Bhutan: gambling regulation and licensing

Bhutan prohibits gambling, with one exception: an authorised lottery, run by the state-owned Bhutan Lottery Limited. There is no gambling regulator and no licensing regime for private operators, online or land-based. The Penal Code of Bhutan 2004 makes it an offence to stake or wager something of value on a contest of chance or an uncertain future event (s. 393). The offence is a petty misdemeanour carrying one month to less than a year in prison, and a repeat conviction is enhanced to a misdemeanour; an authorised lottery is not gambling (s. 395). The Information, Communications and Media Act 2018 adds an offence of betting or wagering through any ICT facility or service, covering players and any internet service provider involved, and lets a court or the Bhutan InfoComm and Media Authority order providers to stop an infringement (s. 429). Betting, wagering or gaming owned by the State is exempt (s. 430). Bhutan Lottery Limited was launched under the Ministry of Finance in 2016, moved to the De-Suung Skilling Program in October 2023, and has sold online lottery games since May 2021; it reports 2025 sales of Nu 1,241.11 million and prizes of Nu 870.49 million. Since 1 January 2026 the Income Tax Act 2025 applies a final 20% withholding tax to lottery, betting and gambling winnings, exempting winnings of up to Nu 5,000. Advertising gambling of any kind is barred by BICMA content rules. Enforcement by the Department of Law and Order, the Royal Bhutan Police and the Royal Monetary Authority targets betting groups on Telegram, WeChat and TikTok, including bank account freezes in 2024 and 2025. A Penal Code amendment bill whose committee proposed longer prison terms for gambling failed in the National Council in December 2025.

Regulator

Not yet verified

Regulator type

No dedicated regulator

Headline tax

Not yet verified

Licence required

Yes

Minimum age

Not yet verified

Tax base

No gambling duty exists because gambling is prohibited. The state lottery operator pays company income tax on profits at 22% from 1 January 2026 (Income Tax Act 2025, Schedule 1, para. 4), and GST on lottery supplies is the tax fraction of the retail ticket price (GST Act 2020, s. 130). Bhutan Lottery Limited reports Nu 75.73 million of corporate income tax and Nu 31.58 million of winnings tax remitted for 2025.

Licence required

Yes

Application window

Closed

Local establishment required

Not yet verified

Local server required

Not yet verified

Notable licensees

Bhutan Lottery Limited (state-owned; subsidiary of the De-Suung Skilling Program since 19 October 2023)

Barriers to entry

No private operator can obtain any gambling licence, online or land-based. Offering betting through ICT is an offence for operators and involved internet service providers, and the ICM Act reaches offences committed abroad that involve a computer system in Bhutan (ss. 4 and 429).

Headline GGR tax

Not yet verified

Effective date

1 Jan 2026

Corporate tax

22%

Player winnings tax

Winnings from lotteries, betting or gambling are subject to a 20% final withholding tax (Income Tax Act 2025, s. 280 and Schedule 1, para. 7(2)(c)); winnings up to Nu 5,000 per winning are exempt (Schedule 3, para. 11). Before 2026 the rate was 20% on lottery winnings of Nu 5,000 or more per ticket (Income Tax Act 2001, Part IV, Chapter 1).

Withholding mechanism

The payer withholds tax from winnings (Income Tax Act 2025, s. 266) and the tax withheld satisfies the winner's liability (s. 281). Winnings are sourced in Bhutan when the operator is located in Bhutan (s. 243(4)).

VAT treatment

GST at the 5% standard rate from 1 January 2026; for lottery supplies GST is the tax fraction of the retail price, prize money gives no input credit, and sales through intermediaries are taxed at the full retail price (GST Act 2020, ss. 130 to 134; GST (Amendment) Act 2025, s. 67).

Tax base

No gambling duty exists because gambling is prohibited. The state lottery operator pays company income tax on profits at 22% from 1 January 2026 (Income Tax Act 2025, Schedule 1, para. 4), and GST on lottery supplies is the tax fraction of the retail ticket price (GST Act 2020, s. 130). Bhutan Lottery Limited reports Nu 75.73 million of corporate income tax and Nu 31.58 million of winnings tax remitted for 2025.

Minimum age

Not yet verified

National self-exclusion

Not yet verified

AML regime

Anti-Money Laundering and Countering of Financing of Terrorism Act of Bhutan 2018. Casinos and gambling operators are not listed as designated non-financial businesses or professions (s. 187(7)).

