All questions

The licensing process

i Application and renewalLottery

Lotteries are operated and promoted by state governments. States invite private enterprises to partner with them to promote and market the state's lottery through a tendering process. The request for proposal document is generally released on a payment basis by each state for such tendering. Some of the tender conditions are:

  1. operations must continue in India for five years;
  2. the applicant must have been a profitable vendor for three years;
  3. the applicant must a minimum experience of one year in the past three years;
  4. the applicant must have a state government certificate supporting the experience of the vendor;
  5. there must be a deposit of earnest money; and
  6. there must be an advance payment of sale proceeds.
Horse racing

No new licences for horse racing have been issued in the past two decades. Thus, the opportunity to procure a horse-racing licence is limited. Punjab has enacted the Punjab Horse Race (Regulation and Management) Act 2013. The tender on a design, build, operate and transfer basis for a proposed race course was floated, but no bids were received for it.

Sports betting

Licences for sports betting are issued in Sikkim. An application for a licence needs to be made to the government of Sikkim. The designated authority, as per the notification of the Sikkim government dated 11 June 2009, is the Secretary to the government of Sikkim (Finance, Revenue and Expenditure Department). The application needs to be made using Form 1 accompanied by a bank draft of 500 rupees in favour of the director, Sikkim state Lotteries. After examining the application and making due enquiries (no time period is provided), the government can grant a provisional licence on the payment of fee of 100,000 rupees in Form 2. The provisional licence is granted to enable the licensee to set up the infrastructure and comply with other licensing requirements. Subject to compliance with the licensing terms, a regular licence in Form 2A is issued for a period of five years on the payment of a fee of 10 million rupees.

Licences for teer bookmakers can be issued under Section 14(3)A of the Meghalaya Amusement and Betting Tax Act. Further, under Section 14A(1)m of the Meghalaya Amusement and Betting Tax Act, terms and conditions for a licence are to be prescribed. Details pertaining to the licensing conditions and the process to be followed for licensing, are not readily available.

Prize competitions

Under the prize competition rules of states, the application for running a prize competition needs to be made in Form A and should be submitted personally or sent by registered post to the licensing authority. The licence is effective throughout the state. The fee for granting a licence is 25 rupees where an entry fee is charged, and 10 rupees where no such fee is charged. The fee for renewal is half of the initial fee.

Games of skill

No licence is required to operate a game of skill outside the state of Nagaland. Licences have been issued under Section 7 of the Nagaland Act. Licences for a period of five years can be issued to individuals, firms or companies provided:

  1. they are not engaged in gambling;
  2. they do not have a criminal history;
  3. the controlling stake and exercise of executive decisions is within India; and
  4. the technology and support platforms are within India.

Under the Nagaland Act, rules have been formulated to govern the licensing process. Under Rule 4(3) an application needs to be made accompanied by documents supporting the credentials of the promoters, audited financials, note on software technology platform, business plan and financial projections. A non-refundable application fee of 50,000 rupees through a demand draft also needs to be deposited. The details are then forwarded to the empanelled firm, which then makes an enquiry and issues a certification or recommendations for compliance. If a certification is issued by the empanelled firm, the licensing authority is bound to issue a licence within 14 days. In the event that recommendations are received from the empanelled firm, the recommendations shall be referred to an ad hoc committee or expert committee formed under the Nagaland Act for its recommendations, which are not binding on the licensing authority.

Under the Nagaland Act licences can be issued for a game or bouquet of games (three or more games). An annual licence fee of 1 million rupees per game per annum or 2.5 million rupees for a bouquet of games per annum for the first three years is payable. For the subsequent two years, 2 million rupees per game per annum or 5 million rupees for a bouquet of games per annum is payable. In addition, the licensee is required to pay an amount of 0.5 per cent of the gross revenue generated as royalty to the state government.

