Games, whether in the form of gambling or popular social or casual games, are enjoyed by people of all age groups across the globe for their entertainment value. In fact, despite its many vices, gambling has been a part of Indian culture since time immemorial. Even before the six-sided dice were invented, Indians used the nuts of the Bibhitaki tree as dice. The gaming industry has witnessed a paradigm shift with the evolution of television, digital and online gaming models.

The rapid growth of online card games, like Poker and Rummy and new age games, like fantasy sports, are the best evidence of the popularity of online gaming. Gaming, as a whole, has gained significance over the years as a significant source of income and a profitable business venture worldwide.

The gaming sector has seen bourgeoning growth during the pandemic, and India does not have a comprehensive legal framework in place to promote the industry. Technology has far outpaced regulation. Gaming laws in India remain dated, and as a result, their application to online structures remains complex. The dichotomy between the Centre and states, coupled with divergent views of various courts in India, make it difficult for companies to have clarity on permitted activities in the sector.

However, “betting and gambling” is a subject of the state list as per the constitution of India, and that is where the ambiguity arises. Different states have different take on “betting and gambling”. Online gambling and betting platforms are entirely unregulated by the laws, which have now turned the heads of the lawmakers of the country.

The Supreme Court ruled in Dr K.R. Lakshmanan v. State of Tamil Nadu that the outcome of a game of chance is entirely or partially decided by a drawing or by luck. “All forms of chance” include rolling the dice, spinning the wheel, and dealing with the cards. The element of uncertainty or doubt is the crucial differentiator. “Until the dice have been thrown, the wheel stops turning, or the dealer has dealt the cards, no human intellect knows or can know what it will be.”

On the opposite note, a game of skill is one in which success primarily relies on the vast understanding, training, attention, experience, and adroitness of the player—although the element of chance must inevitably remain. Games of skill include activities like Rummy, Golf, and Chess.

Under Section 12 of the Gambling Act, “game of skill” is exempt from regulatory oversight. The Supreme Court characterized a “game of skill” as “one in which success relies primarily upon the extensive expertise, training, attention, experience, and adroitness of the player” in the case of Dr R. K. Lakshmanan v. State of Tamil Nadu.[1]. The court made the distinction between a game of chance and a game of skill, stating that a game of chance is one in which the element of chance predominates over the element of skill. The dominant factor, whether “skill” or “chance,” establishes the fundamental nature of the game.

Indian Judiciary has, over the years, attempted to provide a definite parameter as to what comes under the game of skill and the game of chance. However, this parameter is not perfect and still evolving on a case-to-case basis. In order to regulate the online gaming industry, it was necessary to bring out a law which was applicable to all the states and dissolve the plethora of rules, as each state had its own set of regulations governing betting and gambling.

In the year 2022, the lawmakers proposed a bill called the Online Gaming (Regulation) Bill. This is the first and most crucial attempt by the lawmakers of the country to provide for a law that would govern all online gaming platforms ranging from fantasy sports to gambling sports.

[1] Dr R. K. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.

In accordance with the Bill, “Online Gaming” refers to any game performed on electronic gadgets like desktops and laptops, cell phones, tablets, and other devices. The fact that the definition does not distinguish between a “game of skill” and a “game of chance” makes it clear that the Bill seeks to control all games played on these electronic devices.

A regulatory body called the Online Gaming Commission (OGC) would be established under the terms of the proposed legislation. The OGC will have five members, all of whom will be nominated by the central government and include at least one specialist in each law, cyber technology, and law enforcement field. The OGC will have the authority to, among other things, monitor the operations of online gaming websites, produce periodic or one-time reports on related subjects, recommend reasonable steps to control and stop illegal online gaming, grant, suspend, and revoke licences for such websites, and set fees for licence applications and renewals of such websites.

The proposed legislation would make it illegal to play online games without a website and a non-transferable, non-assignable authorization. Operating an online gaming server or website without the necessary licence is punishable by up to three years in jail and a fine. Six years will pass before the registration expires.

If the licensee violates any of the license’s terms or Bill’s provisions, the licence that is intended to be granted under the Bill may be suspended or revoked. The Bill does not, however, apply to anyone in India who offers backend services, such as hosting and upkeep for any international gaming website located outside of India.