Introduction
The digital revolution in India has really taken off, thanks to the widespread availability of the internet, affordable smartphones, and the growth of digital payment systems. This shift has completely changed the entertainment landscape. One of the most exciting outcomes of this change is the explosive growth of online gaming and fantasy sports, which now captivate millions of people across the nation. What used to be just traditional board games or casual pastimes has transformed into a vibrant, tech-driven industry that offers real-time interaction, strategic gameplay, and even the chance to win money in some cases.
However, this rapid growth hasn’t come without its challenges, especially when it comes to legal issues. A major concern is figuring out the difference between ‘gaming’ and ‘gambling.’ This isn’t just a matter of wording; it has serious implications for the legality of these platforms under Indian law. While gambling is mostly banned under the Public Gambling Act of 1867 and various state laws, games of skill are protected by the Constitution as legitimate commercial activities under Article 19(1)(g)[1], which guarantees the right to pursue any profession or business.
So, the big question is: how do Indian courts decide if a specific activity is a game of skill or a game of chance? This classification has become crucial, especially for online fantasy sports, which often blend skill, chance, and commercial interests. The responsibility of making this distinction has fallen to the judiciary, which has developed detailed interpretive tests and doctrines, with the ‘predominance of skill’ test being central to their approach.
This blog aims to break down these legal intricacies, particularly how Indian courts have interpreted the legality of online games and fantasy sports through landmark rulings, legal frameworks, and constitutional principles. It will also explore the evolving legal landscape and the criteria used to differentiate between gaming and gambling.
Legal Framework and the Skill–Chance Dichotomy in India
In India, the landscape of gambling is largely shaped by the Public Gambling Act of 1867[2], a relic from the colonial era that makes it illegal to run or manage a “common gaming house” and to gamble there. Even though this law predates the Constitution, it remains the backbone of gambling regulations in many Indian states, with several states adopting it under Article 372 of the Constitution[3]. Interestingly, the Act doesn’t clearly define what “gambling” actually means, nor does it provide a detailed list of activities that fall under this category. Its lasting significance comes from its broad prohibition, except for certain exceptions, particularly for games of skill.
One of the few exceptions mentioned in the Act pertains to games of skill, which are not classified as “gambling” under Section 12.[4] However, the Act doesn’t specify what qualifies as a game of skill, leaving it up to the courts to interpret. This ambiguity has led to numerous legal battles over the years, prompting judges to clarify the lines between games of skill and games of chance.
To complicate matters further, the Indian Constitution has a federal structure. According to Entry 34 of the State List (List II) in the Seventh Schedule, “betting and gambling” fall under state jurisdiction. This means each state can create its own laws regarding gambling.[5] Consequently, the regulatory environment is quite fragmented—states like Goa, Sikkim, and Meghalaya allow and regulate certain types of gambling through licenses, while others, such as Tamil Nadu, Telangana, and Andhra Pradesh, have imposed outright bans, including on online gaming in some instances.[6]
This patchwork of laws often leads to confusion for both gaming operators and participants. Whether an activity is deemed a game of skill or a game of chance is crucial in determining its legality. It’s within this complex framework that fantasy sports and other new online games have found themselves under judicial scrutiny.
The Legal Standard: Game of Skill vs. Game of Chance
The main test evolved by Indian courts to differentiate between the two is the “predominance test“—a doctrinal instrument to determine whether the result of a game relies more on skill than chance. If skill is the prevailing element, the activity falls outside the ambit of gambling and therefore, legal restrictions.
The difference is not between binary; instead, it has been identified by courts that the majority of games contain both elements of skill and chance. What becomes pivotal is deciding which one of the two takes precedence.
This was well stated in the case of State of Andhra Pradesh v. K. Satyanarayana (1968),[7] whereby the Supreme Court held that the card game Rummy is not gambling because it entails significant skill. The Court noted that victory in Rummy rests upon memorization, inferences, and strategic discarding and holding of cards, and not simply luck. So even though chance is involved, as in the initial mixing and dealing of cards, that does not turn the whole game into one of chance.
