What section 7 says
Section 7 covers banks and financial institutions as well as anyone who facilitates financial transactions or authorises funds. None of them may make a payment towards an online money gaming service, and none may permit or assist one. The government's own summary of the Rules puts it plainly: banks and payment systems are barred from processing transactions linked to such games.
A breach can bring up to 3 years in prison. The fine can reach ₹1 crore, alone or with prison, and a second conviction carries 3 to 5 years and ₹1 crore to ₹2 crore. These offences are cognizable and non-bailable.
Online casino payments by method
| Method | What it is | What the law means for casino payments |
|---|---|---|
| UPI (Google Pay, PhonePe, Paytm, BHIM) | Instant bank-to-bank payments in rupees | Section 7 bars the banks and payment apps from handling money for online money games |
| Net banking, IMPS, NEFT | Transfers from an Indian bank account | Same section 7 bar on the bank |
| Debit and credit cards (RuPay, Visa, Mastercard) | Card payments through an Indian issuer | Section 7 bar; a payment abroad also meets the FEMA limits on gambling abroad |
| E-wallets (Skrill, Neteller, AstroPay) | Foreign wallets loaded from an Indian account | The bank or card loading the wallet is bound by section 7 and FEMA |
Sending money abroad for gambling
Long before the 2025 Act, foreign exchange rules limited some gambling payments abroad. Schedule I of the FEMA current account rules of 2000 bars drawing foreign exchange to buy lottery tickets, football pools and sweepstakes. Nor may it be drawn to send lottery or racing winnings abroad.
Tax on winnings and GST
The Income-tax Act, 2025, in force since April 2026, taxes net winnings from online games at 30 per cent. Tax is deducted at source on withdrawals and on net winnings still in the account when the tax year ends. Since September 2025 the GST on betting and gambling has stood at 40 per cent. The rate covers casinos and online money gaming as well.
Questions
Can UPI be used to pay an online casino?
Not lawfully. UPI payments run through Indian banks and payment apps, and section 7 of the 2025 Act bars them from handling any payment for an online money game.
Is it legal for a bank to process casino payments in India?
No. Since 1 May 2026 a bank or payment firm that processes such a payment commits an offence under the 2025 Act.
Sources
- Promotion and Regulation of Online Gaming Act, 2025: section 7; sections 9 and 10 on penalties and offences
- PIB, 30 April 2026, on banks and payment systems
- Foreign Exchange Management (Current Account Transactions) Rules, 2000, rule 3 and Schedule I
- Income-tax Act, 2025, sections 194 and 393
- GST Council, rate changes from September 2025