India - Federal Framework and States

(Section: "Markets and Jurisdictions")

1) Market picture: federation vs states

Constitutional logic: Gambling is predominantly a matter of state regulation. The historical "base" is the colonial framework (Public Gambling Act XIX of 1867), but many states have adopted their own laws/exceptions.
Online sphere: at the federation level, the Rules for the IT Law (IT Rules, 2021, with additions to online gaming 2023) apply, which introduce a regime for online games (including real-money) through the mechanisms of self-regulatory organizations (SRO), due diligence, complaints/deletions, "garma editions" and requirements for advertising/warnings.
Key idea: the state can allow/prohibit a specific type of game (especially offline and real-money online); the federation sets cross-cutting IT requirements, payment and advertising discipline, as well as a tax contour.

2) Central bodies and regulations

MeitY (IT/online) is a nodal body for online gaming in the IT part: compliance with IT Rules (including for real-money games), appointment of a grievance officer, procedure for responding to complaints and illegal content, transparency and risk responsibilities.
MIB/ASCI (advertising) - media supervision and self-regulation: requirements for disclaimers ("play is associated with financial risk and can be addictive"), prohibition of misleading offers, restrictions on targeting minors.

RBI/payment loop - rules for PS (UPI, PPI/wallets, cards): KYC, prohibition of anonymous routes, control of merchant categories and returns, monitoring of "pseudo-merchants."

FIU-IND/AML - reporting on suspicious transactions (STR), SoF/SoW triggers, log storage.

• GST: since 2023, 28% GST has been introduced for online games for money, casinos and horse racing - based on the "input" parameter (face value/plug design) or in another prescribed format; practical implementation is reflected in the contractual and reporting policy of the operator.
• TDS: there is a withholding tax on the source from net wins in online games (daily/on withdrawal/at the end of the period) and a tax rate on winnings in the player's annual return; the operator must embed the "net wins" logic and store calculations.

3) Conceptual lines: "skill game" vs "chance game"

The Supreme/High Courts recognized rummy and horse racing as a "skill game/event." Poker and many fantasy formats are controversial: in some states they are allowed as skill, in others they are persecuted when playing for money.

States are expanding/narrowing tolerance boundaries, so the same application may be legal in state "A" and illegal in state "B."

4) Map of states (summary of key examples)

Goa; Daman and Diu - casino offline allowed (under model concessions/zones; in Goa - offshore/onshore), horse racing bets; online casinos are not allowed for a nationwide audience.
Sikkim - historically online within the state + licenses for gambling products (including casinos) with geo-restrictions; the real commercial model is within the state.
Nagaland - licenses for "skill games" online (B2C/B2B), the list included rummy, fantasy sports, etc.; the validity of the license and its "extra-territorial" validity are limited by the practice of the recipient states.
Telangana; Andhra Pradesh - broad bans on online games for money (including "skill games" when betting) - high risk of enforcement.
Tamil Nadu - there is a ban on a number of online games for money (including rummy/poker), created by the Online Gaming Authority; there are disputes/appeals - the regime is tough.
Karnataka - general ban on online games for money was lifted by the High Court; subsequent initiatives are targeted - the status is relatively flexible, but the risk of fluctuations remains.
Kerala - an attempt to ban rummy for money was overturned by the court; local practice allows a skill approach, but without aggressive expansion.

Maharashtra (incl. Mumbai) - a tough "hereditary" forbidden circuit for gambling; online casinos are not allowed, the position is conservative for "skill games."

Delhi and a number of northern states - rely on Public Gambling Act 1867/own variations; offline casinos are prohibited, online for money - at risk, "skill" formats without bets or in special models are allowed.
West Bengal, Punjab, Haryana, Rajasthan, Uttar Pradesh, etc. - mosaic mode: often banning casinos/slots, "skill" games are tolerated outside betting; prohibitions/permissions for fantasy and poker differ.
State lotteries - permissible under a separate federal lottery law; not all states carry them out/permit the sale.

5) Advertising and promotion

TV/OTT/social networks: strict disclaimers, ban on "guaranteed winnings," aggressive "no risk," targeting minors; accounting for hourly "watersheds."

Affiliates: responsibility for promoting products prohibited in the state; compliance log (screenshots/URL/dates/geo/target), pre-moderation of creatives, instant feedback are required.

Cross-border: Offshore licence does not justify targeting state with ban

6) Payments and liability

Payment tools: only KYC-compatible routes (UPI, PPI with full KYC, cards), prohibition of "anonymous" wallets and atypical merchant categories; chargeback pattern tracking.
Liability: domain/app blocking orders, administrative and criminal cases against organizers/partners in prohibition states; players may have administrative consequences according to local regulations.

7) Taxes and accounting (high level)

GST 28% - for online games for money/casino/horse racing, with features of the base; it is critical to correctly set the invoice/merchant logic, geo/state report and channels.

