The short answer is “complicated, depends on your state, and the rules just changed in May 2026”. The longer answer is below, what PROGA 2025 actually says, what the Supreme Court is reviewing, what state-level rules override, and what the practical implications are for someone in Bengaluru or Pune playing on Funexchange tonight.
This page is a summary of our research, not legal advice. The legal landscape for online gaming in India is shifting quarter by quarter. If you’re a high-volume player or operator, talk to a sector-specialist lawyer. We’ve found Khaitan & Co and Nishith Desai Associates to have the most current iGaming-law publications, both freely available online.
The Promotion and Regulation of Online Gaming Act, 2025, passed by parliament in late 2025, came into force on 1 May 2026. The act has three operative parts.
PROGA prohibits any Indian-licensed entity from offering real-money online games of chance (which includes Andar Bahar, Teen Patti, slot games, and live casino games). Operators that previously held state-level licences (Sikkim, Nagaland) had until 1 May 2026 to wind down their real-money offerings or migrate to offshore licences.
PROGA carves out an exception for “games of skill” with a defined certification framework. Rummy, fantasy sports, and chess have been certified as games of skill and continue to operate under Indian licences. Andar Bahar has not been certified, it’s a chance-based game by court precedent and PROGA classification.
PROGA imposes obligations on payment processors to identify and block transactions to non-certified gaming operators. The RBI issued supplementary guidance in April 2026 that defines specific MCC (merchant category codes) for monitoring. The practical effect: most major Indian banks now decline credit-card transactions to gaming MCCs. UPI is harder to control because it routes through individual merchant IDs rather than MCC codes, which is why UPI remains the dominant rail for Indian online casino deposits.
PROGA was challenged in the Supreme Court within weeks of coming into force. The challenges (filed by various operator associations and player rights groups) raise three constitutional questions.
1. State vs central jurisdiction. Gambling is on the state list in Schedule VII of the Constitution. The challenge argues PROGA’s blanket national ban overrides state-level frameworks (Sikkim, Goa) that operate under their own legal authority. This is the strongest constitutional argument and the one the SC bench has expressed initial sympathy with.
2. Skill-vs-chance line. The challenge argues PROGA’s certification framework is arbitrary, that some certified “skill” games involve as much chance as Andar Bahar, and the certification process lacks transparency. This argument has less traction but could narrow PROGA’s scope at the margins.
3. Right to livelihood / Right to entertainment. Article 19 challenges arguing that online gaming is a constitutional right. Weak argument that the SC bench has signalled it’s unlikely to accept.
The Supreme Court has not set a final hearing date as of this writing. Industry estimates put the final ruling at late 2026 or early 2027. Until the ruling, offshore-licensed operators continue to accept Indian players in a “regulatory grey zone” that nobody, operator, player, or government, wants to clarify too aggressively.
State-level rules predate PROGA and continue to apply where PROGA hasn’t explicitly overridden them. Here’s where each major state stands on online Andar Bahar in 2026.
| State | Status | Notes |
|---|---|---|
| Maharashtra | Restricted | State pre-PROGA position was restrictive on chance games. PROGA reinforces. |
| Karnataka | Restricted | Karnataka Police Act amendments in 2021 already banned online gambling. |
| Tamil Nadu | Restricted | Tamil Nadu Prohibition of Online Gambling Act 2022 (struck down then re-enacted). |
| Andhra Pradesh | Restricted | 2020 amendments banned online gambling specifically. |
| Kerala | Restricted | Strong cultural anti-gambling position; specific bans on real-money chance games. |
| Telangana | Restricted | Telangana Gaming Act 2017 amendments. |
| Sikkim | Permissive (state-licensed) | Has historically licensed online gaming. PROGA overrides at federal level but state pursuing SC clarity. |
| Goa | Permissive (land-based casinos) | Land-based casinos legal. Online not explicitly carved out under PROGA. |
| Daman & Diu | Permissive (land-based) | Similar to Goa. |
| Nagaland | Permissive (skill games) | Licenses skill-based games only. |
| Most other states (UP, MP, Delhi, etc.) | Defer to central | No state-level online gaming law. PROGA applies. |
The state-level restrictions target operators, not individual players. There is no recorded case of an Indian player being prosecuted for playing online Andar Bahar at home on an offshore-licensed site. The restrictions are enforced through (i) blocking domestic operator websites and (ii) restricting payment-processor routing to offshore sites.