A more subtle definition appeared in Dr. K.R. Lakshmanan v. State of Tamil Nadu (1996).[8] In this case, the Court was confronted with the lawfulness of horse racing and betting on it. The Court held that the anticipation of the result of a horse race requires extensive knowledge of horse pedigree, jockey form, track condition, and past performance. Thus, betting on horse racing was held to be a significant amount of skill, and hence, it was held to be lawful in Indian law.
These rulings establish that a game is not considered gambling simply because it contains an element of chance. Provided skill remains the predominant factor in deciding the outcome, the activity falls under the “game of skill” exception.
Furthermore, the constitutional validity of skill-based games is further supported by Article 19(1)(g)[9] of the Constitution, which provides for freedom to pursue any profession or to engage in any occupation, trade, or business. Therefore, if a gaming platform can establish that its product is a game of skill, it not only falls outside the purview of gambling law but also gains constitutional protection.
Implications for Fantasy Sports
The above legal logic has been decisive in judicial analyses of fantasy sports in India. Courts have regularly held that fantasy sports are not gambling, subject to the caveat that they should be organized so as to require player analysis, statistical knowledge, and decision-making based on reason and sports information.
The “predominance test” has thus emerged as the litmus test for these websites. Judicial review has generally held that fantasy sports, as opposed to wagering on live games, involve consumers researching the performance of players, the condition of the pitches, the team lineup, and past performances—thus satisfying the test of skill-based activity.
But again, it is not true of all fantasy formats. The platform’s design is decisive—if a format heavily depends on chance or immediately gratifies with automated prize pools and little player interaction, courts will be less likely to consider it a game of skill. Legal permissibility is thus not universal but rather depends on the platform’s design and functioning, decided on a case-by-case basis.
Conclusion
The difference between gambling and gaming in India is still a legally and commercially important issue, particularly with evolving online gaming and fantasy sports. Although judicial dicta have provided relief through the ‘predominance of skill’ test, the use of colonial-era laws such as the Public Gambling Act of 1867[10] and the varying methods followed by different states have resulted in a fractured and uncertain regulatory framework.
There needs to be a harmonized central framework differentiating skill-based and chance-based games, while being sensitive to the federal structure. This can be complemented by the creation of a specialized regulatory body to police compliance, maintain transparency on the platforms, and safeguard consumer interest. Judicial oversight, meanwhile, must continue to take a finely calibrated, case-by-case approach, especially for hybrid game types.
Platforms should also ensure accountability by embracing equitable design, deposit limits, and age restrictions to steer the system away from misuse and addiction. Significantly, there should be increased public awareness about the legal and financial consequences of online games to encourage informed participation. A balanced approach that ensures innovation while protecting public interest should be the target of India. A strong, transparent, and competency-based regulatory framework—based on legal certainty and ethical principles—has the potential to turn this industry into a responsible player in the digital economy, instead of a legal gray area. The objective is not prohibition, but smart regulation.
References
- India Const. art. 19(1)(g).
- Public Gambling Act, 1867 (India).
- India Const. art. 372.
- Public Gambling Act, 1867, § 12 (India).
- India Const.art.246, sch. VII, list II, entry 34.
- Maheshwari & Co., Gaming and Gambling Laws for Online Platforms, MAHESHWARI & CO., https://www.maheshwariandco.com/blog/gaming-and-gambling-laws/ (last visited Apr. 10, 2025).
- State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.
- Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.
- India Const. art. 19(1)(g).
- Public Gambling Act, 1867 (India).
[1] India Const. art. 19(1)(g).
[2] Public Gambling Act, 1867 (India).
[3] India Const. art. 372.
[4] Public Gambling Act, 1867, § 12 (India).
[5] India Const.art.246, sch. VII, list II, entry 34.
[6] Maheshwari & Co., Gaming and Gambling Laws for Online Platforms, MAHESHWARI & CO., https://www.maheshwariandco.com/blog/gaming-and-gambling-laws/ (last visited Apr. 10, 2025).
[7] State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.
[8] Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.
[9] India Const. art. 19(1)(g).
[10] Public Gambling Act, 1867 (India).
Author: Akshat Chauhan is a 2nd Year B.A.LL.B (Hons.) student at National Law University and Judicial Academy, Assam
