Experts navigate the complex world of real money gaming regulations in India

As India’s real money gaming sector continues to expand, the need for robust consumer protection and clear regulations has become more critical. With varying legal landscapes across states, operators face challenges navigating a patchwork of laws that range from outright bans to regulated frameworks. States like Karnataka have imposed strict bans on games like poker and rummy, citing concerns over addiction and financial harm, while others such as Sikkim and Nagaland have introduced licensing laws to regulate the industry. The inconsistency in these regulations not only confuses operators, but also leaves consumers vulnerable to unregulated, illegal platforms that exploit gaps in the law.

In the face of these challenges, there is growing momentum for a national framework to ensure fair play and safeguard both consumers and legitimate gaming operators. Such a framework could address the increasing risks posed by unregulated platforms, ensure the integrity of the gaming industry, and protect players from addictive behavior. With real money gaming gaining popularity, especially among younger generations, the need for a balanced and well-structured legal framework is more pressing than ever. This conversation goes beyond policy – it’s about creating a safer, more transparent environment where both players and businesses can thrive responsibly.

Ensuring consumer protection

To the important question on how state governments are ensuring consumer protection, particularly against gambling addiction, in the real money gaming sector, Vidushpat Singhania, Managing Partner, Krida Legal, replied, “Certain states, such as Telangana and Andhra Pradesh, have imposed outright bans on online real-money games like poker and rummy, citing their addictive nature and potential financial harm to users. While the aforesaid have taken a stringent route, states like Sikkim and Nagaland have enacted laws to regulate the online gaming industry, requiring operators to obtain licenses and adhere to prescribed norms. Platforms are increasingly being encouraged to impose limits on gaming time and spending to help players avoid financial losses and addiction. It is pertinent to note that the Tamil Nadu Online Gaming Authority has proposed monetary limits and time limits restricting gaming between 12 am to 5 am and allowing daily play limit not longer than four hours with each session being under two hours. A regulation of this nature is expected to curb the addiction involving gaming and also encourage responsible gaming practices amongst users.”

A Spokesperson from AIGF believes that, “The increasing presence of offshore and illegal gambling operators, often masquerading as legitimate gaming platforms, has prompted several state governments to take notice. This issue has two critical dimensions: gambling is frequently conflated with online skill gaming, and these operators are actively defrauding consumers pretending to be the latter. The Supreme Court of India has consistently recognized the legitimacy of online skill-based gaming, emphasizing that games of skill differ fundamentally from gambling. However, the influx of unregulated and illegal operators, many of whom falsely claim legitimacy, has blurred these lines, causing even lawful operators to be unfairly grouped under the gambling umbrella.”

To address this, the implementation of the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules (IT Intermediary Rules) will be instrumental in distinguishing legitimate operators from fraudulent ones. AIGF members, under our Skill Games Charter, have already adopted responsible gaming practices like self-exclusion tools, voluntary time and monetary limits, and cooling-off periods. These voluntary measures underscore the commitment of legitimate operators to safeguard players. By setting standardized industry practices, the regulatory framework will further reinforce responsible gaming and ensure consumer protection across the board.

Variations in state regulations and impact on growth

Vidushpat Singhania conceded that the differing legal landscapes across Indian states present both hurdles and opportunities for real-money gaming companies. He added, “Restrictive regulations in states like Karnataka compel companies to withdraw their services from such states or to engage in legal battles challenging the constitutional validity of such regulations, while states like Sikkim, with progressive regulations, offer avenues for expansion. While gaming companies strive to survive despite the extremities, the industry is in need of a uniform national regulatory framework, which would bring greater clarity and foster the gaming industry's long-term growth and development.”

The spokesperson from AIGF noted, “The diversity in state regulations undoubtedly presents a complex environment for real money gaming operators. While some states, like Sikkim, have embraced regulatory frameworks for skill-based gaming, others have imposed restrictions that conflate gaming with gambling. This inconsistent landscape demands that operators stay agile and invest heavily in ensuring compliance across multiple jurisdictions.

However, this also underscores the need for a central legislation which would not only offer clarity to operators but also ensure that consumers have access to verified, safe platforms regardless of their location.”

Anuraag Saxena, CEO, E-Gaming Federation (EGF), pointed out, “The legal disparities among Indian states, such as Karnataka’s previous ban on real money gaming (RMG) and Sikkim’s supportive regulatory framework, create a complex landscape for online gaming operators. While some states encourage growth with clear regulations, others impose restrictions that hinder market entry and expansion. This inconsistency amplifies operational challenges, increases compliance costs, and forces businesses to devise tailored strategies to manage legal uncertainties and regulatory changes. Furthermore, fragmented regulations can stifle innovation and limit consumer access to safe, well-regulated platforms, inadvertently pushing users toward offshore illegal operators.”

According to Saxena, “To address these challenges, the online gaming industry requires a uniform, forward-looking regulatory framework at the national level. Such a framework would streamline compliance, safeguard consumers, and foster innovation, allowing the RMG sector to grow responsibly. By taking these steps, we can establish Bharat as a global gaming leader while upholding the highest standards of trust, fairness, and integrity.”