The four sites we recommend on our best sites page operate under offshore licences (Curacao primarily, Mahadev Book additionally Comoros). Their websites occasionally get DNS-blocked by Indian ISPs in restrictive states, players in Tamil Nadu, for example, sometimes need to use VPN access to reach the sites. The operators’ WhatsApp support is unaffected and continues to function normally regardless of DNS status.
Payment routing has gotten harder since the April 2026 RBI guidance. Credit cards are largely blocked. UPI continues to work but the operators rotate UPI handles monthly to stay ahead of banking compliance. IMPS / NEFT continue to work for most players.
The four operators we recommend hold licences from Curacao Egaming Authority (or Mahadev Book additionally Comoros). What that gives players in practice.
Curacao licences impose RNG certification (third-party audited fairness), anti-money-laundering reporting, and basic player protection requirements (self-exclusion tools, deposit limits). The standard is meaningfully lower than UK Gambling Commission or Malta MGA licensing but considerably higher than completely unregulated operators.
Indian-specific consumer protection. If an offshore operator refuses to pay out a withdrawal, your recourse is the Curacao regulator, which has minimal enforcement teeth and slow response times. You don’t have access to Indian consumer courts, the RBI ombudsman, or Indian banking regulators for disputes with offshore operators. This is the single biggest legal risk for Indian players.
Stick to operators with long established track records, fast withdrawal speeds, and active India-facing customer support. Don’t keep large balances on any single offshore site, withdraw winnings promptly. The four we recommend have all been operating 4+ years with no major payout disputes, but the dispute-resolution risk is real for any offshore operator.
Online gaming winnings are taxed under Section 194BA of the Income Tax Act (effective FY 2023, refined in FY 2025 Budget). The rate is 30% TDS on net winnings at withdrawal. PROGA does not change the tax position, winnings remain taxable regardless of where the operator is licensed.
In practice: the four offshore operators we recommend deduct 30% TDS on net positive withdrawals and credit the TDS to your PAN’s Form 26AS. You declare gross winnings as Income from Other Sources in your ITR. The mechanics are the same as for Indian-licensed operators, the TDS infrastructure functions independent of the operator’s licence jurisdiction.
If your effective income tax rate is below 30%, you can claim a refund of the difference. Higher than 30% means you owe the difference. The 26AS / ITR flow is what reconciles this.
If the Supreme Court upholds PROGA in late 2026 / early 2027, the offshore-operator grey zone narrows further. Three likely consequences.
1. Payment-rail squeeze tightens. UPI routing to offshore operators becomes harder. Operators move to crypto or stablecoin rails, raising friction for players.
2. Some operators exit the Indian market. Smaller offshore operators may decide the compliance overhead isn’t worth it and stop accepting Indian players. The four we recommend are large enough that we expect them to continue, but smaller operators are at risk.
3. ISP-level blocking expands. Currently spotty; could become systematic. VPN usage will rise.
None of these scenarios make playing Andar Bahar online impossible. They just raise the friction. Industry projections suggest Indian online casino volume drops 30 to 50% if PROGA is upheld, then stabilises at a smaller but still substantial base.
If the SC strikes down PROGA’s blanket national ban, state-level rules continue to operate. Sikkim and Nagaland-licensed operators could resume. Restrictive states (Karnataka, Tamil Nadu, etc.) would still ban play through state law. Offshore operators would face less federal pressure but still need to navigate state-level rules.
This is the more bullish scenario for the iGaming industry. Most industry analysts assign about 35% probability to a full strikedown, 40% to a partial strikedown (where some PROGA sections are upheld and others narrowed), and 25% to PROGA being upheld in full.
