The aim of this paper is a critical analysis of the complex and dynamic regulatory environment on sports betting and online gaming in India, an industry that has been rapidly growing due to the technological shift and the growing internet penetration level. However, this quick change creates a plethora of legal issues, especially with regard to data privacy, consumer protection, and integrity of sports themselves despite popular concern over match-fixing. Another Act to be discussed in the paper is the Digital Personal Data Protection Act of 2023, which evaluates how the act will impact online gaming operators and how it will protect the data of users in the rapidly expanding industry. In particular, the Digital Personal Data Protection Act of 2023 has extensive consequence of the antitrust enforcement in digital markets in India, as data-driven business models and competition have a complex connection. This Act, together with the proposed Digital Competition Bill, 2024, represents an indication of a shift in the strategic orientation of the country to ex-ante regulation in response to competition issues associated with data use and domination of the market by Systemically Significant Digital Enterprises in the digital economy.
The trends of online gaming and sports gambling in India require a detailed analysis of the legal and regulatory policies that are undergoing changes in the nation (Mundhra and Sankhala, 2024). This review article addresses the challenges and subtleties of this changing environment, especially with the accelerated technology and growing digitalization in the subcontinent (Makam, 2023). This has contributed to the inability to regulate, tax, and provide a clear operating environment to both domestic and offshore online gambling operators since there is no particular legislation regarding the issue (Srikanth, Mattamana, 2011). This is a liberal nature with severe challenges of legality and protection of consumers, contributing to the ambience that encourages exploitation and leakage of education (Singh & Balhara, 2023). This is further complicated by the increasing popularity of fantasy gaming, since, although this game is recognized as a game of skill, it is facing a patch test legal framework and taxation and consumer protection questions (Singh and Talwar, 2025). This has been added to by the dynamic digital landscape, particularly following the COVID-19, which meant that fans are increasingly interested in the online platforms and demand a re-examination of the regulatory practices, to incorporate these new forms of interaction, such as co-watching and online discussions (Mahajan et al., 2023). Moreover, the fact that sports betting is proposed as an option of alternative interaction is another significant sign of the need to identify a unified national regulation system that would allow taking these technological and behavioral shifts. The suggested paper shall break the current regulatory environment governing online gambling and sports betting in India, identify key factors in the current situation, and propose potential solutions related to guiding the current environment towards a more rational and efficient legal approach that shall support the evolution of the sector and safeguard the social environment (Singh and Talwar, 2025).
The legal framework of gambling in India is largely influenced by the Public Gaming Act of 1867, which is an obsolete legislation that mainly pre-dates and, therefore, does not reflect the nature of the modern online gaming and sports betting (Patil, 2024). This outdated law, targeted at physical stores, cannot easily accommodate the omnipresent, transnational quality of the internet, thus posing a major issue of jurisdiction and enforcement (Ko et al., 2024). As a result, the traditional law with respect to digital activities tends to create both legal uncertainties and judicial discrepancies when applied to the same in various states (Devaney, 2009). This discord is further deteriorated by the enactments at the individual state levels, which have wildly diverged in the level of permissiveness towards various types of gambling and thus an uneven regulatory structure with certain states legalizing lotteries and others entirely prohibit the majority of forms of gambling (Puri, 2014). This legislative maze poses some serious confusion to both the operators and the consumers, making it difficult to develop a manageable national approach to regulating online gambling and betting. Lack of uniform federal rule that would directly address online gaming creates the need of such demanding and rather delicate knowledge of these uneven state-based rules, and therefore, adherence makes the involvement of stakeholders a complex and rather difficult task (Das, 2021).
It is due to this distinction that the legality of a variety of gaming activities in India generally widely depends on whether the game is based on skill or involves a lot of chance, where games largely dependent on the skill, tend to be tolerated, whereas those largely based on chance, are usually heavily prohibited (Das, 2021). Nevertheless, the booming growth of the online gaming industry, which is set to expand to a USD 5 billion market with 568 million users by 2025, is increasingly blurring this longstanding dichotomous framework, as it calls on regulators to reevaluate and contemplate the fact that modern digital interplays are games of skill or chance (Gupta & Sharma, 2024). This grey area is causing a reconsideration of existing interpretation of the law to actually define and control the nature of the online gaming that exist today with most of it involving aspects of both skill and chance. Their ever shifting environment and increasing popularity also pose a formidable picture to the application of the archaic legal classification, meaning they have to find a way to amend their laws so that they reflect the new realities of the online gaming environment. To a greater extent, because there is no legally adopted definition of what can be defined as gambling in the country, these regulatory problems are exacerbated by a set of state regulations that occasionally conflict with one another or are personally interpreted (Singh & Balhara, 2023). Such a chaotic regulatory structure poses an unpredictable environment to both players and users, and it does not allow the industry to excel in growth and innovation, not to mention that the enforcement procedure is harder (George et al., 2017).
