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Technological developments, the growth in mobile users and the active participation of international operators have made the gambling market attractive, but also problematic in India. Authorities at the federal and regional levels are increasingly faced with the need not only to regulate the industry, but also to protect players, prevent fraud and ensure the transparency of financial transactions. We have prepared an overview of trends based on data from ruhrsports.com.
Legal and Tax Environment
At the federal level, a number of changes have already been introduced that have had a significant impact on the operation of online platforms and the financial results of users.
One of the steps was an amendment to the tax legislation in 2023. Now, a 28% goods and services tax (GST) is levied not only on the platform's commission but also on the entire deposit amount. This means that when you deposit 100 rupees, 28 rupees go straight to the government, regardless of whether the player wins or loses. This rule applies to all games with cash stakes, whether they are games of chance or skill.
In addition to GST, there is also a 30% income tax, which is withheld when winnings are withdrawn. The amount is deducted as TDS (tax at source), which together makes the players' net profit significantly lower. This is especially noticeable on small and medium winnings.
Federal IT rules also set strict requirements for online gaming operators. Platforms are required to:
• Conduct user identification (KYC), including age verification.
• Appoint a compliance officer and an employee to liaise with law enforcement agencies.
• Publish transparent terms and conditions, complaint procedures and data protection policies.
However, no effective self-regulatory body has yet been appointed in India to monitor the implementation of these rules in practice. The situation is further complicated by the fact that rules vary greatly at the state level. In Tamil Nadu, some popular games are banned, time restrictions have been introduced, and mandatory two-step verification via Aadhaar is required. In Karnataka, a separate regulator is being set up, skill-based games are being licensed and games of chance are being banned, and fines and transaction storage requirements are being introduced. In Maharashtra, there are calls for a central law, with a focus on protecting young people and preventing cyber fraud.
At the same time, federal authorities are actively blocking offshore platforms, investigating suspicions of money laundering and restricting gambling advertising.
How Regulation is Developing
Against the backdrop of such diverse state practices, a common trend can be seen — a move towards stricter and more unified regulation of online gaming. At the federal level, a national law is being discussed that would replace fragmented measures and introduce a uniform system. It is expected to define the differences between games of chance and games of skill, establish mandatory licensing, time and spending limits, and mandatory player identification through KYC or Aadhaar.
Gambling companies are also keen to contribute to the development of rules. For example, operator associations are signing joint codes of conduct that enshrine the principles of fair play, user protection and transparency of terms and conditions.
Regional initiatives remain an important source of ideas for future national regulation. Karnataka is demonstrating a model for licensing skill-based games with strict controls, while Tamil Nadu is actively applying technological solutions such as linking accounts to Aadhaar.
The tax burden is likely to remain at current levels, while control over offshore operators and advertising will only increase. Hidden forms of promotion, the use of celebrities in advertising and marketing loopholes are already prohibited.
What Players and Operators Need to Consider
To adapt to the new conditions, it is useful to think in advance about how to comply with future requirements. Key points to consider:
• Licensing and registration, readiness to work under federal or regional rules and obtain all necessary permits.
• User identification — implementation of age and identity verification procedures through KYC or Aadhaar.
• Taxes, accounting for 28% GST on deposits and 30% TDS on withdrawals of winnings in calculations and business models.
• Regional restrictions and understanding differences in state laws, such as bans on certain types of games.
• Responsible marketing — complying with advertising restrictions, avoiding prohibited forms of promotion, and preparing for possible audits.
Compliance with these principles not only helps avoid fines but also increases user trust, which is especially important in a competitive market.
Prospects for Gambling in India
India is on the verge of major changes in the online gambling industry. In the coming years, we can expect the adoption of a single national law that will introduce clear rules, licensing, player protection and enhanced oversight.
Self-regulatory organisations are likely to be officially approved to verify the quality of games and ensure compliance with ethical standards. The tax system, including GST and TDS, is likely to remain strict and may become even more detailed for different categories of games.
At the same time, experiments will continue at the state level. Some regions will seek to profit from licensing skill-based games, while others will tighten bans and controls. In any case, protecting vulnerable groups, combating illegal operators and increasing transparency will be key priorities.
Gambling in India is gradually moving from chaotic regulation to a structured system where there will be fewer opportunities for abuse but also less room for free activity without compliance. For players, this means a safer environment, and for businesses, the need to strategically build their operations to reflect the new realities.
