Corporate & Commercial Law, Gaming & Gambling Law



Online games are games that are played partially or wholly through the internet. It can be played individually or it can also be played along with other players available at that period of time. With technological growth, the online gaming system has become a very important part of human life. It is not only limited to entertainment. Certain games are educational as well which are made with the goal of disbursing education to children. It being more attractive in nature the learning process also grows faster.


The merits of Online Gaming are:-

  1. It is a mode of entertainment. It helps pass time.
  2. Some of the online games help in growing the analytical skills of the person playing.
  3. There are educational games for children which develop skills in them.
  4. Some online games provide live chatting while playing which allows us to communicate with a larger number of people and a great platform for social interaction.
  5. It improves multitasking skills.
  6. Enhances concentration, intuition, problem-solving, leadership, and observation skills.


Gambling is a process of wagering something of value in the events where the outcomes are uncertain in order to win something of value. For example- Casino table games, bingo, card games, Lotteries, Horse Racing betting games, etc.

The purpose of gambling is to risk money or belongings in order to with more money or anything of value when the circumstances involved are uncertain.


Gambling comes under state subject and thus, it varies from state to state depending upon the legislation. Gambling depends upon two factors which are: skill-based and chance-based. Skill-based are games involve using the human mind, observation, and analytical skills, however, chance-based games are games that do not use the efficiency of the human mind, analytical skills, etc. In the case of Skill-based games it does not comes within the purview of gambling, however, in the case of chance-based games which purely is based on chance and not on the human mind or analytical skills comes under gambling law and is not legal.

Section 12 of The Public Gambling Act, 1867 states:

Act not to apply to certain games.—“Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played.”

Gambling as a whole is not legal in India. However, there are some games like Horse racing games, lottery, rummy which are legal. Only in Sikkim, Goa, and Daman casinos are allowed.

In State of Andhra Pradesh v K. Satyanarayana and Ors [AIR 1968 SC 825], the Court held that Rummy is not a game entirely based on chance. Rummy requires skills at a certain level involving memorizing of fall of cards and that building of cards requires skill in holding and discarding cards. Thus it cannot be said that the game of Rummy is a game entirely based on chance.


Online games are quite new in India thus, online gambling is a new portal available in the market. The rules and regulations are still in the stage of infancy. However, Nagaland has moved a step forward and formed provisions enacted under the Nagaland Prohibition of Gambling and Promotion of Online Games of Skill Act, 2015 for imposing rules and regulations on online games. The act focus that the games which are chance-based are considered illegal, however, skill-based games are legal and for that, a license is to be obtained which states that a particular game is skill-based and not chance-based. The license as provided under the Nagaland Prohibition of Gambling and Promotion of Online Games of Skill Act, 2015 is valid and applicable in the whole of India except the states that strictly prohibit gambling and wagering i.e. Assam, Odisha, Telangana and Gujrat.


The license for Online Games can be obtained from under the Nagaland Prohibition of Gambling and Promotion of Online Games of Skill Act, 2015 which is valid all over India except the states that prohibit gambling. Such license is valid only in respect of Skill-based games. An application is to be filed for the same which is to be made to the Directorate, Nagaland State Lotteries along with Government Fees. The License will be valid for the next 5 years.

The Application fee is Rs.50,000/- which is non-refundable.

The annual license is distributed as Rs.10,00,000/- per annum for the first 3 years and Rs.20,00,000/- per annum for the remaining 2 years. However, in the case of 3 or more games, the license fees will be Rs.25,000,000/- per annum for the first 3 years and Rs.50,000,000/- per annum for the remaining 2 years.

The License can be applied by an Indian company only and not a foreign establishment.

The Licensing authority may take around 6 months (from the date of the application) to scrutinize the application filed for obtaining a License of Online gaming. To satisfy himself the Licensing authority can demand any further documents in respect of the application of License applied by the Applicant.

The Licensing Authority can refuse to provide a License too about which the Applicant will be communicated through a speaking order explaining the reasons for the refusal.


  1. The Online Gaming License is applicable only to skill-based games. If it comes to the knowledge of the licensing authority that the license holder is engaged in chance-based games then such entity will be liable for a fine of Rs.20,00,000/- and in case of non-payment of the fine a simple imprisonment for 6 months will be imposed.
  2. If any party is found that a license for online gaming is obtaining by non-disclosure of information or mis-declaration then the Company or the individual shall be liable for imprisonment for a term of 6 months or a fine of up to Rs.20lakhs.
  3. Any person who is found to be guilty of any offense as mentioned above will not be allowed to renew the license and will also be liable for termination of the license.

The online gaming system is a very new subject. With drastic development in technology, new things are introduced to the market every day. Thus, immediate legislation on such issues becomes very difficult.

To protect the infringed party and also to protect the rights of the party who have created an online gaming portal. Nagaland has taken a step ahead by introducing a provision in this regard.  Further, such provisions have been upheld by all the states and the gaming license under such provisions are valid through the whole of India except the states where there is a strict prohibition on gambling and wagering i.e. Assam, Odisha, Telangana, and Gujrat. The provisions had also provided the punishments in respect of the infringement of rules and regulations under which such license is provided. India is moving forward technologically and we can be understand that in the near future there will elaborate and strict statutory guidelines in respect of Online Gaming.

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