Understanding Recent Legal Changes in Indian Online Gambling

India is taking major steps to introduce legal online gambling in the country. Last year, just three states—Goa, Sikkim, and Nagaland—allowed online gaming. 

Then the government announced plans to amend the Information Technology Act of 2021. Under the new changes, online gambling could become legal in every state. 

The government initially planned to license remote gaming companies through Self-Regulatory Organizations. However, the Ministry of Electronics and Information Technology (MeitY) scrapped off those plans in November.

Continue reading to discover everything you should know about the recent Indian gambling law changes. Find out how these laws affect players, casinos, states, and other stakeholders in the industry.

Definition of Online Games

Last year’s amendment of the IT Act of 2021 defines online games as games that involve chance or skill. The government was trying to include all games in its definition, from mobile puzzles and eSports to online slots and poker.

Not everyone was happy about this definition. Just recently (February), the Karnataka government announced plans to regulate mobile gaming.

Some mobile game developers raised concerns over the usage of “online gaming” to describe gambling games. TRAI, the organization behind telecommunications, also complained about the lack of clarity when talking about online games.

IndiaTech, a lobby group representing tech companies, believes online gaming regulation should be conducted by MeitY. The ministry could create a better definition of gambling games for consistency and clarity.

Online Casino Regulation

As stated, the government’s original plan was to regulate online gaming through self-regulatory bodies. These organizations could have been responsible for verifying security and fairness in casino games of chance.

Following MeitY’s decision to get rid of SROs, uncertainties about who’s responsible for regulating iGaming arose. Some states believe they have the power to regulate online gambling.

In 2022, Tamil Nadu introduced a law to ban real money casino games. However, the state’s bill was halted by the Madras High Court last year. The state is now planning to amend its law and move forward with gambling regulation.

Karnataka is also working on a law to prohibit online casino games. However, State Home Minister G Parameshwara has been quoted saying the plan can’t succeed without the Central government’s approval.

Advertising Guidelines

One of the recent changes in India’s online gambling laws is designed to restrict advertising as much as possible. Online casinos can run limited ads on TV and the Internet. However, the ads must target adults only. They also can’t mislead players.

Online gambling companies are no strangers to advertising restrictions. They have faced similar laws in every country where iGaming is legal. In the UK, gambling companies can’t run TV ads for the most part of the day. They have to advertise late at night. 

Because of strict advertising policies, online casino companies have devised ingenious ways of attracting new customers. For example, they work with digital marketers through affiliate programs. 

Affiliate marketing is inexpensive yet effective for online casinos. They pay marketers commissions for new clients recommended.

Player Safety

One of the government’s obligations is to protect players from data theft, financial scams, and exploitation. Under the new policies, online casinos must provide tools to promote responsible gambling. 

They must run Know Your Customer (KYC) protocols to protect underage players. And they should have a policy for resolving disputes raised by players. The government also plans to vet every applicant to prevent untrustworthy operators from providing their services in India.

Unfortunately, Indian casino players will have to wait a bit longer before the government can decide how to regulate iGaming. The cancellation of SROs means there’s a vacuum in the Indian iGaming regulation space.

States, MeitY, and TRAI all believe they have a say in regulating online gambling. But until the issue is resolved, casino players will have to wait.

Taxation Policies Stand Unchanged

The 2023 update on the IT Act didn’t change proposed taxes on online gaming companies. For clarity, online casinos are India are subjected to three types of taxes:

  • Central Goods and Services Tax (GST): Online casinos must pay 28% of their betting handle as tax to the Central Government. GST tax is a standard tax applied to most businesses in the country.
  • State taxes: some states may add taxes on top of GST. For example, Goa charges an 18% tax on annual platform fees. 
  • Income Tax: Casinos are obligated to pay taxes on their gross earnings. In Goa, operators successfully lobbied the government to charge the GST tax on earnings and not bets placed last year.

Taxation in India can vary depending on the state. As such, new casinos in India must conduct proper research before choosing their target markets.

Online Gambling in India: What’s next?

Online gaming regulation in India is at a standstill. The government hasn’t made any new clarification on regulation plans ever since MeitY abandoned self-regulation. 

Although some states have initiated plans to regulate online gambling, none of them have made any meaningful strides. In light of that information, here’s what you should know:

Offshore Gambling

In India, online gambling is legal in Goa, Sikkim and Nagaland. If you live in one of these jurisdictions, you can play casino games legally. Nagaland permits poker and rummy only, while Goa and Sikkim allow both slots and table games.

That being said, offshore casinos based in Malta, Cyprus, and Curacao accept customers from all parts of India. Many overseas-based casinos have valid licenses and secure websites. They offer hundreds of slots and table games. 

However, casinos are not created equal. If you decide to gamble online, choose a safe and reliable online casino. Prioritize a site’s reputation. Ensure it offers your favorite game payment options.

Online Gaming Regulation to Start Later This Year

Many experts believe the government will create a regulatory body to license online casinos in the second half of the year. The recent election was a priority for many government departments, which is why there has been a vacuum on the issue. If you’re a casino player, investor, or marketer, you can look forward to new government updates soon. 

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