The Legality Of Betting Apps In India - An Analysis Of Regulatory Gaps And Policy Challenges
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Category: Administrative & Regulatory Law
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THE LEGALITY OF BETTING APPS IN INDIA: AN
ANALYSIS OF REGULATORY GAPS AND POLICY
CHALLENGES
Devansh Tiwari, LLM, APS University Rewa M.P., B.A.LL.B. (Hons.), DAVV Indore M.P.
ABSTRACT
This The objective of this paper is to examine the complex and legal aspect of online betting applications that are very active in Indian sub-continent. Gambling being considered morally and legally wrong in India still online betting application are thriving here, a little reason for that could be that they being governed by ancient gambling acts which have no significance in the modern era. Millions of users are getting attracted to these online gambling applications and as a result these applications are involved in generation of large economic activities. These applications continue to operate using the loopholes in law governing such activities thus resulting into questions like whether the Indian legal framework is up to the mark/well equipped in dealing with challenges placed by online betting/gambling applications.
The paper begins with analysing the fragile Indian legal framework, which provides a law of colonial times like Public Gambling Act 1867, a few inconsistent state laws, and unclear provisions of the Information Technology Act 2000, to deal with modernized online gambling/betting activities. Ther is no definite centralised legislation to deal with these applications and to keep a check on them, thus these applications exploit the grey areas of the law, especially by making themselves appear as a “game of skill” rather than a “a game of chance” a thin line of difference that separates one from the other. This paper also evaluates the judgements that have made these applications legal in the country and helped them in getting a legal status.
Landmark Judgements have legitimized these applications by placing them in the category of “skill based games” because of these kinds of judgements these applications get protection and get a proper defence mechanism for their future litigations. The paper also gives a glimpse on various reasons why the applications are still able to operate in country even after containing various problems and ill effect on society. The digital betting industry contributes significantly to tax revenues, employment, and innovation, making it economically valuable. At the same
time, jurisdictional challenges (such as foreign hosting and VPN use), combined with inconsistent state-level enforcement, make regulation difficult. Politically, there is often little incentive for governments to act decisively against these apps, especially when they are backed by powerful investors and cater to a large base of tech-savvy young users. Ultimately, the paper talks about the urgent need in reforms to legislation in respect of online betting/gambling applications. It concludes with a set of policy recommendations designed to bring clarity, consistency, and accountability to the regulation of online betting in India. These include enacting a dedicated central legislation, establishing a regulatory authority for digital gambling, implementing robust consumer protection measures, and drawing lessons from international best practices.
By integrating legal, economic, social, and political perspectives, this research aims to provide a nuanced understanding of why betting apps continue to thrive in India despite considerable legal and ethical challenges, and what can be done to address the growing regulatory vacuum. Introduction Betting and gambling is a debatable topic in India, largely because of the legal, moral, and social issues they raise. Although the country has legislations that try to regulate these activities, most of them were written long ago—some dating back to the 19th century—and are not well-suited to today's digital/online era. Moreover, these legislations are not consistent and vary from state to state. While some states strictly ban all forms of gambling, others allow certain types, such as lotteries or horse racing.
This patchwork of laws creates confusion, especially when it comes to online betting. In recent years, the explosion of online betting apps has made the situation even more complex. These apps allow users to place bets on sports, fantasy games, or other events with just a few taps on their smartphones. What makes things even trickier is that many of these platforms are headquartered or operated from outside India. Even though they’re technically based abroad, they remain fully accessible to users in India through the internet. Because India’s existing laws don’t directly address online betting, these apps take advantage of this legal grey area. They often classify themselves as “games of skill” to avoid being labelled as gambling—a term that carries stricter legal consequences.
As a result, they continue to operate and grow in popularity, even as concerns rise about addiction, fraud, and the lack of
consumer protection. Historical Context of Gambling Laws in India India’s main law governing gambling, the Public Gambling Act of 1867, is a colonial-era statute that was introduced long before the invention of the internet—over 150 years ago. This law makes it a criminal offense to run or be in charge of a gambling house. However, it makes an important exception for what it calls “games of skill. ” That means if an activity is determined to rely more on a person’s ability or strategy rather than pure luck, it may not be considered illegal gambling under this law. This distinction between games of skill and games of chance has become central to many legal arguments, especially with the rise of online platforms. However, the way this law is applied varies widely across the country because gambling is a state subject under the Indian Constitution.
