IS ONLINE LOTTERY LEGAL IN INDIA?

Online lottery – both domestic and international – is legal in India

The Indian lottery law has given individual States the freedom to come up with their own online (as well as offline) lotteries. However, presently there’s no India-based online lottery. The good news is there is no specific ban on international lotteries in almost all States, which means they are legal, too.

Now that we have your attention, check out our list of lottery sites that are legit and safe for Indian online lotto players. For more information on what we just said, read on.

Legal Lottery Sites Listed Here

Right off the bat, there is no sweeping ban on lottery as such in India unless it is privately held. As mandated by the Central Government, individual are free to formulate their own laws for paper as well as online lottery. Accordingly, 13 States have legalized the lottery while others have banned it.

However, all legal Indian lotteries are currently offline and paper-based. Even Meghalaya's Shillong Teer, which is the only government-approved archery-based lottery in India, happens offline. Playwin, sanctioned by the Government of Sikkim, was the only India-based online lottery that was once legal, but now has been discontinued due to growing debts. But, since the central lottery law doesn’t specifically cover international online lotteries that are organized abroad, they are safely considered legal and played nationwide.

So, the answer to the big question – is online lottery legal in India – would be a gentle yes. Of course, this premise wouldn’t be true to a T in States that choose to pass Acts to specifically ban online lottery from all sources, including their own. One such State is West Bengal that has banned online lotteries from all Indian States as well as other countries.

Too complicated? Let’s discuss this deeper to understand better.

Before everything else, it is important to have some knowledge about the two main Acts that govern the legality of lottery in India: The Lotteries (Regulation) Act, 1998 and The Lotteries (Regulation) Rules 2010.

The Lotteries (Regulation) Act, 1998 in Brief

Lottery has been part of Indian history since time immemorial. However, due to the lack of proper rules, this game of luck has been put to wrong use time and time again and people swindled out of their money.

A paradigm shift was brought about by the Kerala State Government way back in 1967 when it initiated its very own lottery department and banned all other private lotteries.

Other States started following suit. Consequently, on October 2nd, 1997, the Central Government enforced the Lotteries (Regulation) Act, 1998, which is now applicable nationwide.

This Central Act can be summarized in the following pointers:

1. State Governments can organize, conduct or promote a lottery only if…
   1. Prizes aren’t based on single digit outcomes.
   2. No prizes are offered on pre-announced numbers.
   3. Lottery tickets are printed within the State and bear the imprint and logo of the State to ensure authenticity.
   4. The State Government sells the tickets directly or through authorized distributors and selling agents.
   5. The money from the sale of tickets is credited into the State’s public account.
   6. All draws are conducted by the State Government itself.
   7. Prize money that is unclaimed or not distributed would become the State Government’s property.
   8. The place of draw is located within the concerned State itself.
   9. No lottery has more than one draw per week.
   10. The time of draw would be prescribed by the State Government beforehand.
   11. Not more than 6 Bumper Draws would be drawn in a calendar year.
   12. All other conditions prescribed by the Central Government are followed.
2. A State Government may prohibit within its State the sale of ticket to any lottery organized, conducted, or promoted by any other Indian State.
3. The Central Government may prohibit a State Lottery organized, conducted or promoted in a way that deviates from the set conditions.
4. The Central Government may ban a State Lottery, the tickets of which are sold in another State if that state intends to ban it or the lottery in general.
5. Any contravention committed under this Act by an individual or company is a criminal offense punishable by law with rigorous imprisonment for a term of up to years or with fine or with both.

The Lotteries (Regulation) Rules, 2010 for Lotto Online

By 1995, internet service was publicly available in India, which pointed toward all possibilities of playing the lottery. In fact, by 2001, India had already seen its first online lottery – Playwin – sanctioned by the Sikkim Government.

It was run by the Essel Group pan-India, which means anyone from any State could play it. Tickets could be bought online as well as through retailers, which was a major convenience. Needless to say, the popularity of Playwin soared.

