Online games that involve money and importantly, websites that host these games cannot be held legal, as per a ruling by Delhi court.
“The online gaming, even pertaining to the games of skill, offered by websites involving money cannot be held to be legal and therefore banks can refuse to provide normal banking services to such websites,” Additional District Judge (ADJ) Ina Malhotra said. [source]
The case was filed by a Delhi based startup which was planning to launch a gaming portal offering six games — Chess, Billiards, Rummy, Poker, Bridge and Snooker; and had interest from an investor who agreed to invest INR 5L subject to the court’s opinion on the legalities of the issues involved in this business.
What about payment gateways?
Payment gateways are subjected to RBI guidelines, which restricts the gateways to block transactions related to gambling etc. Also, the court observed that online games involving betting and websites hosting them charging a part of the prize money from participants was “illegal” in states which prohibited gambling and banks could refuse to provide normal services to such websites.
“So, while betting or playing for money among players on a game of golf, chess, bridge or billiards may be permitted, they cannot be considered legal if operated by a gaming house,” the court said. [source]