling, creating a number of "self-regulatory" bodies to oversee the sector.

The Ministry of Electronics and Information Technology issued amendments to the Information Technology Rules. According to the rules, online gambling is defined as any game conducted over the Internet in which the player "makes a deposit with the expectation of winning".

If necessary, certain games will also fall under the new rules. The amendments note that any proposed online gaming must not violate existing laws, such as the state's ban on gambling.

Instead of creating a state regulator, the amendments call for the creation of "self-regulatory bodies" made up of online gambling companies that would set the rules for online gaming. The board must include:

• An independent eminent person in the field of online gaming, sports, entertainment, or other relevant field.
• A person representing the interests of online game players.
• An expert in psychology or public policy.
• An expert appointed by the central government.

These bodies must create regulations "to protect users from harm" such as gaming addiction, as well as to protect children and prevent financial crime. They should also require their members to verify users, conduct KYC checks, implement a grievance redressal process, and have a contact address in India. If a self-regulatory body fails to create sufficient standards, the central government can "direct it to take remedial measures". If necessary, it can suspend the authority of such a body.

So the answer to the question of whether international online casinos are legal to operate in India today is yes. But it is possible that as early as this year, we may see changes that will concretize the regulation of gambling, including international operators.

 It is unclear whether this will create any problems for the existing regime. However, the trend is still of interest to the country's authorities.