The main legal options in India are state-run lotteries. But there’s a rising awareness of internet gambling and insights into online lottery markets.
Lottery acts in India
The 1867 Public Gaming Act that existed during the colonial era outlawed all types of gambling. But it treated lottery as a special case, leaving hopes for future regulation. For the first time, the legislature recognized that lottery is part of the Indian culture. As such, it was hard to eliminate. Lotteries were therefore delegated as regional matters of the states. After a century and two decades, the Kerala government established a national lottery program.
Today, the central government controls lotto through the 1998 Lotteries Act. The legal code provides guidelines for prize distribution, frequency and number of draws, printing, sales, the destination of lottery tickets, and penalties for players, agents, and promoters who go against the law.
States are allowed to adopt these rights or add their own rules on licensing. However, they must not contradict lottery definitions and basic schemes of the 1998 Act. This law allows the 13 states mentioned earlier to conduct national lotteries and prohibits lottery in the rest of the Indian states.
Lottery legislation in India
Other laws that influence online lottery include the 2000 Information Technology Act that was amended in 2008. It gives directives on the distribution of lottery tickets. Also, the 2010 Lotteries Rules clear up some aspects of the 1998 Lotteries Act. These decrees are, however, not included in individual state legislations. Some states provide far-reaching gambling controls, while others uphold specific rules for lotteries only.
The legal landscape of the Indian lottery requires an understanding of taxation. According to the Income Tax Act, all revenues generated by lottery proceeds, be it online or offline, must be taxed (30% flat rate). Lottery winnings that exceed Rs 50 Lakhs attract a 10% surcharge on the regular tax rate. If the winnings go beyond Rs 1 Crore, a 15% surcharge applies.
Notably, the federal government does not promote any lotto draws. Otherwise, any advertisements that claim government endorsement are false. However, New Delhi has the power to change statutory policies when officials claim a violation of the laws, e.g., in inter-state ticket sales.
But a consensus has to be reached by the state authorities involved. In case of disputes between states where the lottery is not legalized, the high court and central government usually come in to resolve.