Specifically, it falls under Entry 34 of List II in the Seventh Schedule, which gives individual states the power to make their own laws on gambling and betting. As a result, what is legal in one state might be completely banned in another. For example, Goa and Sikkim have legalized certain forms of gambling, including casinos and online betting, under state-specific regulations. These states view gambling as a source of tourism and revenue and have set up their own licensing systems. On the other hand, states like Gujarat, Bihar, and Tamil Nadu have strict prohibitions and take strong action against both physical and online gambling activities. This lack of consistency across states has created a fragmented and confusing legal environment, especially as technology continues to evolve.
Online betting apps and websites operate in a space that many existing laws were never designed to regulate. The outdated nature of the central law, combined with varying state rules, leaves regulators struggling to address the rise of digital gambling. This legal patchwork makes enforcement difficult and creates loopholes that many betting platforms exploit to keep running, often without facing legal consequences. Technological Evolution and the Rise of Betting Apps Over the past decade, mobile applications offering real-money betting—including sports betting, online casino games, and fantasy sports—have seen a massive surge in popularity across India. Well-known platforms such as Dream11, MPL (Mobile Premier League), Betway,
My11Circle, and several others have attracted millions of users, many of whom engage with these apps on a daily basis. What sets many of these platforms apart is their strategic classification of offerings as “games of skill” rather than “games of chance. ” This distinction is not just a marketing choice—it’s a legal maneuver that helps them bypass India’s strict antigambling laws, especially in the fantasy sports sector where players create virtual teams based on real-life performance data. This rapid growth has been fuelled by a combination of affordable internet access and widespread smartphone penetration. The rollout of 4G and competitive data pricing, especially after the entry of telecom operators like Reliance Jio, made mobile internet available to even rural and low-income populations.
As a result, these betting apps are no longer limited to urban tech-savvy users—they’ve found a massive audience among young people across India. Moreover, the current lack of strong digital regulation has further enabled the expansion of these platforms. Unlike traditional gambling venues that are easier to monitor and control, online apps can be accessed from anywhere, at any time. Many of them operate servers outside India or are registered in jurisdictions with lenient online gambling laws, making it hard for Indian authorities to track or shut them down effectively. The youth, in particular, have become a major target for these platforms, attracted by slick marketing, sponsorships in major sporting events, and the allure of quick money.
This growing influence raises serious concerns about addiction, financial risk, and the lack of consumer protection, yet there remains no comprehensive national framework to govern or restrict their operations. The unchecked rise of these apps has highlighted the urgent need for updated laws and digital safeguards to address the challenges posed by real-money online betting in modern India. Current Legal Framework Governing Online Betting There is no comprehensive central law regulating online betting. The legal framework consists of: Public Gambling Act, 1867 India’s primary legislation on gambling, the Public Gambling Act of 1867, was enacted long before the advent of the internet or digital technologies. The Act primarily addresses traditional
forms of gambling such as operating or visiting public gambling houses. However, it is completely silent on online gambling or betting, as these concepts did not exist at the time. As a result, the Act lacks specific provisions to regulate or prohibit gambling activities conducted over the internet, leaving a significant gap in the legal framework regarding online betting apps. Information Technology Act, 2000 The Information Technology Act, 2000 (IT Act) governs digital activities in India and provides authorities with the power to block or remove online content deemed illegal or harmful. While the IT Act grants certain enforcement powers related to cybercrime and digital offenses, it is not specifically designed to regulate or control online gambling.
Thus, while it can be used indirectly to restrict access to illegal gambling websites or apps, it does not comprehensively address the unique challenges posed by online betting platforms, such as licensing, player protection, or dispute resolution. State Laws Since gambling is a state subject under the Indian Constitution, individual states have the authority to enact their own laws regulating or prohibiting gambling activities, including online forms. For instance, Tamil Nadu passed the Prohibition of Online Gambling and Regulation of Online Games Act in 2022, making it illegal to operate or promote online gambling within the state. This law specifically targets online betting apps and provides penalties for operators and users alike.
However, such state-specific laws contribute to a patchwork of regulations across India, with some states imposing strict bans and others adopting more permissive stances or no clear regulations at all. This diversity creates confusion and complicates enforcement, especially given the borderless nature of the internet. Fantasy Sports Rulings Judicial interpretations have played a crucial role in shaping the legal status of online betting, particularly in the domain of fantasy sports. The Supreme Court of India, along with several High Courts, has ruled that fantasy sports games—such as those offered by Dream11—are predominantly games of skill rather than chance. These rulings exempt fantasy sports from the definition of gambling under Indian law, allowing such platforms to operate legally in many
states. Courts have emphasized that success in fantasy sports depends on users’ knowledge, strategy, and analytical skills, which distinguishes them from pure games of chance and exempts them from gambling prohibitions. This judicial stance has encouraged the rapid growth of fantasy sports apps but has also added to the legal complexity surrounding online betting. The result is a patchwork of inconsistent policies and unclear enforcement protocols. Judicial Interpretations and Landmark Cases Indian courts have played a pivotal role in shaping the legality of betting apps, particularly in distinguishing between "games of skill" and "games of chance. " This distinction determines whether a platform falls under the ambit of gambling laws. • K. R. Lakshmanan v.
