While the Centre is attempting to impose a blanket ban on all online gaming involving stakes, a similar attempt by the Karnataka government was thwarted by the Karnataka High Court in 2022. On 12 August, the Supreme Court reserved its judgment on the legality of the government’s 2023 move to retrospectively impose a 28 percent GST on all online gaming companies—whether games of skill or games of chance. The GST was applied to not just the platform fees or the revenue for the companies, but the entire face value of the bets. The rules even disallow intermediaries to host or display any advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game. This will help to address the growing menace of online ads of illegal betting and gambling operations targeting Indian users.

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• In case of a dispute, it becomes very difficult to solve the problem jurisdictionally as the other party could be in a foreign land as well.
• As against this, states like Telangana, Tamil Nadu, Andhra Pradesh and Karnataka have passed laws attempting to restrict the online gaming space.
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In its judgment, the court questioned that if games of rummy and poker were considered games of skill when played physically, would they be considered games of chance just because they were being played online. It observed that “in online games of rummy and poker also, the same brain activity would be involved as required for offline games of rummy and poker,” and asserted that online versions would also be games of skill. While the high court upheld this amendment, it set aside the inclusion of rummy and poker as games of chance. The Promotion and Regulation of Online Gaming Bill, 2025, which was passed Wednesday in the Lok Sabha, completely prohibits “online money games”, including fantasy sports like Dream11, online betting and gambling activities, online casino games, including poker and blackjack, and online lotteries. However, it carves out an exception, allowing e-sports like Dota 2 or Counter-Strike, and online social games, like Candy Crush or Ludo, which are purely for recreational or educational purposes, and don’t involve money.

What is online gaming and real-money gaming (RMG)?

Moreover, it fails to make a distinction between games based on skill and games based on chance while banning it. This article critically examines the Act’s structure, implications, and enforceability, and proposes a more proportionate regulatory alternative. The blanket ban on online money games (skill-based) also amounts to a denial of the constitutional right to livelihood for thousands of professional players who earn a living through skill-based platforms. By banning all online games without a distinction between skill and chance, the Act arbitrarily extinguishes a legitimate source of livelihood, violating Article 2126 of the Constitution which guarantees the right to life and personal liberty, including the right to pursue a profession. In a small region with few industries and sparse population, the state of Sikkim needs to rely on other sources for its revenue. The Himalayan state has one of the most liberal laws on the subject in the country, with allowance to casinos in five-star hotels as well as online and paper lotteries.