Skill Vs Chance Redefined? How Online Gaming Act, 2025 Shifts Legal Landscape

The passage of the Promotion and Regulation of Online Gaming Act, 2025 marks a watershed moment in India's gaming law landscape. For years, the question of whether a game is governed by skill or chance has occupied courts, regulators, and industry stakeholders alike. With this legislation, India now has a central, statutory framework that seeks to harmonise state-level inconsistencies and provide much-needed clarity. But does the Act end the debate? Or does it simply move the discussion to a new forum, one that is more regulatory and constitutional in nature?

The Jurisprudential Roots: From Lakshmanan to Rummy and Fantasy Sports

The distinction between games of skill and games of chance has long been the cornerstone of Indian gaming jurisprudence. The Public Gambling Act, 1867, still in force in many states, drew a bright line between the two, criminalising games of chance but exempting games where skill predominated. However, the Act left the term “skill” undefined, leaving courts to interpret it case by case.

One of the most influential rulings came in K.R. Lakshmanan v. State of Tamil Nadu^[1], where the Supreme Court held that horse racing was a game of skill. The Court reasoned that although an element of chance exists (weather, luck, etc.), the outcome largely depends on the bettor's skill in assessing the horse's pedigree, jockey's form, and track conditions. This judgment laid down the “predominance of skill” test, which continues to inform legal analysis to this day.

Subsequent cases applied the same test to other games:

• Rummy: In Director General of Police v. Mahalakshmi Cultural Association (2012), the Madras High Court recognised rummy as a game of skill, noting that memorisation, card calculation, and strategy outweighed random chance.
• Fantasy Sports: In Varun Gumber v. Union Territory of Chandigarh^[2], the Punjab & Haryana High Court held that fantasy sports were skill-based because success depends on a player's knowledge of real-world players' performance and statistical analysis. The Supreme Court's refusal to interfere gave this ruling de facto finality.

Despite these judicial pronouncements, the legal environment remained fragmented. Different states passed prohibitory laws, Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka, among others, leading to repeated litigation and constitutional challenges.

The Online Gaming Act, 2025: A Statutory Intervention

The Promotion and Regulation of Online Gaming Act, 2025 is the first central law to regulate online gaming comprehensively. Its key contributions include:

1. Statutory Classification
The Act categorises games into:

• Prohibited Online Games: Where chance is the deciding factor.
• Permissible Online Games: Where skill is not merely incidental but the decisive factor.

This shift from “predominance” to “decisiveness” is significant. Courts earlier examined whether skill outweighed chance, but the Act raises the threshold, skill must now be the determining element.

2. Licensing Framework
All permissible online games must be registered and licensed with a National Online Gaming Regulatory Authority (NOGRA). This introduces a gatekeeping mechanism, allowing the government to screen games before they reach users.

3. Consumer Protection Measures
The Act mandates responsible gaming practices, age verification, deposit limits, grievance redressal systems, and periodic disclosures to users.

4. Enforcement Mechanisms
It empowers the regulator to impose penalties, suspend licences, and even block non-compliant platforms, thus creating a compliance-heavy regime.

What Changes and What Stays the Same

While the Act brings much-needed clarity, several grey areas remain:

• Hybrid Games
  Many modern games, e.g., poker, fantasy leagues with randomised boosters, or “loot box” mechanics, involve a blend of skill and chance. Whether these meet the “decisive factor” standard will likely be litigated extensively.
• State vs Centre
  Entry 34 of the State List gives states control over betting and gambling. The Act relies on Parliament's power under Entry 31 (telecommunications/internet). Whether this central law can override state bans will likely be challenged before constitutional courts.
• Judicial Review:
  Even with statutory definitions, courts retain the power to review whether a game has been correctly classified. Thus, the judiciary's role is not eliminated but merely reframed.

Judicial and Constitutional Dimensions

• Centre–State Competence

A key constitutional issue concerns whether Parliament can enact a comprehensive law in a domain traditionally governed by states. While “gambling and betting” is listed under the State List, the Union Government has relied on Entry 31 (telecommunications) and Entry 97 (residuary powers) to justify the Act, citing the inherently online and cross-border nature of gaming. This opens the door for potential federal challenges testing the limits of legislative competence.

• Rights to Trade and Expression

Industry stakeholders may invoke Article 19(1)(g) (freedom to carry on trade) and Article 19(1)(a) (commercial speech) to contest restrictions imposed by the Act. In such cases, courts are expected to apply the Article 19(6) reasonableness standard, weighing regulatory objectives against constitutionally protected freedoms.

• Practical Enforcement Hurdles

Effective enforcement, particularly against foreign platforms catering to Indian users, remains a significant challenge. Indian authorities may need to rely on blocking mechanisms under Section 69A of the IT Act, as has been done in cases involving offshore betting websites.

Industry Impact: Compliance as the New Competitive Edge

For the online gaming industry, this Act is both a boon and a challenge.

• Legal Certainty
  Investors and operators now have a clear, centralised framework to rely upon. This is likely to attract foreign investment and allow gaming companies to expand operations pan-India.
• Compliance Costs
  Operators must scientifically demonstrate the skill element in their games, maintain detailed audit trails, and implement player protection features. Smaller gaming start-ups may find the compliance burden steep, potentially leading to market consolidation.
• Product Innovation
  Game developers will need to redesign offerings to clearly pass the “decisive skill” test, which might stifle certain chance-heavy formats but could also encourage creativity in skill-based gaming models.

Legal Impact: Litigation and Constitutional Challenges Ahead

From a legal standpoint, the Act is unlikely to put an end to courtroom battles. Instead, it sets the stage for next-generation litigation on issues such as:

• Definition of “Decisive Factor”: What percentage of skill is required for a game to qualify?
• Federalism Challenges: Can a state still ban a game that has been approved by the central regulator?
• Free Trade and Expression: Platforms may argue that blanket prohibitions violate the right to trade under Article 19(1)(g).

Given these complexities, gaming law is likely to emerge as a specialised practice area, much like data protection or fintech law.

Global Perspective: India in the Global Gaming Regulatory Map

Globally, jurisdictions like the UK and Malta have long regulated online gaming under a licensing model, with strong consumer protection norms. India's 2025 Act aligns it with this international trend but with a unique emphasis on “decisive skill,” which may make it a test case for other emerging markets.

A New Era for Skill vs Chance

The Online Gaming Act, 2025 does not end the debate on skill versus chance; it merely moves it to a statutory and regulatory plane. For policymakers, it signals a willingness to embrace the economic potential of gaming while protecting consumers. For lawyers, it opens up a new field of advisory and litigation work. And for the industry, it heralds an era where compliance, not just innovation, will define success.

India is poised to become one of the largest regulated online gaming markets in the world. The true test of this Act, however, will lie in its enforcement and the judiciary's interpretation of “decisive skill.” Until then, the skill-versus-chance debate is far from over, it has merely been redefined.