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Legal Gambling Vs. Illegal Gambling in India



Gambling can either be legal or illegal – it depends on the laws in your territory. The difference between the two is the circumstances that surround the activity. The Indian gambling industry is the largest or fastest in the world as of 2021. You must have expected it to witness the activity of both legal and illegal gambling.

The legality of gambling in India is a complicated topic to discuss. The complications are due to the laws that guide gambling activities in the country. The Indian central government is passive about gambling while the state government makes the regulations. Meanwhile, there exists the public gaming act of 1867 that forbids public betting in India.

What Factors Define Legal and Illegal Gambling In India?

The definition of legal and illegal gambling revolves around the confinement of the state where gambling activities is carried out. Generally, there is a law that prohibits gambling activities in India. The law is called the Public Gaming Act of 1867. The British ruler of India promulgated it during the colonial era.

The act states that operating a gambling house or assisting in its operation is a crime. It went further to criminalize visiting gambling shops and financing such. The penalty for all these offences is a fine of atleast 200 Rupees or three months imprisonment. Up till now, the law has not been repealed but remains obsolete.

The Constitution of India gives each state the right to legislate and formulate laws that will guide gambling. It explicitly says that states may choose to legalize or penalize gambling as the case may be. As a result, states in India consider gambling a crime while others have legalized gambling. This is precisely why the central law that prohibits gambling became obsolete.

Currently, only 13 states legalize gambling activities such as the lottery in India. Meanwhile, just Goa and Sikkim have legalized more than the lottery. These two states also legalized casinos and other forms of gambling. The legalization of gambling in these states is done with regulations and policies from the state government.

Judging by the situation of things in India, we can derive four factors that differentiate between legal gambling and illegal gambling in India. Each of the factors is considered below;

  • State of operation

Gambling activity in India is legal or illegal, depending on the state where it is operating. Only 13 states in India have permitted gambling activity. Out of the 13 states, 11 states permitted lottery gambling alone. The remaining two states, Goa and Sikkim, legalize other gambling such as casinos and bingo.

Therefore, you must ensure that you identify the stance of the state on gambling before participation. Involving in gambling activity in a state where it has not been legalized is illegal. For instance, playing a casino in a state where only the lottery is permitted is also a crime. The penalty is either a fine or a short time imprisonment if caught.

  • The casino license

Another factor that differentiates between legal and illegal gambling in India is the license. Licensing is an integral part of gambling. A recognized government agency must duly license every gambling activity. A gambling activity without a license is illegal.

In states that legalized casino playing in India, the license requirement is different. The Goa state demands that every land-based casino must be regularized and licensed by the state government. Sikkim state also demands that all casino platforms must have a license from the state government. Likewise, Sikkim is the first state in India to legalize and license online gambling.

However, online casinos with a license from a recognized government under the European Union jurisdiction are exempted. This makes it easy for Indians to use online casinos with a license from a country such as the United Kingdom. Such online casinos are legal since they satisfy the payment regulations as dictated by the reserve bank.

  • Payment option

The payment options available in a gambling platform can determine whether it is legal or illegal. There are two primary laws in India addressing the transfer of money. The first law demand that the Reserve bank of India must regulate all electronic payment. Therefore, all available gambling sites like Online casinos in India must integrate third-party payment options recognized by the reserve bank.

The second part of the law demands that you do every transaction on online gambling in the Indian rupee. Deposit and withdrawal on online casinos and other online gambling must be in India rupee. By implication, every online gambling that does not support the Indian rupee is illegal in India. This has been the reason behind the inconsistency of e-wallets like PayPal and Neteller in India-based online casinos.

  • Game offer

Another law in India that differentiates between legal and illegal gambling is the game offerings. Indian law puts a preference on gambling with games of skills other than games of luck. It is a complex law in the Indian gambling space, which keeps facing intense criticism. As a result, there is continual gambling in sports such as cricket and horse racing.

Games such as Rummy which involve memorization and Rummy calculation, are legal under this category. Horse betting, lotteries, and cricket betting are entirely games of luck. This is because the outcome of the game does not involve the player’s effort. As such, under federal law, these games are considered illegal gambling.


Meanwhile, since the states have the liberty to enact their gambling policies, some games become legal. Betting on horse racing, cricket, and lotteries is legal based on the disposition of the state. There are efforts to make cricket and horse racing gambling entirely legal in India.


There is a proper habit of gambling in India. The legality of gambling in India is a complex topic as it revolves around many laws and regulations. However, you can define legal gambling in India by the license and the payment method. All gambling activity in India must carry out its transaction in India Rupees. The license must be from India or a recognized European Union jurisdiction.

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