Although the Information Technology Act of 2000 forms the basis of the digital transactions and cybersecurity in India, it does not explicitly touch upon online gaming or betting, which also predisposes a regulatory gap within the fast-growing industry. The implication of this legislative gap is that online betting is still implicitly prohibited due to wider reading of the meaning of information that can corrode people, a principle that is still applicable to the content of online gambling (Puri, 2014). This legal regulation compels the digital gaming industry to exist within an ambiguous legal environment in which the legal status of any given activity typically depends on the subjective nature of casino games as being skill-based or chance-based, which the hybrid character of the contemporary online platform environment often questions (Kaur et al., 2023). Therefore, the use of the dominant factor test is commonly used to determine whether skill or chance is the dominant factor in the result of complex online games such as Daily Fantasy Sports, the behavior of which is characteristic of both (Aishvarya et al., 2024). This legal interpretation tries to fill the blank in the old-fashioned gambling laws, but nevertheless, it has still difficulty trying to bring clear cut answers in the midst of a changing technology world where the online games often add features that confuse such classifications (Methenitis, 2005).
The Indian courts have been influential in defining the regulative environment through diverse remarks overseeing the case of games of skill versus games of accident, in scenarios where a direct legislative answer is frequently lacking. Such judicial decisions have even provided some much-needed predictability such as declaring certain fantasy sports-related sites legal due to the alleged reliance on skill, although have also served to point out the vagueness of a reactive legal system to act proactively in tightening the reins on the evolution of online gambling technology. A further such relationship of judicial interpretation to define the borders of legality is a structurally unsound regulatory mechanism, and to foresee what the law will say, as well as to know what is right and a duty in the computer game system.
The unpredictability of the online betting and gaming industry necessitates a comprehensive and adaptable legal framework that addresses not only deficits of on the colonial era laws, but also new needs of digital resources (Puri, 2014). This requires the renegotiation of the existing laws and development of new progressive regulations that can afford not only to condone technological innovativeness but also safeguard the good of the people. The introduction of reforms based on international best practices in the regulation of online gambling is vital, and it is essential to create a balance between the opportunities of the various economic growth and the safeguarding of the potential of several layers of consumer protection as a result of the introduction of responsible gaming and problem gambling (Kaur et al., 2023). Moreover, any regulatory system developed is confronted at the same time with constitutional questions concerning the separation of legislative powers between the central government and individual states, in particular in the case of interstate trade and commerce (Dubey, 2019)(Parhi and Biradar, 2023). Such a thin thread also complicates the issue of developing a national policy since states remain quite free in handling local gambling (Dhavan, 1987). These constitutional arguments of fitness in congress point to the necessity of having collaborative governmental frameworks that incorporate centralized authority with local implementation in order to form a coherent and imposable regulatory framework. The same issue concerns the legal framework of artificial intelligence in India, where no particular legislation is established, which entails drawing on the existing policy, such as the Information Technology Act of 2000, and requires a multi-tier approach to incorporate ethical considerations and hold participants responsible (Sharma et al., 2025). This is especially important since the introduction of AI into different industries has been increasing promptly, and without particular regulation, it may introduce major flaws and loopholes of control (Meghwal, 2025). This regulatory gap in AI is commensurate with the intricacies of internet-based gaming, and demonstrates why sweeping legal changes that directly anchor to new digital technologies and their implications on communities are needed (A.V. & -, 2024). The multi-facetedities of the AI technology especially on issues of algorithmic bias and automated decision making pose new issues where the Information Technology Act of 2000 was not initially formulated to fully address such issues, hence making them the reason why the scope of the Act needs to be re-examined again (A.V. & -, 2024).
The fact that there is no single regulatory authority or unified, broad legal framework to oversee online gaming and betting in India has the effect of causing a rather various and disjointed environment of licensing and permitting conditions state-by-state; as a result, creating considerable compliance issues. This decentralized mechanism does not only lead to administrative overheads, but also establishes legal ambiguities in terms of extraterritorial application of state-level laws and validity of licenses across different jurisdictions, particularly when compared to absence of concrete structures of integrating AI in the current cybersecurity legislation (Meghwal, 2025). The continuous advancement of artificial intelligence in many industries requires a parallel formation of the effective legal and ethical framework, which is not presently provided in the Indian environment (A.V. & -, 2024). The given regulatory gap is further emphasized by the reality that the available Indian legal instruments, including the Telecommunications Act, 2023, the CERT-In Rules, and the Digital Personal Data Protection Act, 2023 do not refer to the nature of operational incidents and ethical implications inherent in AI, which creates the critical gap in the regulatory framework (Agarwal and Nene, 2025).
Considering the amount of money and transactions involved in online gaming, system operators need to adopt strict measures of Anti-Money Laundering and Know Your Customer to avert unlawful money laundering as well as promote integrity in transactions. They include checking the identity of players, tracking the transaction pattern of suspicious activities, and disclosing the red flags to the relevant financial intelligence agencies to alleviate the risks posed by financial crimes. These measures are also vital in ensuring the integrity of the financial system and to ensure the abuse of gaming platforms to serve sinister interests especially considering that AI-based automation can be abused to aid such conduct unless it is appropriately regulated (Bharati, 2024).
