Entry 34 of the Seventh Schedule, List II, reads "Betting and gambling." For decades, that constitutional placement meant India's states wrote their own rules on dice, cards, racecourses and lotteries. A licence from Sikkim or Goa let operators run physical casinos or paper lotteries within those borders. The 2025 central statute has severed that arrangement for anything that moves through a phone or fibre line. The Promotion and Regulation of Online Gaming Act, 2025, assented to by the President on 22 August 2025, extends to the whole of India. It applies to online money gaming services offered within India or operated from outside India. State entries on betting and gambling remain in the Constitution. They simply no longer stretch to the activity the central Act now occupies.
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What the Constitution gives states
The Seventh Schedule parcels legislative business between Parliament and state assemblies through three lists. List II, the State List, reserves "Betting and gambling" to state legislatures under Entry 34. Entry 62 adds "Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling." The Ministry of External Affairs publishes the Schedule unchanged since the Constitution has assigned gambling to the State List.
This constitutional placement has produced a patchwork. Some states run lotteries. Others ban them. Goa and Sikkim license casinos. Maharashtra, Gujarat and most northern states criminalise most gambling under the Public Gambling Act, 1867, or their own adaptations. Tamil Nadu and Karnataka have recently added digital-specific prohibitions to their state codes. The common thread: before 2025, a state could permit or prohibit betting and gambling within its territory, and its law governed what happened inside its borders. Operators seeking multi-state reach needed separate clearances from each assembly. No state instrument automatically travelled.
The tax power under Entry 62 allowed states to levy entertainment or luxury taxes on permitted gambling. That revenue stream built state budgets in Goa and Sikkim. It did not, however, confer any extraterritorial validity. A Sikkim casino licence authorised gaming in Gangtok. It did not shield the same operator from prosecution in Chennai or Delhi.
What the 2025 Act changed
The Promotion and Regulation of Online Gaming Act, 2025, uses a different constitutional route. Parliament legislated under entries in the Union List and the Concurrent List that allow regulation of interstate trade, telecommunications, and cyber activities. The Act declares it "extends to the whole of India." The Gazette notification specifies it applies to online money gaming services offered within India or operated from outside India.
The statute's purpose, as stated in the Ministry of Electronics and Information Technology copy, includes prohibiting "the offering, operation, facilitation, advertisement, promotion and participation in online money games through computer resources, mobile devices or the internet." The operative prohibition runs: "No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service."
The 2025 Act does not occupy the field of betting and gambling in its entirety. It occupies online money games specifically. The constitutional entry for "betting and gambling" in List II remains untouched. What has happened is narrower and more consequential: Parliament has used its powers over digital infrastructure and interstate commerce to ban a defined category of activity nationwide, regardless of what any state statute says about betting or gambling generally.
What the government says is banned
The Press Information Bureau release of 20 November 2025 removes any ambiguity about scope. The Gaming Act "comprehensively prohibits all forms of online money games," including games of chance, games of skill, and any combination of the two. The same release says advertising, promotion, facilitation, and related financial transactions for online money games are prohibited.
Penalties are specified with precision. Offering online money games or facilitating related financial transactions may bring imprisonment up to three years, a fine up to one crore rupees, or both. Advertising such games carries imprisonment up to two years, a fine up to fifty lakh rupees, or both. For second or subsequent convictions, the minimum imprisonment is three years, extendable to five, with fines from one crore to two crore rupees.
The PIB release on the 2026 rules clarifies the architecture: the Act bans online money games while separately providing for e-sports and online social games. This is not a licensing regime with conditions. It is a prohibition with exceptions carved out for activities that do not involve money gaming.
What this does to state licences
A state licence never supplied a countrywide permission. That was true before 2025 and remains true. What changed is that a state licence for online money gaming now supplies no permission at all, even inside the issuing state.
The 2025 Act's nationwide text cuts through any state-level authorisation. An operator holding a certificate from a state gaming authority, or operating under a state statute that appeared to permit online skill gaming or online betting, now faces the central prohibition. The state instrument does not shield against the central Act. The central Act does not explicitly repeal state gambling statutes. It simply makes them irrelevant for online money games by occupying that space with a ban.
This is where operators and consumers commonly misunderstand the system. A state law permitting "games of skill" or exempting "online gaming" from gambling definitions appeared, to many, to create a safe harbour. The 2025 Act removes that reading. The Press Information Bureau's inclusion of "games of skill" in the ban description confirms that the central government does not recognise a skill-chance distinction that would carve out online poker, online rummy for stakes, or esports betting from the prohibition.
The extraterritorial reach matters for offshore operators. The Act applies to services "operated from outside India." A platform based in Malta or Manila serving Indian users falls within the prohibition. State laws never reached such operators effectively. The central Act supplies a framework for blocking, prosecuting intermediaries, and pursuing financial flows.
What still remains for state law
State authority over betting and gambling has not been erased. It has been circumscribed. The 2025 Act leaves untouched several domains where state statutes continue to operate.
Physical gambling premises remain a state subject. A casino in Goa, a racecourse in Kolkata, a lottery retail network in Kerala: these operate under state law and state licences. The central Act does not regulate their floor operations, their staffing, their physical security, or their local taxation. Entry 62 continues to empower states to tax these activities.
Lotteries present a mixed picture. The Lotteries (Regulation) Act, 1998, already provides central framework for paper lotteries, with state governments as the organising authorities. Online lottery, however, would likely fall within "online money games" as defined in 2025. States running digital lottery platforms face the same prohibition as private operators.
Sports betting in physical premises, where state law permits it, remains state-governed. The central Act's definition of "online money game" turns on the use of "computer resources, mobile devices or the internet." A betting shop taking cash over a counter, without digital intermediation, sits outside the central prohibition. States may maintain or expand such physical betting under their own statutes.
The 2026 rules framework for e-sports and online social games, mentioned in the PIB release, suggests a regulatory space where central and state roles may still negotiate. These are not money games. They fall outside the prohibition. How they are licensed, taxed, or supervised remains to be determined. State entry 34 could still govern aspects of their organisation that do not involve online money gaming.
How to read your own state
For readers in specific states, the practical question is: what still works under my state law, and what triggers the central ban?
First, check whether your state statute addresses "online" or "internet" gambling specifically. Many state amendments from 2020-2024 added digital prohibitions. These now overlap with the central Act but do not conflict with it. The stricter standard applies.
Second, distinguish activities the central Act explicitly excludes. E-sports tournaments without money stakes, social gaming without prize pools, and physical premises gambling where your state permits: these remain governed by state law. The central Act does not authorise them, but it does not prohibit them either.
Third, recognise that the 2025 Act's financial transaction prohibition reaches payment processors, banks, and wallets. Even if a state statute appeared to permit an online gaming activity, the payment channel is now exposed. The central Act prohibits "facilitation" and "related financial transactions." This cuts deeper than most state statutes reached.
Fourth, watch for state implementation of the central Act. The Ministry of Electronics and Information Technology rules from 2026 will require state-level enforcement cooperation. States may pass amendments to align their own gambling definitions with the central ban, or they may rely on central agencies for online money gaming prosecution while retaining physical gambling oversight.
The constitutional architecture has not collapsed. Entry 34 and Entry 62 remain. What has happened is a precise central occupation of a defined digital space, leaving state authority intact for everything else. The 2025 Act's "whole of India" clause ensures that no state assembly can authorise what Parliament has prohibited. For online money games, the list no longer matters.
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