Karnataka Considers Regulating Online Betting: A Turning Point for Indian iGaming

On April 9, several leading Indian media outlets reported that the state of Karnataka is working on a new law to fully regulate gambling — both online and land-based.

At a press conference, Karnataka’s Home Minister, Gangadharaiah Parameshwara, said:

“I held a meeting with the IT Minister and industry representatives. Currently, there is no regulation. They agreed to a licensing system and legal oversight. Once the draft is ready, we will bring in a new law.”

A special committee has already been set up, including both government officials and gambling industry stakeholders. The committee has one month to prepare the draft law, which will then be sent to the state legislature in Bengaluru.If approved, Karnataka would become one of the few Indian states with clear legal rules for gambling.

According to Illia Ivanko, a lawyer at SBSB Fintech Lawyers:

“iGaming in India is still governed by an archaic Public Gambling Act adopted in 1867. In addition, the Indian Constitution allows each state to set its own rules. That’s why the situation varies greatly across the country.

Some states like Goa, Daman, and Sikkim allow casinos and regulate iGaming. But most of the country remains unregulated.

Adoption of new regulations in Karnataka is an important signal for the entire industry. The current legal vacuum has led to the growth of India’s grey iGaming market. Karnataka’s move could set the tone for the whole country.”

The Indian Premier League (IPL) is one of the most popular sports events in the country. Betting around the IPL is massive — and often illegal.

Right now, the betting revenue is largely untaxed. Karnataka’s legalisation move could unlock a new source of tax income.

Illia Ivanko shares his expert view:

“India’s Ministry of Electronics and Information Technology (MeitY) is taking action by using powers under Section 69A of the IT Act. From 2022 to early 2024, MeitY issued 1,298 blocking orders — each targeting multiple illegal offshore gambling sites.

India is still the world’s largest unregulated online gambling market, with over 480 million users as of 2024. If a major state like Karnataka introduces clear regulation, it could become a model for others.”

What This Means for the Industry

• For compliant international companies: an opportunity to legally expand in India.

• For offshore operators: a signal that the world’s largest unregulated market is moving toward its own regulation and banning illegal platforms.

• For the Indian government: a chance to control and monetise the market.

• For local companies: an opportunity to compete and partially replace offshore operators.

• For players: a chance to play on secure, government-licensed platforms that adhere to AML and Responsible Gaming regulations.

Need advice on entering the Indian market or launching a licensed iGaming business? Talk to the experts at SBSB Fintech Lawyers — we understand how this market works and can help you find the best solution.