Risks posed by unregulated RMG platforms

When asked about the risks associated with the large presence of unregulated or illegal real money gaming platforms operating in the country, Vidushpat Singhania explained, “The widespread presence of unregulated or illegal real-money gaming platforms in the country puts consumers at serious risk, disrupts economic stability, and weakens the country’s legal framework. These platforms not only make it harder for authorities to enforce the law but also hinder the growth of legitimate businesses in the gaming industry. To tackle these challenges, clear, effective and uniform regulations need to be introduced, backed by strong enforcement and efforts to educate players about the risks they may be exposed to. This will help create a safer, transparent and a more sustainable gaming environment for everyone.”

The AIGF spokesperson added here, “Unregulated platforms pose significant risks to both the gaming industry and its consumers. These platforms, often masquerading as legitimate real money gaming operators, are neither bound by local laws nor adhere to ethical practices. They exploit consumer trust and siphon significant revenues offshore, depriving India’s economy of valuable contributions and harming the reputation of domestic operators.”

These entities damage the credibility of India’s real money gaming industry, which is developed locally for Indian consumers. Reports indicate that such operators siphon off nearly $100 billion annually, resulting in significant revenue losses for the exchequer.

“AIGF remains committed to championing a safe and legitimate gaming ecosystem. By focusing on initiatives like blockchain-backed certifications and collaboration with other stakeholders, we aim to fortify consumer confidence and isolate illegal platforms that tarnish the image of the industry,” the spokesperson further said.

Anuraag Saxena, too, said that the rising prevalence of offshore illegal gambling platforms presents severe risks to consumers, the legal gaming industry, and India’s national security, financial stability, and data sovereignty. “This alarming trend highlights the challenges faced by the legitimate online gaming sector and its users. According to a report by the Centre for Knowledge Sovereignty (CKS), India’s illegal betting market is estimated to handle deposits worth $100 billion annually, with a projected growth rate of 30% in the coming years, driven by regulatory uncertainties,” he added.

The link between these illegal platforms and foreign entities raises critical concerns, including potential espionage and data breaches. Suspicious transactions tied to these operators are often channeled into money laundering and cryptocurrency purchases, undermining India’s financial integrity. Furthermore, these platforms engage in widespread data pilferage, exposing sensitive user information to misuse, privacy violations, and cybercrimes.

The Ministry of Information & Broadcasting (MIB) and the Department of Consumer Affairs (DoCA) have been actively combating the proliferation of these offshore illegal betting and gambling platforms. Their efforts are essential to safeguard users and maintain the integrity of India’s gaming ecosystem.

“At the E-Gaming Federation (EGF), we have consistently advocated decisive action against unscrupulous, fly-by-night operators who flagrantly violate laws and exploit users. We stand committed to working collaboratively with federal ministries and state governments to establish a standardized framework that will not only curtail illegal activities, but also foster the growth of a regulated, sustainable gaming industry that prioritizes consumer protection and promotes responsible gaming practices,” Saxena elaborated.

Framework for regulating real money gaming in India

There is growing support for a national framework for regulating real money gaming in India.

Speaking on the key features that this framework needs to include in order to ensure clarity and fairness for all stakeholders, Vidushpat Singhania said, “A national framework for regulating real-money gaming in India should provide legal clarity with respect to permissibility of games being offered, protect consumers from fraud, unfair practices and ensure data privacy, while fostering industry growth. This framework should include clear definitions distinguishing skill-based games from gambling and taxation thereon, centralized licensing and stringent consumer safeguards like age and identity verification, fair play audits, and grievance redressal systems.”

He further said, “Ethical, advertising, responsible gaming practices, and data security must be prioritized, along with strict penalties for violations. By enabling innovation, simplifying compliance, and involving stakeholders in the policy-making process, the framework can promote a fair, transparent, and sustainable gaming ecosystem while addressing societal concerns like addiction and illegal platforms.”

The AIGF spokesperson remarked, “A national framework should focus on building a robust, transparent, and fair system for the gaming industry. The IT Intermediary Rules already provide an excellent foundation by promoting self-regulatory bodies (SRBs). Expanding on this model, the framework should ensure SRBs are empowered to certify games, whitelist legitimate operators, and oversee adherence to industry best practices.”

Adding further, he said, “Critical features could include clear responsible gaming practices, including self-exclusion and user imposed time and spending limits, KYC guidelines, financial integrity checks, and mechanisms for grievance redressal. Additionally, processes to blacklist and ban illegal operators will reinforce consumer trust. This framework will not only protect players but also nurture India’s growing gaming industry by ensuring a level playing field and encouraging innovation among legitimate operators.”

Anuraag Saxena stressed, “The increasing support for a national framework to regulate real money gaming (RMG) in India underscores the pressing need for clarity, consistency, and fairness within the industry. As the online gaming sector experiences rapid growth, it is essential to develop a regulatory framework that addresses the diverse needs of all stakeholders, including players, developers, and regulators.”

A well-crafted framework should take a balanced approach, prioritizing transparency, fairness, and innovation. This will not only position India as a global leader in the online gaming industry but also safeguard the interests of all stakeholders. By eliminating legal ambiguities and ensuring that legitimate skill-based games are recognized and protected under the law, the framework can lay the foundation for sustainable growth. Additionally, it must incorporate robust consumer protection measures to shield players from fraudulent activities and guarantee fair play.

Saxena emphasised, “EGF is committed to contributing to the creation of this framework by offering insights from industry experts, representing operators’ interests, and collaborating closely with regulators. This collective effort will ensure the framework is effective, equitable, and reflective of the industry's unique challenges. Ultimately, such a policy will pave the way for a safer, more transparent, and thriving gaming environment for both consumers and operators.”

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