Gambling in India
Gambling in India is heavily restricted except for selective categories like lotteries and horse racing. Approximately 40% of internet users in India have admitted in the past to visiting a gambling site - but not placing a bet. However, this position has changed significantly in the year 2014 as more and more people have started making cash bets upon prohibited betting and gambling activities in India.The critics of gambling claim that it leads to crime, corruption and money laundering while those in favour of a regulated gambling system in India argue that it can be a huge source of revenue for the state. It is noteworthy that casinos in Goa contributed Rs. 135 crores to the state revenue in 2013. 
On the dark side of gambling, critics refer to the high amounts of crime and money laundering increasing due to this. Recently the owner of an online betting website for IPL 7 was arrested  in Mumbai for allowing betting on his website. Similar arrests have been made by police of Delhi, Ahmedabad, Mumbai, etc. The Central Bureau Of Investigation (CBI) has also established a Sports Integrity Unit to investigate illegal sports betting in India.
Legality Of Gambling
Gambling is a state subject and only states in India are entitled to formulate laws for gambling activities within their respective states. The Public Gambling Act of 1867 is a central law that prohibits running or being in charge of a public gaming house. The penalty for breaking this law is a fine of 200 or imprisonment of up to 3 months. Additionally, this Act prohibits visiting gambling houses. A fine of 100 or imprisonment of up to one month is the penalty.
The Information Technology Act 2000 regulates cyber activities in India and prohibits publication or transmission of information that can corrupt people. This includes online gambling and the punishment for such activities is much more serious than for offline gambling operations – the fine is 100,000 or imprisonment up to 5 years. Further, online gambling is a banned offense in the state of Maharashtra under the "Bombay Wager Act".
Only three states allow casinos, Goa , Daman and Sikkim. There are two casinos in Sikkim called Casino Sikkim and Casino Mahjong and 10 in Goa, of which six are land based and four are floating casinos that operate on the Mandovi River. The floating casinos in Goa are Casino Deltin Royale, Casino Deltin Jaqk, Casino Pride and Casino Pride 2. While the first two are controlled by the Deltin Group, the latter two are managed by the Pride Group. According to the Goa, Daman and Diu Public Gambling Act, 1976 casinos can be set up only at five star hotels or offshore vessels with the prior permission of the government. This has led the Deltin Group to open the first land based Casino in Daman which is set to open soon. News reports also suggest that Vishakapatnam is also being looked on as the next casino destination. 
Online gambling is in its infancy in India, but Sikkim planned to offer three online gambling licences in 2010. This failed despite India being the most sought out country for online gambling. Sikkim also permits an online lottery, operated by Playwin, which takes bets from players throughout India. It is expected that other states will follow Sikkim shortly, thereby opening up a major online gambling market throughout India.
Online gambling laws of India are complicated in nature  as gambling is a state subject and different state have enacted different laws regarding gambling activities. For instance, online gambling is a banned offense in the state of Maharashtra under the "Bombay Wager Act" and different states tend to operate on their own authority.
Online gambling in India is governed by the Information Technology Act 2000 that is a centre subject. However, the legality of use of Bitcoins for gaming and gambling in India is still doubtful  and full of legal risks.
We have a central law on gambling called the Public Gambling Act of 1867. Similarly, we have many state laws on gambling that are mostly based upon the central law. Further, almost all the state laws are regulating real world or offline gambling in India. The exception in this regard can be found in the laws applicable in places like Goa and Sikkim. In Sikkim, a provisional And Regular Licence can be obtained under the Sikkim Online Gaming (Regulation) Act, 2008. In October 2014, Sikkim Government has granted the first regular license to M/s. Future Gaming Solutions Private Limited headed by lottery king Santiago Martin to start online gaming operations within the territorial boundaries of Sikkim. 
There are certain rules to decide whether online gambling and betting legal in India or not.
In short, legality of online gambling and online gaming is still a grey area that requires extensive legal research and compliances before launching the website in this regard.
Legalisation Of Gambling
Despite the existing prohibitive legislations, there is extensive illegal gambling throughout the country. The Indian gambling market is estimated to be worth US$60 billion per year, of which about half is illegally bet. According to the Indian National Newspaper, the Chief Executive officer for the International Cricket Council (ICC) said he was in favour of legalizing sports betting. He believes the illegal funds profited are through underground bookies that used the money to fund terrorism and drugs.
Technology And Gambling
Technology trends, in particular mobile penetration in countries such as India will be a substantial market opportunity for gaming operators once regulated. The parallel trends of significant mobile betting uptake in already regulated markets demonstrates the potential for channels such as mobile to become the primary form of customer engagement. Both mobile gaming market and legal challenges must be kept in mind by entrepreneurs in this regard.
Blocking Of Websites
In May 2011 India passed the Information Technology Act 2000 which tries to put a stranglehold on internet gambling. This new act, which covers gambling sites, holds the Internet Service Providers responsible for blocking offshore betting sites. However, techno legal issues regarding online gambling are much more complicated than mere blocking. Andhra Pradesh CID has already requested Cert-In to block Playwin’s online lotteries website in AP.
One of the biggest obstacles faced by sports bettors in India is the fact that depositing to foreign bookies is extremely difficult. Typically, the majority of users deposit to online bookies using Moneybookers or Neteller. Some attempts to deposit using a Visa or MasterCard may fail. The same is true of online bank transfers. In order to circumvent these blocks, savvy internet users have started to use ewallet services for depositing. These services add a middle layer to disguise the nature of transactions, enabling users to get around the blocks by first depositing to an ewallet and then using that ewallet to fund an online betting account in Rupees. This is important because it circumvents legal issues that may have arisen about Foreign Exchange law.
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