Since the Lotteries (Regulation) Rules couldn’t provide a proper definition for such lotteries, the Central Government had to intervene and formulate a new set of rules. Thus, on 1st April 2010, the Lotteries (Regulation) Rules, 2010 came into being to include online lotteries and a few other clauses regarding paper lotteries.

According to the Rules, a State Government is free to organize paper lottery as well as online lottery or both, provided the conditions specified in the Lotteries (Regulation) Act are met.

The added Rules define online lottery in India as a system where players are permitted to buy lotto tickets generated by a computer or online machine at authorized lottery terminals. All information regarding the sale of tickets and a player’s choice of numbers are registered with a central computer server during the purchase.

The Rules further define central computer servers as a system of multiple computers at a central location under the direct control of a State that organizes, manages, monitors, and controls an online lottery system.

In short, Indian lottery law has provisions for States to conduct online lotteries and sell tickets using computers. However, it is interesting that nothing has been mentioned about the sale of tickets using the web.

There is nothing concrete about the “lottery terminals” where computer-generated tickets are supposed to be available. They could be anything – a physical store or even a website.

Legal Online Lottery in India – Is There One?

Playwin, the only government-approved Indian online lottery was discontinued in 2019 following issues related to insolvency. None of the paper lotteries available in India allow the sale of digital tickets. It means, India currently does not have any legal online lottery of its own, although the leeway to come up with one is still open.

Lottery in India being a State subject, some States like Maharashtra and West Bengal have proactively banned online lotteries – the former of other States and the latter of the whole world.

However, this doesn’t nullify the clear statement available in the Lotteries (Regulation) Rules which says every State is free to organize online lotteries.

Meanwhile, there is no ban on international online lotteries as well, except in West Bengal. Players of most States can play them because such lotteries aren’t governed by Indian law in the first place. Unless these States take up measures to specifically block IPs from accessing international lottery websites, a complete ban cannot be established.

A case in point is the epic win of Partho Mondal from West Bengal on Lottoland. The player scooped a whopping ₹52 lakhs by playing the lottery site's exclusive game – Malamaal Daily. If strict rules were in place, how come Partho took home all that money?

Lottery sites operated by foreign companies let Indian lotto players participate in them by acting as ticket messenger services or betting portals. These sites, in turn, are licensed and regulated by foreign gaming regulators that are legit and reputed. Only these regulators and the local jurisdiction and not the Indian legal system can put a stop to their operations.

Furthermore, when Indian players enter world lotteries through such sites, they are technically using a web portal hosted and managed outside the country. Therefore, they, too, are free from the purview of the Indian lottery law.

You might also point out the fact that most of these lotteries are privately held, which should make them illegal in India under IPC 1860. But, the country’s law talks only about private lotteries that are India-based, not foreign-based.

As mentioned earlier, the drawings are governed by the legislature of the concerned countries that organize them. India has nothing to do with them.

In short, it is safe to say that…

International Online Lotteries Are Mostly Legal in India

At the risk of repeating, we will state the fact again: entering international lotteries from India via foreign lottery websites is mostly legal by dint of the loopholes in the Indian lottery law.

Find your 10 best options to play legal online lottery in India in the list below:

1. US Powerball
2. Mega Millions
3. EuroMillions
4. EuroJackpot
5. Mega-Sena
6. Oz Lotto
7. SuperEnalotto
8. Lotto India
9. UK Lotto
10. La Primitiva

You can buy an official ticket or bet on the outcome of a world lotto draw right from the comfort of your home! All you need to do is register with the lottery sites that let you enter the draws.

Some of these sites behave as online lotto agents or ticket concierge services that will buy authentic tickets on your behalf after you pay up. The purchase is guaranteed.

For records, you would be sent a scanned copy of the ticket as proof of purchase. If you win, you would be notified via email or SMS, or over a phone call. Winnings would be paid by the original organizers of the lottery and not the operators of the lottery site.