Games of chance

Under Section 13A of the Goa, Daman and Diu Public Gambling Act 1976, the government may authorise any electronic amusement games or slot machines in five-star hotels (and such table games and gaming on offshore vessels as may be notified) subject to certain conditions, including payment of recurring and non-recurring fees. The validity of licences granted by the government of Goa is generally five years. The annual licence fees for onshore Goan casinos are as follows:

  1. up to 100m2 – 100 million rupees (hiked by 60 million rupees);
  2. 100m2 to 300m2 – 200 million rupees(hiked by 150 million rupees);
  3. 300m2 to 500m2 – 250 million rupees (hiked by 195 million rupees);
  4. 500m2 to 750m2 – 320 million rupees;
  5. 750m2 to 1000m2 – 360 million rupees; and
  6. over 1000m2 – 400 million rupees.

For offshore casinos (passenger capacity-based), the fees are:

  1. up to 100 passengers – 80 million rupees;
  2. 100 to 200 passengers – 250 million rupees (hiked by 150 million rupees;
  3. 200 to 400 passengers – 300 million rupees (hiked by 190 million rupees); and
  4. over 400 passengers –400 million rupees (hiked by 288 million rupees).

The renewal fee for both onshore and offshore casinos has been increased from 3 million rupees to 10 million rupees.

Under the Sikkim Casino Games (Control and Tax) Rules 2007, an application for a licence needs to be made through Form A. Provisional licences under these Rules are granted for a period of five years and can be renewed. A licence fee of 50 million rupees is payable for a casino licence.


i Lotteries

Lotteries used to be subject to a lottery tax or charge. The states of Kerala, Punjab, West Bengal and Maharashtra imposed lottery taxes. Maharashtra imposed a tax of 50,000 rupees per draw for online lottery companies. Provisions under the Maharashtra Tax on Lotteries Act 2006 were applied while assessing lottery tax. However, with the promulgation of the Central Goods and Services Tax 2017 (GST), a dual rate of tax on lotteries was introduced on 18 June 2017. While the state-run lotteries would attract a GST of 12 per cent on the face value of the ticket, lotteries authorised by a state government would attract a tax of 28 per cent on the face value of the ticket. In addition, as per Section 115BB of the Income Tax Act, winnings on lotteries in the hands of an individual are taxed at 30 per cent.

ii Horse racing

Previously, different states had different rates of taxes on horse racing. In Delhi and Andhra Pradesh, an entertainment tax of 15 per cent was levied on all money paid to the totalisator and the bookmakers.

In Maharashtra, the rate of taxation is 10 per cent on the investment in the case of the totalisator and 20 per cent on the investment in the case of the bookmaker.

In July 2017, the government introduced the GST, which subsumed the services tax, the entertainment tax and all other state indirect taxes. The GST council placed gambling and totalisator services provided by a racecourse as well as betting with licensed bookmakers in racecourses in the 28 per cent tax band. Further, the GST Council on 18 January 2018 provided clarification pertaining to GST on horse racing, which stated that GST would now be leviable on the entire bet value (i.e., total of face value of any or all bets paid into the totalisator or placed with licensed book makers, as the case may be).

In addition, all winnings of a player or individual are taxed under Section 194BB of the Income Tax Act at 30 per cent.

iii Prize competitions

Under Section 194B of the Income Tax Act, all winnings from prize competitions, such as crossword puzzles, are taxed at 30 per cent.

iv Games of skill and games of chance

Under entry 34 of the Central Goods and Service Tax notification dated 28 June 2017, all services rendered pertaining to an entry into a casino would be chargeable with a GST of 28 per cent on the gross amount collected as admission charge or entry fee. In a subsequent circular dated 4 January 2018, it was clarified that the tax of 28 per cent would apply on entry to casinos as well as on betting and gambling services being provided by casinos on the transaction value of betting (i.e., the total bet value), in addition to GST levy on any other services being Circular No. 27/01/2018-GST provided by the casinos (such as services by way of supply of food and drinks, etc., at the casinos).

Under Section 194B of the Income Tax Act, all winnings from card games and other games of any sort, betting and gambling are taxed at 30 per cent.