State of Tamil Nadu (1996): This case became a landmark in the legal discourse around what constitutes a "game of skill" versus a "game of chance"—a distinction that has critical implications under Indian gambling laws. In this case, the petitioner, K. R. Lakshmanan, challenged the Tamil Nadu government’s move to ban horse racing, arguing that the sport was not a form of gambling but rather a legitimate game of skill. The central question before the Court was whether betting on horse races could be considered gambling and thus be subject to prohibition under the Public Gambling Act and relevant state laws. The Supreme Court ruled in favor of Lakshmanan, holding that horse racing is predominantly a game of skill, not chance.
The Court observed that winning in horse racing depends on a complex understanding of various factors—such as the form and fitness of the horse, the skill of the jockey, track conditions, and the strategy used— which requires a high degree of knowledge, analysis, and judgment. As a result, horse racing could not be lumped into the same category as traditional games of chance like dice or roulette. This judgment set a critical legal precedent for the classification of certain activities as skill-based, thereby excluding them from the definition of gambling under Indian law. Over time, this precedent has been widely cited in defence of various other activities, most notably fantasy sports, online card games like poker and rummy, and even some
forms of e-sports. Betting platforms have used the rationale from this case to argue that their offerings involve skill-based decision-making and thus should not be considered illegal gambling. However, critics argue that such interpretations are often stretched beyond their original intent, particularly in the online betting space, where the line between skill and chance is increasingly blurred. Despite that, the K. R. Lakshmanan ruling remains a cornerstone judgment that continues to shape India’s evolving legal stance on betting and gaming activities. • Varun Gumber v. Union Territory of Chandigarh (2017): This case is frequently cited as a key legal foundation for the continued operation of fantasy sports platforms like Dream11 in India.
In this case, Varun Gumber, a resident of Chandigarh, filed a petition against Dream11, claiming that the platform was engaged in illegal gambling and should be banned. He argued that participating in fantasy sports on Dream11 required users to pay money in the hope of winning more, which essentially constituted a form of wagering or betting—activities prohibited under the Public Gambling Act and similar state laws. However, the High Court rejected the petitioner’s claim, ruling in favor of Dream11. The court observed that fantasy sports contests on the platform were games of skill, not games of chance. The judgment highlighted that users must carefully analyse the reallife performance statistics of players, understand match conditions, assess team balance, and apply strategic thinking to select their virtual teams.
Success, therefore, depended more on a participant’s knowledge and expertise than on luck. The Court further emphasized that because the outcome of these fantasy games was determined by the user's skill and judgment in selecting the right team combination, and not by random chance or external betting, it did not fall within the purview of "gambling" under Indian law. As a result, Dream11 and similar platforms could legally operate in jurisdictions where games of skill are exempt from gambling prohibitions. This ruling set an important legal precedent for fantasy sports in India. It gave platforms like Dream11 a strong judicial backing, allowing them to defend their business models
against future legal challenges. Since then, other high courts—including the Bombay High Court and the Rajasthan High Court—have upheld similar views, reinforcing the idea that fantasy sports require substantial skill and are therefore not illegal. However, the decision has not ended the debate. Critics argue that despite the skill element, the involvement of real money and the addictive nature of such platforms bring them dangerously close to gambling, especially when targeted at vulnerable youth. Nonetheless, the Varun Gumber judgment remains a cornerstone in legitimizing fantasy sports in India, and it continues to influence how courts and policymakers approach the regulation of digital gaming and betting platforms. These rulings have provided legal shelter to fantasy sports platforms, allowing them to operate without being classified as illegal gambling.
However, critics argue that the application of the "skill" test is inconsistent and open to exploitation. Why Betting Apps Have Not Been Banned Despite widespread concern, betting apps have not been banned for several reasons: Legal Ambiguity One of the biggest obstacles in regulating online betting apps in India is the country’s outdated and fragmented legal framework. Most of the existing gambling laws were crafted decades ago—long before the digital age—and were designed to regulate physical gambling establishments rather than internet-based platforms. Furthermore, since gambling falls under the jurisdiction of individual states, there is no single, comprehensive law that clearly addresses online betting across the nation.
