Indians have always liked games of chance, but the rise of online casinos has made it even more popular. Millions of Indians log in every day to play, win, and sometimes lose big at slots, poker rooms, and live dealer tables. But here’s the problem: the law hasn’t caught up yet.
More than a hundred years ago, before the internet, smartphones, or digital wallets were invented, the laws that govern gambling in India were written. Because of this, the country’s online casinos are in a strange middle ground: they’re not really legal, but they’re not clearly illegal either. This legal gray area has created a lot of loopholes that offshore operators and players keep using.
The Old Legal Basis for Gambling in India
You need to look at the Public Gambling Act of 1867 to understand the confusion today. The goal of this law from the colonial era was to keep people from running or going to “public gambling houses.” It made sense back then, but more than 150 years later, the same law is still used to decide what happens online. Of course, it doesn’t say anything about the internet.
The law says that “games of chance” are illegal, but “games of skill” are okay. This has led to endless arguments in court about where the line between the two is. It is clear that casino games like roulette and slots are based on luck, but rummy and horse racing are based on skill.
The Offshore Casino Gap
Foreign casino websites from places like Malta, Gibraltar, and Curacao have found a way in because Indian law doesn’t say anything about online gambling. They accept players from India, let people pay in rupees, and even support popular local payment methods like UPI and Paytm.
Technically, these platforms operate outside Indian jurisdiction. Indian authorities can’t easily get to them because their servers and business registrations are in other countries. Players also don’t get in trouble very often because there isn’t a specific rule against playing on these sites.
Every year, billions of rupees flow to offshore accounts, untaxed and unmonitored. The government misses out on money, and players don’t have any real legal protection if something goes wrong.
The Line Between Skill and Luck Is Not Clear
If there’s one thing that keeps India’s gambling debate alive, it’s the endless argument over what counts as a game of skill versus a game of chance.
Games like poker, rummy, and fantasy sports have all fought for legitimacy by claiming they require skill. Courts have sometimes agreed, sometimes not. But when it comes to traditional casino games, slots, roulette, and baccarat, it’s hard to argue that skill plays much of a role. Still, some operators attempt to stretch definitions by adding elements of “strategy” or “probability,” hoping to fit under the “skill” umbrella.
The confusion deepens when you look at the states. Nagaland has an Online Games of Skill Act that lists exactly which games qualify as skill-based, allowing operators to apply for licenses. Other states avoid the topic completely, neither banning nor approving online casinos. That leaves a wide open space where offshore operators step in to fill the void.
The Digital Payment Gap
Another big problem is how money comes in and out of online casinos. Banks and payment gateways can’t process gambling transactions. But this rule is surprisingly easy to break. Offshore websites hide transactions by coding payments under neutral categories, using third-party wallets, or accepting cryptocurrency.
For instance, when a player puts money into an online casino, their bank statement might show it as a generic “international service” or “entertainment” purchase. Many platforms now let you pay with crypto or prepaid vouchers, which means that traditional banks don’t have to keep an eye on them.
The outcome? Players can gamble however they want, but there are no protections for consumers. If an offshore casino won’t pay out winnings, there isn’t much you can do. The government, on the other hand, misses out on taxes that could have been collected, and the lack of regulation makes it easier for fraud, scams, and even money laundering to happen.
Even though there are these risks, enforcement has not been consistent. The Information Technology Act has blocked some casino sites, but they often come back under new domains. It’s like a never-ending game of digital whack-a-mole.
Could regulation be the answer?
You can’t ignore India’s online gambling market. Reports from the industry say that millions of people are already spending real money on casino games every month. Players just go to offshore sites that India can’t reach, so banning them outright hasn’t worked.
That’s why a lot of experts think that instead of banning something, it would be better to regulate it. India could make a lot of money from taxes by making a clear, legally recognized framework for online casinos that protects players.
The UK and Malta are two countries that have shown how this can work. Licensed operators have to follow strict rules about checking players’ ages, making sure they play responsibly, and making sure everyone plays fairly. The government makes money from licensing and taxes, and players are safe.
If India were to do something similar, it would be fair for domestic operators to compete, it would be possible to limit offshore sites, and the digital payment loopholes could be closed. It would also help the government keep an eye on where the money goes, which would lower the chances of fraud and illegal betting.
It won’t be easy to regulate. Gambling still has a bad reputation in society, and many politicians are afraid of the moral backlash that would come from making it legal. But as the market grows and technology changes, ignoring it becomes more of a problem than a solution.