Yes. Indian court precedent classifies Andar Bahar as a chance-based game. The 1996 Supreme Court ruling in K.R. Lakshmanan vs State of Tamil Nadu established the “preponderance of skill” test for distinguishing skill games from chance games, and Andar Bahar fails that test by a wide margin. There is no skill component once a bet is placed.
The 1996 ruling has been cited in subsequent court decisions affirming Andar Bahar’s classification. Karnataka’s 2021 amendments, Tamil Nadu’s 2022 act, and PROGA 2025 all treat Andar Bahar as a chance game.
This matters because the “skill game” exception in PROGA’s certification framework doesn’t apply to Andar Bahar. Even if PROGA is partially struck down, Andar Bahar’s chance-game classification likely remains intact and the offshore-licensed grey zone continues.
Practical guidance for an Indian player in 2026.
1. Play through offshore-licensed operators only. The four we cover on our best sites page are vetted and we’d send a friend to any of them. Avoid uncertified offshore operators that pop up in Telegram channels.
2. Use UPI from your primary bank account. Avoid credit cards (mostly blocked anyway). Avoid international cards. Avoid crypto for now, adds complexity and tax-reporting friction.
3. Keep balances small. Don’t leave more than 2 weeks of session bankroll on any single operator. Withdraw winnings promptly.
4. Track your turnover and net P&L for TDS purposes. Even casual players should keep a simple spreadsheet, total deposits, total withdrawals, net position. Makes ITR filing easier in July.
5. If your state has explicit restrictions (Karnataka, TN, AP, Kerala, Telangana), understand the risk profile. No reported cases of individual player prosecution but the legal pressure is real and the situation could escalate.
6. Watch for the SC ruling. The ruling will reshape the landscape regardless of outcome. Reassess your operator choices and risk tolerance after the decision lands.
No reported cases of individual player prosecution exist as of 2026. PROGA and state-level restrictions target operators and payment processors, not players. The practical legal risk to individual players is essentially zero. This is not the same as saying it’s “legal”, it’s saying the enforcement mechanism doesn’t reach individual players in the current framework.
Theoretically possible under RBI guidance from April 2026, but rare in practice. The mechanism is that gaming MCC codes are flagged and banks have discretion to restrict accounts with high gaming-transaction volume. We have not seen this enforced for routine UPI deposits to gaming UPI handles. High-volume players (₹5L+ monthly turnover) should diversify across multiple bank accounts as a precaution.
The status is ambiguous. Offshore operators are not Indian-licensed, so PROGA’s ban on Indian-licensed gaming doesn’t directly apply to them. But Indian players accessing them are technically in a regulatory grey zone. No court has ruled definitively on Indian-player liability for accessing offshore operators. The SC’s pending PROGA ruling may clarify this.
Play through offshore-licensed operators with long track records (the four we recommend). Use UPI from your primary bank account. Pay TDS at withdrawal and declare winnings in your ITR. Keep balances small. Don’t try to evade tax reporting, the TDS infrastructure functions cleanly even on offshore operators and reconciles with your PAN.
If you live in a permissive state (Sikkim, Goa) the impact is minimal regardless of ruling. If you live in a restrictive state (Karnataka, TN, etc.) the SC ruling is mostly relevant for operator survival rather than your personal risk. The biggest impact will be on payment-rail availability, if PROGA is upheld, UPI deposits get harder.
You don’t pay tax on losses. TDS is deducted only at the point of withdrawal when you’re net positive across the financial year. If you finish the year net negative, no TDS is deducted (and you can’t claim losses against other income, gaming losses don’t offset salary income).
Effectively zero. The skill-vs-chance test has been settled by courts for decades. Andar Bahar is a pure chance game once the bet is placed. The skill-game certification under PROGA applies to games like rummy and fantasy sports where measurable skill outcomes exist. Andar Bahar can’t qualify.
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The four operators we recommend all hold offshore licences and continue accepting Indian players during the SC review. Funexchange is the fastest, cheapest, and biggest of the four.