KYC requirements

Not yet verified

Stake limits

Not yet verified

Advertising permitted

No

Social media rules

The Department of Law and Order has warned the public against gambling run through social media, including paid "Spin the Wheel" and lucky draw games on TikTok live sessions, which it treats as gambling even when prizes are in kind.

Penalties for breach

Breaches of the content rules are dealt with under the ICM Act, rules, licensing terms or other applicable laws, with penalties set by BICMA according to severity (Rules and Regulations on Content 2019, ch. 3).

Credit card ban

Not yet verified

Crypto stance

Not yet verified

Permitted methods

Bhutan Lottery Limited online lottery: RMA payment gateway, Bank of Bhutan (mBoB) and T Bank

Local rails

RMA payment gateway, mBoB (Bank of Bhutan), T Bank

Payment blocking regime

No statutory payment blocking regime for gambling. The Department of Law and Order and the Royal Monetary Authority have frozen bank accounts linked to online gambling organisers: 77 accounts in one week in 2024 and 26 accounts in 2025.

ISP blocking

Not yet verified

DNS blocking

Not yet verified

Payment blocking

Yes

App store takedowns

Not yet verified

Administrative penalties

A court or BICMA may require ICT and internet service providers to terminate or prevent an online gambling infringement (ICM Act 2018, s. 429(4)). No published blocklist was located.

Criminal penalties

Gambling is a petty misdemeanour: one month to less than one year in prison (Penal Code ss. 13 and 394), enhanced to a misdemeanour, one year to less than three years, on a repeat conviction (s. 15). For online gambling a court may add a fine as it deems appropriate (ICM Act 2018, s. 429(3)). In a 2020 Thimphu case the court allowed the convicts to pay money in lieu of their prison terms.

Operator liability

Police have said they will track down and detain organisers of online betting groups, and the owner of a Thimphu gambling house was among those arrested in 2023. Internet service providers involved in betting or wagering fall within the ICM Act offence (s. 429(2)).

Player liability

Staking or wagering is itself the offence (Penal Code s. 393); players face one month to less than one year in prison, and the ICM Act offence covers the online gambler (s. 429).

1. 11 Aug 2004

   Penal Code of Bhutan 2004 in force, making gambling a petty misdemeanour and exempting authorised lotteries

2. September 2011: previous Bhutan Lottery operation closed and lottery sales banned

3. 8 Apr 2016

   Royal Bhutan Lottery Limited launched as a state-owned enterprise under the Ministry of Finance

4. 4 Nov 2016

   First paper lottery, Phuensum Dharim, goes on sale (date given by Bhutan Lottery Limited; BBS reported the launch on 3 November 2016)

5. 23 May 2017

   Home Minister tells the National Assembly the state lottery is not gambling

6. 8 Jan 2018

   ICM Act 2018 comes into force, with the online gambling offence (s. 429) and the state-owned gaming exemption (s. 430)

7. 18 May 2020

   BBS reports a Department of Law and Order notification, issued a few weeks earlier, that Teer lotteries run on social media are illegal gambling

8. 14 May 2021

   Bhutan Lottery Limited launches online lottery services

9. 19 Oct 2023

   Ownership of Bhutan Lottery Limited transferred from the Ministry of Finance to De-Suung

10. 3 Sept 2024

    Department of Law and Order and the Royal Monetary Authority freeze 77 accounts linked to online gambling

11. 6 Aug 2025

    Authorities flag 23 TikTok accounts and freeze 26 bank accounts over social media gambling

12. 25 Dec 2025

    National Council does not adopt the Penal Code (Amendment) Bill of Bhutan 2025

13. 1 Jan 2026

    Income Tax Act 2025 in force with a 20% final withholding on lottery, betting and gambling winnings

The Penal Code (Amendment) Bill of Bhutan 2025 fell in the National Council on 25 December 2025 and can be reintroduced as a new bill after a year, so the proposal for longer gambling prison terms may return. Bhutan Lottery Limited plans an online platform for paper ticket sales in 2026 and more payment options for its e-lottery. The Gelephu Mindfulness City Authority can make its own laws, including on crime, but none of the laws it lists as applying in the city deals with gambling, so Bhutanese law applies there.

Is online gambling legal in Bhutan?

No. Betting or wagering through any ICT facility or service is an offence under s. 429 of the Information, Communications and Media Act 2018, on top of the general gambling offence in s. 393 of the Penal Code. The only exemption is for betting, wagering or gaming owned by the State (s. 430).

