Indian gaming jurisprudence has spent nearly seventy years asking one question in different forms: does an activity depend substantially on the participant’s skill, or substantially on chance? The answer has never been binary in practice — courts have consistently held that almost no game is purely one or the other — but the doctrine built around that question has decided which real-money activities receive constitutional protection as trade under Article 19(1)(g), which fall outside it as gambling, and, since August 2025, which have been legislated around entirely by Parliament. Tracing that line from its founding case to the present shows both how stable the underlying test has been and how unsettled its application to online, real-money formats remains.
The Chamarbaugwala Foundation
The starting point is State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699, decided by the Supreme Court over a prize crossword competition. The Court held that competitions in which success depends on a substantial degree of skill are not gambling and therefore fall within the constitutional freedom to carry on trade or business; competitions substantially or predominantly of chance, by contrast, are gambling and sit outside Article 19(1)(g)’s protection altogether, being treated as res extra commercium. The judgment did not require that skill be the only factor at work — only that it predominate over chance in determining the outcome. That formulation, generally referred to as the preponderance-of-skill test, has been the operative standard in every major Indian gaming judgment since.
Satyanarayana and the Rummy Precedent
The Court applied that test squarely to a card game in State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825, arising from a police raid on a Secunderabad recreation club where rummy was being played for stakes. The Court distinguished rummy from games like three-card flush, holding that rummy “requires a certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards,” and concluded it was mainly and preponderantly a game of skill notwithstanding the presence of stakes and an element of chance in the cards dealt. Satyanarayana established two propositions that later courts would lean on repeatedly: that the presence of stakes does not itself convert a skill game into gambling, and that some irreducible element of chance in a game’s mechanics does not defeat a finding of skill if skill still predominates.
Lakshmanan and Wagering on an Outcome
Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226, extended the doctrine into betting on an external outcome rather than playing a game directly. The Madras Race Club’s horse racing had been classified as gambling under the Tamil Nadu Gaming Act; the Supreme Court held that horse racing, and wagering on it, depends on a bettor’s knowledge of the horse’s form, the jockey, the going and the handicap system, and is accordingly a game of skill rather than chance. The Court struck down the state’s classification as arbitrary and violative of Articles 14 and 19(1)(g). Lakshmanan matters beyond horse racing because it confirmed that the skill test applies not only to games a person plays, but to wagers a person places on a skill-dependent outcome — the conceptual bridge later courts would use for fantasy sports.
The High Court Split on Online Formats
Applying a mid-twentieth-century test to internet-native formats produced a genuinely divided body of High Court authority. Punjab and Haryana’s High Court, in Varun Gumber v. Union Territory of Chandigarh (2017), held that a fantasy sports platform required participants to exercise judgment in team selection comparable to the skill Lakshmanan recognised in horse racing; the Bombay High Court and Rajasthan High Court reached the same conclusion in later challenges, and the Supreme Court declined to disturb those rulings on appeal. Kerala’s High Court, in Head Digital Works v. State of Kerala (2021), struck down a state notification withdrawing online rummy’s skill-game exemption when played for stakes, holding that stakes do not change a game’s skill character. Karnataka’s High Court went further in All India Gaming Federation v. State of Karnataka (2022), striking down amendments that had banned all online games for stakes irrespective of skill, as ultra vires Articles 14 and 19(1)(g). Tamil Nadu’s position moved twice: the Madras High Court struck down the state’s first online gambling ordinance in Junglee Games India v. State of Tamil Nadu (2021), then in 2023 set aside a schedule in a fresh 2022 Act that had classified rummy and poker as chance games — before ultimately upholding, in June 2025, the state’s power to regulate (though not prohibit) online real-money skill games through licensing, playing-hour restrictions and mandatory KYC. Telangana took the opposite approach outright, amending its Gaming Act in 2017 to ban all games for stakes regardless of skill; that ban’s constitutionality remains contested. SportsBettingMarkets’ compendium of legal betting apps in India tracks which platforms operate on which side of this patchwork, since the same activity can carry a materially different legal status depending on the state a user is in.
Parliament Overtakes the Doctrine
The most consequential recent development did not come from a court. The Promotion and Regulation of Online Gaming Act, 2025, passed by Parliament in August 2025 and brought into force from 1 May 2026, prohibits all online real-money games — explicitly regardless of whether skill or chance predominates — while carving out a separate exemption for recognised e-sports played without stakes. In September 2025 the Supreme Court transferred every pending High Court challenge to itself, and a three-judge bench has been seized of the constitutional questions since, with hearings repeatedly deferred into 2026. A related but distinct ruling in May 2026 held that organised online money games attract 28% GST on the full value of player deposits as betting and gambling for tax purposes, a characterisation the pending constitutional bench has not yet been asked to reconcile with seventy years of skill-predominance jurisprudence built on the opposite premise.
What Survives of the Skill Test
The preponderance-of-skill doctrine still governs prize competitions, horse racing and any real-money activity the 2025 Act does not reach, and it remains the framework state legislatures invoke when regulating rather than banning. Whether it survives as the operative test for online real-money gaming specifically now depends on a single pending judgment: whether Parliament’s statutory choice to set the skill-chance distinction aside for that category can withstand the same Article 14 and Article 19(1)(g) scrutiny that built the doctrine in the first place.