By Vikrant Rana and Shantam Sharma
Introduction
India’s online gaming industry has been on a rapid growth trajectory. In 2024, it recorded a 7% year-on-year increase to reach 488 million gamers, according to the FICCI–EY report Shape the Future.[1] Valued at $3.7 billion in 2024, the sector is projected to more than double to $9.1 billion by 2029, with real money gaming accounting for an estimated 86% of total revenue. These figures illustrate why states are introducing regulatory frameworks to balance growth with consumer protection.
Tamil Nadu’s Prohibition of Online Gambling and Regulation of Online Games Act, 2022[2] (Tamil Nadu Act 9 of 2023) is one such regime. Supported by the Tamil Nadu Online Gaming Authority and Regulation of Online Games Rules, 2023 and the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025, it sets out clear prohibitions, licensing requirements, and operational obligations. For companies, this is not a new development to be ignored, it is an active regulatory framework that directly affects how games can be designed, marketed, and monetised in the State.
Scope and Applicability
The Act regulates all online games offered in Tamil Nadu, whether provided by a company based in the State or outside it. Two categories of providers are defined in Section 2:
- Local Online Games Providers, where central management and control or hosting infrastructure is located in Tamil Nadu.
- Non-Local Online Games Providers, operating elsewhere but whose services are accessible to users in Tamil Nadu.
Under Section 7, the law prohibits online gambling in any form and bans playing specified “online games of chance” for stakes currently Rummy and Poker, as listed in the Schedule. This prohibition extends to both local and non-local providers.
Registration and Licensing
Local providers cannot operate without a Certificate of Registration from the Tamil Nadu Online Gaming Authority (Section 10). This applies even for free-to-play games if they fall within the definition of “online game” in Section 2(k), though monetary stakes trigger additional restrictions.
The registration process is governed by Rule 3 of the 2023 Rules. An application must be submitted in Form-I, along with a fee of ₹1,00,000, providing detailed information on corporate structure, technical architecture, security protocols, game mechanics, payment systems, and responsible gaming measures. The Authority is required to process applications within 15 days, and the certificate, once issued, is valid for three years.
Non-local providers are not required to obtain registration but must comply with Section 14, which mandates due diligence to prevent prohibited games from being accessed within Tamil Nadu. This includes geo-blocking, contractual restrictions in user agreements, and verification measures to determine player location.
Operational and Technical Obligations
Compliance does not end with obtaining registration. The Authority has issued the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025, which apply to all online real money games (Regulation 2). These regulations prescribe operational standards such as:
- Age restrictions: players under 18 years are prohibited.
- Aadhaar-based KYC before account creation, with OTP authentication ( 4(ii)-(iv)).
- Cautionary pop-up messages after one hour of continuous play, repeating every 30 minutes thereafter.
- Mandatory daily, weekly, and monthly monetary limits for players, with real-time notifications when deposits are made.
- Continuous display of addiction warnings on login pages.
- “Blank hours” from 12 midnight to 5 a.m. IST, during which logins are blocked.
Technical disclosures made at the registration stage (Form-I) also require hosting details, redundancy arrangements, RNG certification for games involving randomisation, and cybersecurity compliance (such as ISO 27001:2013).
Advertising and Payments
The Act also addresses supporting activities. Section 8 prohibits any advertisement, direct or indirect, that promotes or induces participation in prohibited games. Section 9 prevents banks, financial institutions, and payment gateways from processing transactions for online gambling or scheduled games of chance.
Enforcement and Penalties
The penalty framework under Section 16 is significant. Players participating in prohibited games may face imprisonment of up to three months or fines of up to ₹5,000. Advertisers risk imprisonment of up to one year or fines up to ₹5 lakh. Providers offering prohibited services may be punished with imprisonment of up to three years or fines up to ₹10 lakh, with increased penalties for repeat offences. Corporate officers can also be held personally liable under Section 19 unless they prove that due diligence was exercised.
Compliance Snapshot for Gaming Companies
| Compliance Requirement | Applicable To | Legal Reference | Registration / License Needed? | Key Compliance Points |
| Avoid offering online gambling or scheduled games of chance for stakes | All providers | Sec. 7 & Schedule | No (prohibited entirely) | Rummy and Poker for stakes are banned |
| Registration to operate permissible games | Local providers | Sec. 10, Rule 3 | Yes – Certificate valid 3 years | Apply in Form-I, ₹1 lakh fee, provide technical and compliance details |
| Due diligence to block prohibited games in TN | Non-local providers | Sec. 14 | No license, but mandatory compliance | Geo-blocking, user contracts, identity/location checks |
| Real money game operational safeguards | All real money game providers | 2025 Regs, Reg. 4 | Local: License required; Non-local: due diligence | Age gating, Aadhaar KYC, monetary limits, pop-ups, blank hours |
| Ban on advertising prohibited games | All providers & advertisers | Sec. 8 | N/A | Avoid direct or indirect promotional content |
| Ban on payment facilitation for prohibited games | Banks, FIs, payment gateways | Sec. 9 | N/A | Block transactions relating to prohibited games |
Strategic Considerations
For gaming companies, the first step is accurate classification of the game. If it has elements of chance that dominate over skill, it risks falling into the prohibited category under Section 2(l) and the Schedule. Even games of skill must comply with the operational safeguards in the 2025 Regulations if they involve real money.
Product design should integrate compliance measures from inception: Aadhaar-based KYC, real-time monetary tracking, responsible gaming pop-ups, and blank hour enforcement. For non-local providers, geo-blocking must be technically robust and supported by clear contractual restrictions.
Conclusion
Tamil Nadu’s framework is one of the most detailed state-level gaming laws in India. It combines outright prohibitions with a structured licensing regime and stringent operational rules, particularly for real money games. In a market where player protection and regulatory compliance are increasingly linked to brand reputation, meeting these requirements is not just about avoiding penalties—it is also a commercial imperative. Operators who design their systems with these obligations in mind will be better positioned to compete in India’s fast-growing and highly scrutinised gaming sector.