Can a foreign operator get a licence to serve Bhutanese players?

No. Bhutan has no gambling regulator or licensing regime, the ICM Act offence covers internet service providers involved in betting, and it applies to offences committed outside Bhutan that involve a computer system in Bhutan.

Who runs the lottery in Bhutan?

Bhutan Lottery Limited, a state-owned company launched under the Ministry of Finance in 2016 and owned by the De-Suung Skilling Program since 19 October 2023. It sells paper lotteries, scratch cards and, since May 2021, online lottery games; it sells only to buyers above 18 years of age. An authorised lottery is not gambling under Penal Code s. 395.

What are the penalties for gambling?

Gambling is a petty misdemeanour carrying one month to less than one year in prison, rising to a misdemeanour of one year to less than three years on a repeat conviction. For online gambling a court may add a fine. In at least one reported case, in Thimphu in 2020, the court allowed convicted gamblers to pay money in lieu of prison.

How are gambling and lottery winnings taxed?

From 1 January 2026 winnings from lotteries, betting or gambling are subject to a 20% final withholding tax under the Income Tax Act 2025, with winnings up to Nu 5,000 per winning exempt. Before 2026 lottery winnings of Nu 5,000 or more per ticket were taxed at 20% at source.

Does the Gelephu Mindfulness City allow casinos?

No gambling or gaming law is among the laws listed as applying in the Gelephu Mindfulness City, and its Application of Laws Act keeps Bhutanese law in force for matters those laws do not cover, so the Penal Code and ICM Act prohibitions apply there.

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1. Penal Code of Bhutan 2004, ss. 3, 13, 15, 393 to 395 (in force 11 August 2004)

   Judiciary of Bhutan, Supreme Court (judiciary.gov.bt, Acts and Rules)

   Tier 1Accessed 24 Sept 2026Published 11 Aug 2004
2. Penal Code (Amendment) Act of Bhutan 2011 (in force 5 July 2011)

   National Assembly of Bhutan (nab.gov.bt)

   The National Assembly host and the Office of the Attorney General host did not serve the file at review on 2026-09-24; the text was read from the archived copy of the National Assembly PDF. The Act amends ss. 3(d), 14, 18 and other sections but not ss. 393 to 395.

   Archived copy

   Tier 1Accessed 24 Sept 2026Published 5 Jul 2011
3. Penal Code (Amendment) Act of Bhutan 2021 (in force 17 February 2021)

   Office of the Attorney General, Bhutan (oag.gov.bt)

   The Office of the Attorney General host timed out at review on 2026-09-24; the bilingual text was read from the archived copy of the official PDF. The Act does not amend ss. 393 to 395.

   Archived copy

   Tier 1Accessed 24 Sept 2026Published 17 Feb 2021
4. Information, Communications and Media Act of Bhutan 2018, ss. 2, 4, 6, 7, 85, 429 and 430

   Bhutan InfoComm and Media Authority (bicma.gov.bt)

   Tier 1Accessed 24 Sept 2026Published 8 Jan 2018
5. Bhutan Information, Communications and Media Act 2006 (in force 5 July 2006), s. 180 Prohibition of online gambling (repealed)

   Judiciary of Bhutan, Supreme Court (judiciary.gov.bt, Acts and Rules)

   Repealed by s. 6 of the Information, Communications and Media Act of Bhutan 2018.

   Tier 1Accessed 24 Sept 2026Published 5 Jul 2006
6. Rules and Regulations on Content 2019 (third edition, in force 1 July 2019), para. 2.4.6

   Bhutan InfoComm and Media Authority (bicma.gov.bt)

   Tier 1Accessed 24 Sept 2026Published 1 Jul 2019
7. Code of Ethics for Journalists 2025 (in force 1 April 2025), s. 7(6)

   Bhutan InfoComm and Media Authority (bicma.gov.bt)

   Tier 1Accessed 24 Sept 2026Published 1 Apr 2025
8. Income Tax Act of Bhutan 2025 (in force 1 January 2026), ss. 2, 34, 243, 266 and 280, Schedule 1 paras 4 and 7, Schedule 3 para. 11

   Ministry of Finance, Royal Government of Bhutan (mof.gov.bt)

   Tier 1Accessed 24 Sept 2026Published 1 Jan 2026
9. Income Tax Act of the Kingdom of Bhutan 2001, fourth edition, Part IV Chapter 1 Taxes on lottery winnings (inserted by the Income Tax (Amendment) Act of Bhutan 2020; repealed from 1 January 2026)

   Ministry of Finance, Royal Government of Bhutan (mof.gov.bt)

   Superseded from 1 January 2026 by the Income Tax Act of Bhutan 2025, which keeps the Repealed Act in force for earlier periods (ss. 4 and 5).

