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Process of operating in India

Disa Stigh

Estimated Time 12 min

September 11, 2020

People have gambled in the Indian subcontinent for several years. People played traditional Indian games like Andar Bahar and Teen Patti, from the smallest of villages to the biggest of palaces. Those games were played for centuries, perhaps even millennia, without any gambling legislation to regulate them. After the British arrived, and after effectively colonising the entire Indian subcontinent, the British authorities decided to impose their morals and ethics on the Indian population by enacting the first gambling law of the country by the mid-1800s. This was to become known as the 1867 Public Gambling Act which was the first law to completely outlaw gambling in India.

More than 150 years have passed and the government has done nothing to alter or amend the old 1867 law. The law is still in force in most of India to this day, except for a few states that have chosen to enact their local gambling regulations. But how does this law take into account the issue of online gambling in India? The answer is they do not. Online gambling was not a thing back in 1867, so it is not mentioned by law.

What does this mean?

So, does that mean that we should assume online gambling to be legal in India because online gambling is not mentioned in the law of 1867? Well, technically yes. India has a vast population of well over a billion people. It is probably not surprising, therefore, that there are a lot of people who enjoy gambling in this region. Sports betting is very popular, especially on cricket, as is horse race betting. Casino gaming and card games are also popular pastimes.

What forms of gambling are accepted in India?

Despite the popularity of gambling in India, most of its forms are technically prohibited. There are exceptions, but it is very little in the way of legalised and regulated gambling. Most of the legislation on gambling is very outdated and decidedly unclear. This is particularly true when it comes to online gambling.

As a result, it is very difficult to determine exactly what is legal and what is not in India. The legalities of gambling have been the subject of extensive debate in the nation for many years, but there has not been much progress in terms of clarifying things. Here, we will explore the subject as best we can, by looking at the legislation which is in place and how it can be interpreted and what can you expect if you want to start an online casino in India.

General gambling legislation in India

The Public Gaming Act of 1867 was initially applied only to the ten states which were under British control at the time but were subsequently amended to incorporate all other states. There have been some other amendments too, but the laws remain in place even though they are over 100 years old.

The Public Gaming Act made it illegal to operate a site where gambling took place. It has also made it illegal to visit such a venue. While this is clear enough, there is no precise definition of gambling in the act. This makes it difficult to determine, for example, whether a cricket game bet is illegal in the same way that a dice roll bet could be. It could be argued that cricket betting is skill-based, and therefore does not fall within the scope of the act while betting on the dice roll is based on pure chance.

Lotteries in India

Lotteries are one form of gambling that is not strictly prohibited in India. This makes even less sense because lotteries are the ultimate games of chance with absolutely no skill involved. 

However, the Lotteries (Regulation) Act of 1998 was passed to govern the operation of lotteries.

Although the act was passed at the central level, it essentially gives the state governments the right to authorise lotteries within their jurisdiction. The act stipulated that a maximum of one draw per week should be allowed, but this is not something that seems to be enforced too rigidly.

Casino gambling in India

Casino gambling is an umbrella term that includes slots, table games, etc. Poker and rummy, along with sports and fantasy betting (Dream 11 and so on) regulations are entrusted to the separate State Governments and their legislators. These games are considered to be games of skill and as such, have provisions within the law, making them legal to be played online.

Land-based casinos operate in Goa, Sikkim, and Daman. Initially, according to the Goa, Daman and Diu Public Gambling Act, 1976, casinos could be set up only at five-star hotels or offshore vessels with prior government permission. Nowadays, things are evolving but not in a uniform manner.

Online gambling in India

The Public Gaming Act of 1867 does not refer to online gambling. This is no surprise, given that the Internet was a long way from being invented when this law was introduced. It could be argued that operating a gambling website in India is considered illegal under the terms of this Act, given its wording, but this is far from clear. Many of the major gambling sites welcome Indian customers, but because these sites are operated overseas they aren’t necessarily governed by Indian law. As such this does not, by itself, mean that using a gambling site from within India is legal.

The IT Act of 2000

Another legislation could be considered related to online gambling: the Information Technology Act of 2000. This makes provision for various offences relating to online gambling, although there is again no specific mention that online gambling is illegal. It does, however, give the Indian Government the power to block foreign websites. The Government has used this power to instruct Internet Service Providers to prevent Indian residents from accessing certain foreign betting and gaming sites, but we are not sure how effective this has been or which sites have been blocked.

At the state level, two states have introduced legislation specifically on online gambling. In Maharashtra, this is completely prohibited, while in Sikkim, the government now has the authority to issue licences to operators wishing to provide online gambling services within the state. This is a significant step forward for regulated gambling in India.

Some of the points that casino operators need to consider for starting the online casino in India are mentioned below:

  • Choose a reliable gaming software provider

This is one of the most crucial decisions for starting your gaming business in the country. Evaluate the existing options which are available and choose the gaming software provider who has prior experience of launching some of the successful casino products in India.

  • Obtain a gaming license and fulfil regulatory requirements

While the exact requirements are different for each license, some of the typical requirements for an online gambling license include:

  1. Ensuring that the owners and executives of the online casino are suitable to run an online casino.
  2. Ensuring proper accounting procedures are in place like making it mandatory that customer deposits are always protected.
  3. Ensuring the games on the site are completely fair.
  4. Ensuring procedures are in place that discourages gambling addiction and underage gambling.
  5. Ensuring there is proper customer support available for the players.
  • Choose payment system provider

When you will be starting your online casino, you have to agree with the payment system provider too so that all your players will be able to quickly and easily make transactions. It is best for the gaming operator to look for the providers who have the provision for the multiple payment gateways. Look into the provisions which can be smoothly transacted in India.

  • Work on your website’s design

The way your website looks is very important. To make sure you are on the safe side, follow a few basic recommendations:

  1. Do not overload your site with unnecessary graphics or elements that might slow down your website and affect the overall gaming experience.
  2. Do not go into complicated and resource-demanding graphics.
  3. Make sure your front end assures seamless integration with your database.
  • Implement a sound marketing strategy including loyalty and retention programs

When you have taken care of everything else, you’ll need to focus more on marketing your new online gaming business. Find out what your competitors are doing right and what they are doing wrong so you know what mistakes to avoid. Your main aim should be to position your online casino as a high-quality, reliable business.

Parting thoughts

Starting the business of an online casino is a daunting task. Regional frameworks are important for each operator, not only from a legal point of view but also because each player in the industry must develop and supply products that are specifically tailored to a specific jurisdiction to ensure a high level of compliance.

There is a need to make ongoing efforts to maintain high standards and to keep your customers fully satisfied. At the end of the day, it’s your software provider’s joint effort and your marketing and sales departments that need to align to get your business moving forward.

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