Legality of playing real money games online

Games are not just games anymore, they have evolved into something more than just a means of passing time in today’s world. They have shaped into something where fun and returns both go hand in hand. Points earned from a game have been replaced with actual money deposited into the user’s bank account.

There are few things to keep in mind before starting to play games online. One such thing is the legality of such games. Is it permitted in the country? Is it legal or illegal? What are the tax implications on such games? Having clear answers to such questions before getting into online gambling is very important. Luckily, today we are here to understand the legality of playing real money games online and online casino apps

Skill-based games vs. luck-based games

Before getting into the legalities, let’s understand the difference between Skill-based games vs. luck-based games. Games that are purely based on the skills of an individual with games that are entirely dependent on the luck factor have predominantly existed in the country for a long time. Both the type of games has its nuances and complications. While skill-based games require the players to prepare, work out strategies, tone and build their skills, put in a lot of effort for winning the games, luck-based games require the players to participate, and the actual chances of winning are dependent on the probability.

Puzzle-based games, games involving collectible cards, video games helping develop problem-solving, eye-hand coordination, cognitive skills, and many more can be classified under skill-based games. Games involving the usage of dice, casino games, sports betting, lottery games, card games, etc., come under chance/luck games.

Laws of online games in various states:

Moving forward, the legalities of gambling in Indian states are determined by the game of skills vs. the game of chance.

In India, the governing law for handling gambling is the Public Gambling Act of 1967 introduced by the British Colonials. This law is directed from categorizing games based on skill and chance, thereby making it clear what is gambling and what is gaming. Notably, this law applies to many provinces from the British era, but states like UP have adopted and implemented the act. This law enables physical gambling restrictions, so the limits on online gambling are still unclear with this law.

India doesn’t have specific laws for governing online gambling. However, the center has delegated the powers of creating laws to state governments for controlling gambling in the country. Many Indian states have restricted gambling while some permit gambling. Keeping in mind the aspects of tourism and pressure on generating revenue from the same, the latter has some relaxation related to gambling within a few states.

To give a further picture on states that have taken legal measures for controlling online gambling are –

Kerala, Tamil Nadu, and Andhra Pradesh have banned online games that involve playing for stakes. Exemptions have been given for games that involve the use of skills to win the games.
Karnataka has planned to impose certain restrictions for the same.
Rajasthan has imposed specific penalties for those involved in online gambling.
Sikkim has restricted gambling in Casinos for the locals and has kept it open only for people entering Sikkim from outside the state or country. Even this is also possible only after providing the proper documents of identification. However, only a license is required to get involved with online gambling. These would be the same laws for the state of Nagaland.
In West Bengal, games like poker, rummy, and bridge are not considered gambling and are excluded from the law implemented on gambling.
Goa has no restrictions on online gambling, and many games have been legalized in the territory.

With definite complications in understanding gambling, the Supreme court has made certain guidelines that indicate that games of chance involving luck are called gambling and considered illegal. Games of skills that involve the players to analyze, strategize and play are considered to be legal.

Online game legalities in various other countries:

Here are some of the details of laws in multiple countries that oversee online gambling –

The list of countries that have a complete ban over online gaming considering its crime and illegal aspects are the United Arab Emirates, Cambodia, Brunei, North Korea, Japan (certain physical gambling have been legalized recently), and Singapore.
With certain yet stringent restrictions, countries like Lebanon and Poland have allowed online gambling.
Places in the UK and the US have imposed restrictions on gambling based on the nature of games and how the players play them. For example, the Interstate wire Act of 1961 in America restricts interstate gambling using wired systems. This, however, has exemptions wherein if both the states have legalized systems, the restrictions are lifted.
Mexico has a code of Gaming restrictions, which governs online gambling.
Gambling in the United Kingdom is primarily governed by the Gambling Act of 2005.
Australia has control over the people getting involved with gambling through the Interactive Gambling Act of 2001.

The debate of gambling has been going on for a long time, and with various restrictions tailored upon the level of gambling, countries across the globe have enabled the legality of playing real money online games.

The legality of horse racing and betting:

Gambling on horse racing is not new and has been existent in India for a long time. The legality of the game has been debated and argued in the court multiple times, following which the Supreme court declared the game to be considered legal in the country. The concept of skill vs. chance ascertained this.

The question of gaming and gambling in India was addressed first in the State of Andhra Pradesh vs. K. Satyanarayana and Ors. Horse racing involves proper training and feeding of the horses, the horse’s health, the nature of race, and many more complexities that cross the line of the game of chance. It is considered a game of skills, and the betting would be regarded as legal because the players would have to assess and evaluate the horse’s skills. This gives absolute control over the results for the players and is therefore not considered to be illegal.

Lottery and its legalities:

Lottery games have also been a prevalent form of gambling for quite a long time in India. Lottery is played through a random drawing of numbers, and if the purchased tickets have the numbers drawn, then the holder of the ticket wins the lottery and money. This form of gambling has been governed in India by The Lotteries (Regulation) Act, 1998. The law states that –

The regulations and mandates apply to the entire country of India.
This act indicates the state is prohibited from promoting, conducting, and organizing lotteries and has a complete ban on the system of lotteries.
When the states want to run a lottery business, Section 4 of the Act has administered the need to follow specific protocols, which have to be essentially followed. These protocols are that –

Only state-run lotteries are permitted, and no private entities would be given the authority to run lotteries.
The sale proceeds from the lottery tickets would go directly to the treasury of the government.
All the lottery tickets will have a logo to ensure there are no duplicate tickets in circulation.
The lottery prizes will not be announced prior, and only six lotteries can be conducted in a calendar year.

These are some of the implications of the law in India governing the legality of gambling in India.

The legality of depositing and withdrawing:

There are various complications subject to multiple risks when it comes to depositing and withdrawing gambling money. After winning a real money gambling game, the money would be deposited in the bank account. When this money is withdrawn in bulk, there are chances for the bank to take note of it and freeze your account, which will prohibit the users from making further transactions with the account.

Following this, the bank may enquire the account holder on the source of income for the money withdrawn or deposited. With gambling considered illegal in many states of the country, the deposits and withdrawal of such funds may lead to many legal issues. Check out our article on taxes on gambling winning.

So, ensure to play safe and manage your account and winnings smartly!

Conclusion:

On that note, these are the legalities involved in real money online games in India. Although gambling has been considered illegal, many other skill-based games are still legal. The majority of the games for which the outcomes are based on the individual’s skills have been given legal approval from the governing bodies.

Such games have no or very few restrictions, thereby making them more accessible to many people. With the right regulations to handle online gaming that generates real money, no possible legal issues arise from playing such games. So, considering the aforesaid, keep worries at the bay and enjoy safe gambling on the online casino.