TDS by net winnings - retention by the operator (day/final contour) + issuing a status to the player; operator - accounting "wallet/game/period/bonuses."

Corporate tax - according to the general regime; GST loans/offset - according to standard rules; separate accounting of verticals, bonuses, void/cashout.

8) AML/KYC и Responsible Gaming

KYC/KYB: age 18 +, verification of identity/address, ultimate beneficiaries (for partners), sanctions/PEP; SoF/SoW by trigger.

Monitoring: scoring for pursuing losses, night activity, fast re-deposits, connectivity of devices/cards/UPI identifiers; Maintaining STR in FIU-IND

RG tools: deposit/loss/time limits, timeouts, "cooling," self-exclusion, juvenile filter; banning marketing to the self-excluded.
Data and privacy: storage of logs by time, secure processing of personal data in the logic of the Indian DPDP act (privacy by design, minimization, incident reporting).

9) Technical requirements and supervision access

RNG/Settlement Module Certification, Platform and Report Cases.
WORM logs of the full chain "rate/contribution → calculation → payment → adjustment," time synchronization (NTP).
API/uploads for complaints/supervision, grievance system with SLA; emergency off-switch disputed features by state.
Reliability/information security: DR/BCP (target RPO/RTO), encryption at rest/in transit, RBAC/SoD, regular penetration tests/scans.

10) Entry roadmap

B2C (real-money online gaming/betting/casino)

1. Jurisdictional state matrix (red/amber/green) by product.
2. Tax design: GST 28% + TDS engine (net wins), state/channel reporting.
3. Compliance contour: IT Rules (online gaming), grievance, complaints/deletions, ASCI disclaimers.
4. Payments: KYC routes only; anti- "pseudo-merchants"; limits, frequency caps.
5. RG/AML: limits/timeouts/self-exclusion; STR process.
6. Marketing: whitelist creatives and channels, compliance magazine, geo-filters by state.
7. UAT/Go-Live: NGR/GGR/bonus test cases, TDS/GST, limit overruns, state block scenarios; freeze and runbook incidents.

B2B (content/platform/anti-fraud/payments)

1. Compatibility: certifications, reporting formats, safe-SDK.
2. Contracts: SLA, data protection (DPDP), escrow mechanisms, versioning.

3. Technical circuit: WORM logs, NTP, DR/BCP; Customer TDS/GST tools

4. Marketing: no promo in ban states; pre-moderation и off-switch.

11) Compliance checklists

Licensing/Legal Perimeter

• State Matrix by Product (updated monthly)
• Responsible officers appointed: IT/Grievance, AML, RG, Ads
• Procedures for state prescriptions (fast off-switch)

Taxes

• Built-in GST 28% (correct base, invoices, bonus accounting)
• TDS by net wins: settlement, retention, reports to players/authorities
• Separate accounting by vertical/state/channel

AML/KYC & RG

• KYC/KYB Policies, Sanctions/PEP, SoF/SoW; STR procedures
• Limits/timeouts/self-exclusion; banning marketing to self-excluded
• DPDP Log and DPIA Storage

Payments and information security

• KYC routes only (UPI/PPI/cards); anti-" pseudo-merchants "
• WORM logs, NTP, encryption, RBAC/SoD; pentests/scans
• DR/BCP tests; SLA of responses to complaints/requests

Ads/Affiliates

• ASCI disclaimers; "no risk/guaranteed win" ban
• Compliance log (screenshots/URL/dates/geo/target)
• Geo-filters by state; Quick Recall

12) First year KPIs

Fiscal: timeliness of declarations ≥99%; discrepancy otchetnost↔billing <0.5%

AML/KYC: average verification time; the proportion of STRs from "red" triggers; false positives

RG: proportion of players with active limits; Self-exclusion TTR <1 min

Information security: MTTR incidents; closing critical vulnerabilities on time

Marketing: 0 ASCI/MIB violations; 100% geo-filter compliance by state

13) FAQ

Is it possible to work with one "all-India" license throughout the country?
No, it isn't. Gambling is a state subject. We need a matrix of tolerances and restrictions for each state and product.

Is online skill play always legal?
No, it isn't. A number of states prohibit real-money even for "skill" at the rate; in others they are allowed. Check local law and judicial acts.

How to count taxes online operator?
Lay down a GST of 28% on the installed base and TDS on net winnings, with separate accounting by states/verticals/channels and correct bonus logic/void/cashout.

What is critical about IT and marketing?
Grievance procedures, WORM logs, fast off-switch by state, ASCI disclaimers, prohibition of "aggressive" inductions and juvenile targeting, full compliance log.

Note

Indian practice is evolving rapidly (state courts, IT Rules clarifications, tax methodology). For legally significant decisions, always check the current texts of laws/clarifications and court orders in the target states and update the tolerance matrix on an ongoing basis.