This legal vacuum creates uncertainty, making it difficult for authorities to uniformly classify and regulate betting apps, which operate in a rapidly evolving technological environment. Skill based classification A critical strategy employed by many betting apps to continue operations is their
classification as “games of skill.” Leveraging landmark court rulings such as K.R. Lakshmanan v. State of Tamil Nadu and Varun Gumber v. Union Territory of Chandigarh, these platforms argue that their games require significant skill, strategic
thinking, and knowledge rather than mere chance. This distinction allows them to sidestep India’s gambling prohibitions, which primarily target games of chance. By exploiting this legal grey area, betting apps maintain their legitimacy even as concerns over gambling addiction and financial exploitation grow. Jurisdictional Challenges Most online betting apps serving Indian users operate servers and maintain corporate offices outside India, often in countries with more lenient or ambiguous gambling laws. This offshore setup complicates enforcement efforts by Indian regulators and law enforcement agencies. When illegal activities are hosted beyond national borders, it becomes difficult to hold operators accountable or shut down platforms swiftly. Crossborder jurisdictional issues and the absence of bilateral agreements further hinder effective legal intervention.
Technological elusiveness Even when authorities attempt to block access to certain betting apps or websites, users often circumvent these bans through technology. Tools like Virtual Private Networks (VPNs) allow users to mask their geographic location and access restricted content. Additionally, operators frequently create “mirror sites” or alternative domains that replicate the original platform, making it challenging for regulators to keep up with blockades. This technological cat-and-mouse game renders enforcement efforts reactive and often ineffective. Regulatory Hesitation Despite increasing public concern and media attention on the negative consequences of online betting, Indian lawmakers and regulators have shown considerable reluctance to impose blanket bans or stringent regulations. This hesitation stems partly from the political and economic implications of such moves.
Betting platforms have amassed large user bases, many of whom are young and vocal, and imposing harsh restrictions could provoke public backlash. Additionally, the industry is supported by powerful lobbyists and is seen as a source of tax revenue and employment in some regions. These factors combine to create a cautious regulatory environment where decisive action is
often delayed or diluted. These factors create an environment where enforcement is either infeasible or inconsistent, allowing betting apps to operate in a legal gray zone. Economic and Political Dimensions The betting app industry in India is financially significant: • Revenue and Employment: The sector generates substantial revenue through advertising, affiliate marketing, and in-app purchases, contributing to indirect employment. • Tax Contributions: Fantasy sports and betting platforms pay Goods and Services Tax (GST), which forms a notable income stream for the government. • Political Connections: Some betting firms have ties to powerful stakeholders, which may influence regulatory inertia. • Election Influence: Given the high internet penetration among youth, political parties avoid antagonizing a potentially large voter base that engages with such apps.
These economic and political factors act as deterrents to any move toward an outright ban. Social Impacts and Ethical Concerns Despite economic benefits, the social costs of betting apps are significant: • Addiction and Financial Ruin: Users, especially youth, often develop gambling addictions, leading to financial losses and mental health issues. • Illegal Betting Rings: Some platforms are fronts for illicit betting syndicates, which can fund criminal activities. • Lack of Consumer Protection: Users have limited recourse if defrauded, as many apps operate outside Indian jurisdiction. • Digital Divide: Unregulated promotion targets vulnerable demographics without
adequate warnings or limits. The ethical concerns call for immediate attention to consumer protection and public health. Comparative International Perspective Several countries offer regulatory models India can consider: To better understand India’s regulatory challenges and explore possible solutions, it is helpful to examine how other major countries manage online betting. These comparative models offer insights into balancing consumer protection, technological innovation, and state oversight. United Kingdom The United Kingdom is widely considered a global leader in the regulation of both physical and online gambling. The industry is overseen by the UK Gambling Commission, an independent regulatory body established under the Gambling Act of 2005.
The Commission is responsible for licensing operators, enforcing compliance with gambling laws, and ensuring that games are fair and transparent. In addition to regulating businesses, the UK places a strong emphasis on responsible gambling through mechanisms such as deposit limits, self-exclusion programs, and mandatory advertising guidelines. Operators must also implement measures to prevent underage gambling and identify problem gambling behaviors. The UK’s model demonstrates that with robust legislation and enforcement, it is possible to maintain a safe and regulated betting environment without resorting to outright prohibition. United States In the United States, the regulation of sports betting underwent a significant transformation after the 2018 Supreme Court ruling in Murphy v. NCAA, which struck down the federal ban on sports betting (PASPA).