   Tier 1Accessed 24 Sept 2026
10. Goods and Services Tax Act of Bhutan 2020, ss. 130 to 134 (lottery supplies) and definitions of lottery event and lottery supply

    Ministry of Finance, Royal Government of Bhutan (mof.gov.bt)

    Tier 1Accessed 24 Sept 2026Published 16 Jan 2020
11. Goods and Services Tax (Amendment) Act of Bhutan 2025 (in force 1 January 2026), ss. 5, 6 and 67 (5% GST rate)

    Ministry of Finance, Royal Government of Bhutan (mof.gov.bt)

    Tier 1Accessed 24 Sept 2026Published 1 Jan 2026
12. Anti-Money Laundering and Countering of Financing of Terrorism Act of Bhutan 2018, s. 187(7) definition of designated non-financial business or profession

    Royal Monetary Authority of Bhutan (rma.org.bt)

    Section 185 makes the Dzongkha text authoritative in case of any conflict with the English text.

    Tier 1Accessed 24 Sept 2026Published 8 Jan 2018
13. Gelephu Mindfulness City Application of Laws Act 2024 (Law No. 1 of 2024), as amended by Law No. 7 of 2025 and Law No. 7 of 2026, ss. 6 and 7

    Gelephu Mindfulness City Authority (gmc.bt)

    The consolidated text shows Schedule A items deleted by the 2025 and 2026 amendments. Commencement is by notification; the schedules apply from 26 December 2024.

    Tier 1Accessed 24 Sept 2026
14. Legislation: laws that apply in Gelephu Mindfulness City

    Gelephu Mindfulness City Authority (gmc.bt)

    Tier 1Accessed 24 Sept 2026
15. Launching of Royal Bhutan Lottery Limited (RBLL) (08-Apr-2016)

    Ministry of Finance, Royal Government of Bhutan (mof.gov.bt)

    Tier 2Accessed 24 Sept 2026Published 8 Apr 2016
16. Company Profile, Bhutan Lottery Limited

    Bhutan Lottery Limited, state-owned lottery operator (bll.bt)

    Tier 2Accessed 24 Sept 2026
17. Frequently Asked Questions, Bhutan Lottery Limited

    Bhutan Lottery Limited, state-owned lottery operator (bll.bt)

    Tier 2Accessed 24 Sept 2026
18. Bhutan Lottery Limited Annual Report 2025 (Directors' Report and financial highlights for the year ended 31 December 2025)

    Bhutan Lottery Limited, state-owned lottery operator (bll.bt)

    Company report of the state-owned operator, with statements audited by a firm appointed by the Royal Audit Authority. It is not a regulator, tax authority or statistics office publication, so its figures are reported in the text of this record and not as market data.

    Tier 2Accessed 24 Sept 2026
19. Lottery business restarted to meet trade deficit: finance minister

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 8 Apr 2016
20. First paper lottery scheme hits domestic market

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 3 Nov 2016
21. Lottery business is not gambling: Home Minister

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 23 May 2017
22. Five men sentenced in Wangdue Phodrang for Gambling

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 7 May 2020
23. Online lottery business is illegal, DLO

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 18 May 2020
24. Four men sentenced for gambling in Thimphu

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 29 May 2020
25. Police to track down organisers of online gambling

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 15 Feb 2021
26. Gambling house raided in Thimphu, three arrested

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 7 Aug 2023
27. Department of Law and Order and RMA freeze bank accounts linked to online gambling activities

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 3 Sept 2024
28. Authorities link 23 TikTok accounts to online shopping-based gambling, freeze 26 other bank accounts

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 6 Aug 2025
29. Penal Code (Amendment) Bill of Bhutan 2025 falls short of votes in National Council

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 25 Dec 2025
30. Telegram lottery scam under investigation

    Bhutan Broadcasting Service Corporation Ltd (BBS), state-owned public broadcaster (bbs.bt)

    Tier 2Accessed 24 Sept 2026Published 17 Apr 2026