The rise of online gaming in India has created exciting opportunities for entrepreneurs and players alike. Among various gaming types, skill-based gaming platforms (such as fantasy sports, rummy, chess, and quiz games) are gaining popularity. However, running such a platform involves strict legal and regulatory compliance to avoid penalties or shutdowns.
Let’s dive into the key compliances and legal frameworks you need to follow for a successful and legal operation in India. 🌐📜
A skill-based game is one where the outcome is determined mainly by the player’s knowledge, training, attention, experience, and expertise, rather than chance or luck. In contrast, games of chance fall under gambling and are largely prohibited in many Indian states.
🧠 Example of Skill-Based Games:
Fantasy sports (like cricket or football leagues)
Rummy
Chess
Quiz-based games
Word-building or strategy games
India does not have a uniform national gaming law. Instead, gaming is governed by:
The Public Gambling Act, 1867 (a central law)
Various state-specific gaming laws
Judicial rulings interpreting skill vs. chance
Skill-based games are excluded from gambling laws under the central act, but states can impose their own restrictions.
⚠️ Important Note: Some states like Telangana, Assam, Odisha, Andhra Pradesh, and Nagaland have restricted or banned online gaming involving money—even if skill-based.
Here are the major legal and regulatory compliances you must follow to operate smoothly:
Register your company under the Companies Act, 2013 or Limited Liability Partnership (LLP) format.
Choose a relevant name and business structure.
Obtain PAN, TAN, GST, and open a current account.
Ensure your platform complies with the Information Technology (IT) Act, 2000:
Strong data protection and privacy policies
Cybersecurity measures
Content moderation and user protection
Skill-based games involving entry fees or prize pools may attract GST.
Usually, 18% GST is applicable on platform fees/commission.
Maintain proper invoicing and return filings.
Comply with the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011.
If the Digital Personal Data Protection Act is enforced in your jurisdiction, adhere to its provisions.
Clearly disclose Terms of Service, Privacy Policy, Refund Policy, and Grievance Redressal Mechanism.
Get your platform certified as a game of skill by:
Independent legal opinion
Industry-recognized bodies (such as AIGF or FIFS)
This helps in building credibility and protects against potential legal action.
Implement Know Your Customer (KYC) norms for users.
Verify identity, age, and location to prevent underage or restricted-area access.
Follow AML guidelines to prevent money laundering through your platform.
Since gaming is a state subject, you must comply with local laws:
Some states require special licenses
Others may prohibit cash games altogether
Be cautious of geo-blocking users from restricted states
Winnings over ₹10,000 are subject to TDS at 30% under Section 194BA of the Income Tax Act.
Issue Form 16A for TDS deductions.
Maintain proper accounting records of payouts.
Provide tools for users to set time and spending limits
Add warnings for excessive gaming
Allow self-exclusion or breaks for mental well-being
✔️ Keep legal counsel or compliance experts on retainer
✔️ Stay updated with evolving court rulings and central/state laws
✔️ Maintain transparency with users and regulators
✔️ Adopt a fair play policy and an internal audit mechanism
Running a skill-based gaming platform is a promising venture—but only when built on a strong legal foundation. While you do not need a gambling license for skill games, you must comply with corporate, tax, IT, and local laws.
With the right structure, compliance, and transparency, your platform can grow responsibly and sustainably. 💼🎉