This decision allowed individual states to legalize and regulate sports betting within their jurisdictions. As a result, many states—such as New Jersey, Pennsylvania, and Michigan—have since launched legalized sports betting markets with strict regulatory frameworks. These include background checks for operators, consumer protection protocols, data transparency, and taxation mechanisms. However, other states continue to ban or heavily restrict such activities, reflecting a state-by-state approach similar to India’s federal structure. The U. S. example highlights how decentralized governance can work with
coordinated oversight to manage online betting effectively. China China maintains one of the most stringent stances against gambling in the world. Most forms of gambling, including online betting, are strictly prohibited, with the exception of state-run lotteries. The Chinese government enforces this ban through a combination of robust internet surveillance, firewalls, and strict criminal penalties for violators. Websites and mobile apps offering betting services are often blocked at the national level, and citizens caught participating in illegal gambling can face severe fines and imprisonment. This approach, while effective in curbing legal gambling within the country, has been criticized for driving activities underground and creating opportunities for unregulated, black-market operators. It also reflects a zero-tolerance policy, focused more on suppression than regulation.
Australia Australia has taken a balanced and progressive approach to online gambling. While the country allows online betting on sports and horse racing, it imposes strict consumer protection measures through the Interactive Gambling Act 2001 and other related legislation. Operators must be licensed, and there are clear rules regarding advertising, marketing, and user verification. Australia also emphasizes responsible gambling, offering tools such as selfexclusion programs, mandatory risk warnings, and deposit limits to protect users from addiction and financial harm. The government actively monitors operators and penalizes those who fail to comply. This regulatory model demonstrates how online betting can coexist with strong safeguards that prioritize public health and consumer rights. These global examples provide valuable lessons for India.
While each country’s legal and cultural context is different, the overarching theme is clear: comprehensive regulation, rather than outright bans, tends to yield better outcomes in terms of safety, transparency, and enforcement. India lacks a cohesive national policy, making global comparisons crucial for reform. Recommendations and Way Forward To address the regulatory vacuum and social risks of betting apps, India should consider the following:
1. Central Legislation: Enact a comprehensive central law governing online betting,
clarifying definitions and jurisdiction.
2. Independent Regulatory Body: Establish a digital gambling authority to oversee
licensing, monitoring, and dispute resolution.
3. Uniform Legal Framework: Harmonize state laws under a national policy while
allowing local autonomy for regulation.
4. Consumer Protection Measures: Mandate responsible gaming tools, age verification,
financial limits, and public awareness campaigns.
5. International Cooperation: Collaborate with global jurisdictions to regulate offshore
platforms and enhance cyber enforcement.
6. Ethical Advertising Codes: Prohibit misleading ads and target vulnerable populations
responsibly.
7. Research and Impact Assessment: Regularly study the socio-economic impacts of
betting apps to inform policy decisions. Conclusion Betting apps in India sit at a complex crossroads where evolving technology, unclear legal standards, economic incentives, and societal concerns collide. The current legal and regulatory framework, largely designed for a pre-digital era, struggles to effectively govern this fastgrowing sector. Although courts have provided temporary protection to certain platforms by interpreting their activities as games of skill rather than gambling, these judicial decisions have not resolved the fundamental gaps in legislation. As a result, the overall regulatory landscape remains fragmented, inconsistent, and often inadequate to address the unique challenges posed by online betting. To effectively manage this issue, India needs a well-coordinated and thoughtful strategy at the national level.
Such an approach should carefully balance the potential economic benefits— such as job creation, tax revenue, and innovation—with the need to protect vulnerable populations from the risks of addiction, financial loss, and exploitation. It must also consider
ethical responsibilities related to consumer transparency, fair play, and data privacy. Without timely and comprehensive reforms, India risks allowing a digital betting environment to grow unchecked, thriving on legal loopholes and the lack of clear oversight. This could deepen social harms and erode public trust, making it even harder to implement effective controls in the future. In this context, proactive policy measures that clarify legal definitions, strengthen enforcement mechanisms, and promote responsible gaming practices are critical to safeguarding the interests of both the economy and society.
References
1. Public Gambling Act, 1867
2. Information Technology Act, 2000
3. Constitution of India – Seventh Schedule, List II
4. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226
5. Varun Gumber v. Union Territory of Chandigarh, 2017 SCC OnLine P&H 5372
6. Dream11 Fantasy Sports Platforms Case (Multiple High Courts, 2019–2021)
7. Report of the Law Commission of India, No. 276 – Legal Framework: Gambling and
Sports Betting
8. Indian Express, Business Standard, The Hindu – Coverage on online betting
9. UK Gambling Commission Guidelines
10. UNODC Reports on Online Gambling and Cybercrime