Q&A: land-based gambling in India

Land-based gambling

What types of land-based gambling are permitted in your jurisdiction, and is gambling regulated at a national or subnational level?

Land-based gaming is regulated under State Laws. The following games are permitted under the Gaming Laws:

• Skill Gaming (except Andhra Pradesh (AP), Telangana, Assam and Orissa where Skill Gaming is prohibited, ie, Blocked States);
• free-to-play games; and
• horse race betting, subject to conditions.

Casinos: Casinos can be set up in Goa, Daman and Diu (under the Goa, Daman and Diu Public Gambling Act 1976 (GD&D Act)) in five-star hotels, onboard vessels and other government-designated places, and in Sikkim (under the Sikkim Casinos (Control and Tax) Act 2002), at five-star hotels or equivalent hotels by private players. 

Prize Competitions: The Prize Competitions Act 1955 (PCA) permits offering crossword puzzles or other competitions where prizes are offered for solution of any puzzle by private actors. States have adopted the PCA with state-specific amendments. These games are offered under a state licence, provided that the maximum prize does not exceed 1,000 rupees and the entries do not exceed 2,000.

Lotteries: The Lottery Laws define lottery as a scheme for the distribution of prizes by lot or chance to persons who participate for a prize by purchasing ticket(s). State governments can organise, conduct and promote lotteries with certain conditions attached, and can also appoint individuals or corporates as ‘distributors’ or ‘selling agents’ for lotteries on the state’s behalf. Private lotteries, unless explicitly allowed under a state licence, are banned in India. 

Please describe the licensing criteria and procedures to operate land-based gambling of each type or classification. Does your jurisdiction limit the number of available licences?

The licensing criteria and procedures to operate land-based gambling for each product type in different states or union territories are mentioned below.

Goa, Daman and Diu: The GD&D Act provides for a licensing regime for the operation of casinos in five-star hotels, on-board offshore vessels within the territorial waters of Goa, and other government-designated places.

• Applicant: Individual or company (incorporated in India).
• Licence fee: One-time fee of 2 million rupees, with an annual licence fee in the range of 110 million rupees to 440 million rupees for five-star hotels, and 275 million rupees to 440 million rupees for offshore casinos.
• Process: Application in the prescribed form to be made to the Home Department of Goa.
• Licence tenure: five-year licence, with option to renew.

Sikkim: Licences for offering casino games such as roulette, blackjack, bingo or casino brag, in five-star hotels or equivalent.

• Applicant: Individual or a company (incorporated in India).
• Licence fee: One-time fee of 0.1 million rupees. A provisional licence is granted for six months, which may be extended for another six months upon payment of fee. An annual licence fee for land-based casinos is 50 million rupees.
• Process: Application in prescribed form to be made to the Department of Tourism, Sikkim.
• Licence tenure: five-year licence, with an option to renew.

There are state-specific licences for organising land-based horse race betting in India.

Licence conditions, inter alia, require that (1) the bet should be placed on the day the horse has run, and (2) in an enclosure that has been sanctioned by the state government. The race-course’s owner, lessee or occupier must apply to the state government along with prescribed fees. A horse racing licence is issued for one year.

Licensed sports betting is permitted only in Sikkim through the state-wide intranet. The fees and process are the same as for casino games licences in Sikkim.    

There are state-specific lottery laws. Illustratively, under the Maharashtra State Lottery Regulation Act 2000:

• Lotteries retail agent applicant: must be (1) any person above the age of 18, (2) with a minimum educational qualification of Grade 7, and (3) with no criminal background.
• Process: Application along with a signed agreement to be made to the Commissioner of State Lottery, Maharashtra along with a licence fee of 200 rupees.
• The licence tenure is one year.

Must individual directors, officers or owners of licensees also be licensed or reviewed for suitability?

Gaming Laws do not have such requirements. The Companies Act 2013 will apply vis-à-vis duties and obligations of directors, officers and other key managerial personnel of an Indian company.

May a gambling location be part of a resort, restaurant or other multi-purpose location? What limitations apply?

Gaming Laws prohibit gambling in or operating common gaming houses or gaming houses. Further, under the:

• GD&D Act: Licensees can conduct authorised games in five-star hotels, onboard notified offshore vessels within the territorial waters of Goa, and at other government-designated places.
• Sikkim Act: Licensed games can be conducted in five-star hotels or equivalent.

Are there provisions for passive or institutional ownership that allow for exemption or modification of licensing requirements?

No.

What responsible gambling obligations apply to licensees?

Gaming laws and licences thereunder do not prescribe responsible gaming obligations, except imposing some conditions such as, inter alia, restricting advertising to persons below 18 years of age, or surrogate advertising for gaming.

What type of tax and what tax rate applies to each form of lawful land-based gambling activity?

Gaming operators are typically companies and are taxed at 25 per cent (subject to specific conditions being fulfilled) on income earned from business under the Income Tax Act 1961 and relevant notifications thereunder.

If player winnings (in cash or kind) from lotteries, card games, crossword puzzles, exceed 10,000 rupees at the time of encashment or withdrawal, gaming operators have to withhold 30 per cent tax (exclusive of surcharge and cess) on such winnings.

Twenty-eight per cent Goods and Service Tax (ie, an indirect tax) is levied on (1) the entire bet value of activities including lottery, betting and gambling (ie, Chance Gaming) and (2) an admission fee to casinos and such entertainment events.