The other way of playing international lotteries online is to bet on the outcome of the official draw. The process and prizes remain the same: you pick the numbers you think would be drawn.

If you guess correctly, you win the same rewards the official lottery hands out to its winners. The only difference is you would be paid out by the lottery site with the help of its insurance-backed business model, not the official organizers of the lottery.

Please keep in mind that both ways of participating in international online lotteries are legal in India. The only hindrance you might face is due to the (Foreign Exchange Management Act) FEMA, which is a hot topic of discussion among supporters as well as opposers of international lottery in India. We have discussed it in detail in the section below. 

The Fear of FEMA

Whenever a lotto enthusiast prepares to play at an international site, there would be someone or the other reminding the poor chap about FEMA. This is one subject no lottery site openly discusses. Maybe they fear the loss of sales. Maybe not. But, we believe players should receive the right information.

Yes, FEMA rules can make it difficult for Indian lotto players to participate in international lotteries and claim prizes if they win. Before we discuss why, check out the FEMA restrictions regarding lottery, which have been summarized in the following 3 pointers:

• Remittance for the purchase of foreign lottery tickets is illegal. You cannot convert your India Rupees to a foreign currency to send it to a foreign website that lets you buy tickets to international lotteries.
• Remittance out of lottery winnings is illegal. If you happen to win, you cannot have the foriegn money that enters your bank account, converted to Indian Rupees.
• Use of ICCs and IDCs for the purchase of lottery tickets is illegal. ICCs and IDCs are International Credit Cards and International Debit Cards issued by overseas banks or other reputed agencies to resident individuals maintaining a foreign currency account with an authorized dealer in India or a bank abroad.

The above pointers are enough to drive an Indian lotto player off, especially if he is unaware of the loopholes. Let's discuss them in another set of pointers:

• Converting Indian Rupees to foreign currency to buy a lotto ticket online would be illegal only when it shows in your bank statement as a direct transaction made to the website. You can bypass it by using an e-wallet such as Skrill. How?
  
  Fund your Skrill Account first and then use it to make a deposit on the website. On 12th October 2021, Skrill amended its policies to let users spend funds withdrawn from any Skrill merchant to your Skrill Account as per their wish, without restrictions.
  
  It means you can now spend the funds in your wallet on lottery websites to buy tickets. Even better if the site supports Skrill as a payment method because currently there are zero restrictions on funds you send to other Skrill users.
  
• In case you win, the first thing to do is keep the affair hushed because you don’t want to attract people’s attention. FEMA rules will hound you only if you take the winnings directly into your bank account. Bypass this, too, by asking to get paid via an e-wallet.
  
  However, if you’ve won the jackpot, there is no way you’d be paid in your e-wallet. The money would either be sent to your bank account directly or in the form of an encashable cheque. To avoid legal hassles, set up a revocable trust that will protect your identity as well as safeguard your winnings. Provided you can anonymously claim the reward, you can take the money as charity in your trust as a trustee instead of a winner.

• Because FEMA takes special interest in ICCs and IDCs, do not use them. There have been instances when Indian banks have alerted their card holder customers to avoid making transactions for the purchase of lottery tickets online.
  
  Even the RBI has asked all banks to be extra cautious about such transactions. As mentioned earlier, it is better to err on the side of caution and use e-wallets for purchase.

• Look for websites that support the Indian Rupee. Such sites receive and payout money in Rupees so there is no question of ‘foreign exchange’ and hence, FEMA.
  
• Since the restrictions are mostly on buying international lottery tickets with Indian money, pick websites that let you bet on the outcome instead. Technically, you wouldn’t be buying tickets and hence, not breaching the law.

FAQ

Conclusion

Questions regarding the legality of online lottery in India are usually answered with much confusion. However, with the right guidance you can leverage the loopholes, play the biggest international lotteries online from India and even claim your reward when you win.As the saying goes – “if the law does not punish a definite action or does not tax a definite thing, this is not a loophole. It is simply the law.”