This involves tackling the intrigues of the Digital Personal Data Protection Act, 2023, which establishes severe criteria on data fiduciaries and data processors regarding the treatment of personal data, including the necessity of explicit consent and powerful redress for grievances (Bharati, 2024). Moreover, the introduction of AI to these platforms presents new data privacy issues, including the possibility of algorithmic bias when profiling users and the requirement to increase the level of transparency in automated decision-making procedures, which the existing data protection regulations may be inadequate to satisfy (Mirishli, 2025). Many of the same data protection and privacy issues, especially the possibility of bias in algorithms and the lack of transparency in automated decision-making processes, also indicate similar concerns in the extensive utilization of AI in financial services to identify fraud, compliance, and more (Mirishli, 2025)(Paul and Ogburie, 2025). Accountability and prevention of such biases to ensure that people have faith in these AI-driven systems should be an interdisciplinary collaboration to ensure that the system has ethical data practices (Paul and Ogburie, 2025)(Alonso and Chatzianastasiou, 2024).
Increasingly, operators are obligated to introduce more detailed consumer protection practices such as age checks, self-care options, and clear terms and conditions to protect vulnerable gamers and foster responsible gambling behaviors. They involve the necessity of transparent disclosures regarding the probable risks related to gaming and in particular the aspects such as loot boxes, which may give an illusion of the actual price of activity and cause excessive spending (Kevin et al., 2024).
The lack of a single regulatory framework is also one of the causes of such issues since it results in the impossibility of addressing a similar approach to consumer protection across all platforms and jurisdictions. The subsequent regulatory loophole allows the predatory behavior to exist, which deters privacy in the establishment of the standard responsible gaming tools, among other supportive mechanisms, that would assist people who have already suffered some harm concerning gambling (Samsel et al., 2025). A proper regulatory framework would ideally compel operators to implement new behavioral analytics and AI-based applications to identify the right players and offer targeted interventions which would be in addition to the usual self-exclusion systems (Samsel et al., 2025). However, the use of AI to this end continues to create new ethical dilemmas surrounding data privacy, transparency in algorithms, and the likelihood of AI systems being set to reinforce a habitual addictive behavior upon the unconscious or intentional application of unwanted standards, necessitating a greater degree of regulation (Chopra, 2024)(Mukthar et al., 2025)(Binesh et al., 2025). It is especially because much of commercial algorithms used in identifying at-risk gamblers are not necessarily consistent with standard academic risk factors, casting doubt on their usability and reliability in the wider research community (Delfabbro et al., 2023). Additionally, there are researchers who propose machine learning methods to represent real-time variables in the identification of problem gamblers, hence the difference with the conventional academic methods that tend to be retrospective and that rely on variable coding (Delfabbro et al., 2023). This point of divergence highlights the necessity of regulatory frameworks deciding critically on the effectiveness and ethics of AI-based risk evaluation instruments, such that they serve long-term goals of the greater population, and not the individual interests of the company (Kevin et al., 2024). Online gaming immersion and some predatory elements of product monetization, such as loot boxes, have been demonstrated to make these risks worse, and strong regulatory controls over product design and functionality are essential in safeguarding the consumer (Petrovskaya and Zendle, 2021)(Kevin et al., 2024). In addition, the subject of responsible gaming goes beyond the individual operators to a three-party model, including the government, the operators, and individuals per se, with a commitment to the shared quality of gambling harms reduction (Catania and Griffiths, 2021).
This review has examined closely the intricate condition of the Indian new regulatory environment which encompasses sports betting and online gaming and the multiple opportunities and threats posed by such a rapid spread of internet activities. It emphasizes the urgency of a unifying, dynamic and technological-sensitive regulation policy that limits the potential of economic and the gigantic social threat of this dynamic industry. In the future, the capabilities of AI to identify and curtail problem gambling habits should be investigated, including in non-Western societies, in which gambling is informal and unstructured (Mangat et al., 2023)(Dias, 2024). It demands a better understanding of specific performance of the behavior and development of culturally competent intervention plans, which bring the benefits of technological enhancement without neglecting the local peculiarities. Moreover, the collaboration among researchers, industry stakeholders, and regulators should be maintained across the industries to develop the norm of data gathering, means of analysis, and extrapolation of findings to other gambling markets (Delfabbro et al., 2023). These forms of cooperation may prove critical to the development of robust regulatory models that are able to establish a balance between the strength of innovation and consumer security, as well as the emerging digital industries (Catania and Griffiths, 2021). The models of the future must take into account the autonomy of the regulation of all products and inducements offered by the operators and an awareness that the successful control of advertising and marketing is related to a reduction in gambling harm (Wilson et al., 2022). The magnitude of such a strategy implies that regulation interventions are not only reactive, but proactive, in other words, they must act upon what can harm before it occurs and create a safer cyber environment (Wilson et al., 2022). In addition, it is quite feasible to successfully integrate behavioral surveillance with profiling, using the objective information received first-hand via the gambling operator and which can significantly enhance the chances to detect those who are at-risk at the earliest possible stage, which, in its turn, may trigger certain intervention (Delfabbro et al., 2023).
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