By Vikrant Rana and Apalka Bareja
Introduction
In the wake of digitization and technology, India’s online gaming sector has paved its way surpassing other digital sectors by contributing to the economy, employment generation and promotion of innovation. With the online gaming sector emerging as a powerhouse, penetrating its way beyond the metropolitan areas i.e., Tier 2 and Tier 3 cities, the lack of a coherent and enabling legal framework has hindered the sector’s structured development and the promotion of responsible gaming practices.[1] Despite having an unstructured regulatory legal framework, the Indian online gaming sector consists of the second largest gaming community comprising of 442 million gamers[2]with a projection to experience 20% of growth by FY2025, reaching INR 231 billion[3] and has been reported to raise USD 2.8 billion from domestic and global investors over the last five (5) years.[4] With stakes involved so high and the gaming industry unfolding at the speed of flash, the unchecked expansion of online gaming has led to unlawful activities thereby posing threat to national security, public order and integrity of the country[5] significantly increasing these challenges. In light of the aforementioned challenges and contribution of the gaming sector in the Vikisit Bharat vision, a bill titled “The Promotion and Regulation of Online Gaming Bill, 2025[6]” has been passed by Lok Sabha on August 20,2025 and by the Rajya Sabha on August 21,2025 now awaiting the assent of the President. The bill introduces strong reforms to regulate the online gaming sector imposing a ban on real money games, its advertisements and at the same time promoting e-sports, educational games and social gaming as safe and constructive alternatives.
Rationale to Introduce the Bill
In taking this step, the government is not merely acting in response to technological advancement but also fulfilling its constitutional and moral duty. The Statement of object and reasons of the bills primarily highlights the following concerns:
- Protection of citizens
The bill aims to curb the increase in addiction, financial ruin and psychological harm caused by online money gaming. The World Health Organization classifies gamingdisorder as a health condition in its International Classification of Diseases, describing it as a pattern of play marked by loss of control, neglect of other daily activities, and persistence despite harmful consequences[7]. Moreover, These games have led to loss of savings, debt, and even suicides, especially among youth and middle-class families[8]. - Financial Fraud and National Security RisksOnline money gaming platforms have reportedly been misused for fraud, money laundering, and even terror financing[9]. A recent report of The Financial Action Task Force (FATF) titled “Comprehensive Update on Terrorist Financing Risks” suggests how online video games and gaming platforms were increasingly being used by terrorists and extremists to disseminate propaganda, recruit members, incite, and engage in radicalization activities, and sometimes fundraising[10].
The steps of the government in light of the aforementioned concerns come as a welcome step, this raises an important and complex question: in striving to do what is right, is there a possibility that the government may, in reality, be doing wrong? The bill embodies a sincere effort to protect citizens and uphold public interest but the real conundrum—a question older than law itself: Should governance follow the letter of the law, or its spirit?
Key Features of the Bill
- Applicability
The law once enforced will apply to:- Online money gaming service offered within the territory of India; or
- Operated outside the territory of India.
- Blanket ban on Real Money Online Games
- The bill provides a blanket ban on online money games irrespective of such game being based on skill or chance or both.
- Section 2(6) defines online money game as “an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports.”
It is pertinent to note that for decades the Indian courts have maintained a clear distinction between game of skill (legal) and game of chance (akin to gambling). The bill overrides this judicial distinction in the context of real-money gaming thereby invalidating existing legal protections previously granted by courts to platforms like fantasy sports apps (e.g., Dream11), rummy, and poker.
- Ban on Endorsement of Online Money GameThe bill strictly prohibits any person from making or advertising in any media that directly or indirectly promotes any person to play any online game or indulge in any activity promoting online money gaming. Until now, the promotion of real-money skill-based games such as fantasy sports, rummy, or online poker was permitted under a framework of self-regulation. Guidelines issued by the Advertising Standards Council of India (ASCI) and advisories from the Ministry of Information and Broadcasting (MIB) allowed such promotions, provided they included mandatory disclaimers, avoided depicting gaming as a source of income, and ensured that celebrities or influencers performed adequate due diligence. However, the new bill imposes a complete ban on advertising and promotion of real-money games, regardless of whether they involve skill or chance. This means that actors, influencers, and media platforms are now legally barred from endorsing or featuring these games in any form, including through surrogate advertising or brand partnerships. These frameworks will now need to be replaced or revised to align with the new legal reality.
- Establishment of Regulatory AuthorityThe bill mentions establishing a regulatory authority which shall primarily be responsible for:
- Classify and license different categories of online games
- Monitor and enforce compliance
- Act as a grievance redressal forum for players and developers
- Financial RestrictionAll financial institutions, banks or any other person are banned from facilitating any transaction involving online money gaming service.
- Company Accountability
- In case of any offence by a company, every person such as director, manager secretary or such other officer/employee who is responsible for the conduct of the company, has given consent to such activities will be held responsible and punished accordingly.
- Independent director or a non-executive director of a company that is not involved in actual decision making will not be held liable.
- Promotion of e-sportsThe bill defines e-sports as online game that is-
- played as part of multi-sports events;
- involves organised competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules;
- duly recognised under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3;
- has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players;
- may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and
- shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes
However, one of the most striking and arguably ironic aspects of the bill is section 3 which opens the bill by formally recognizing and promoting e-sports—just before the legislation moves on to impose a sweeping ban on real-money online games like fantasy sports, poker, and rummy. This placement creates a confusing and contradictory narrative.
- Heavy Penalties
Penalties Offering Real Money Games Imprisonment upto 3 years or fine upto INR 1 crore; or both Advertising or Promotion Imprisonment upto 2 years or fine upto INR 50 lakh; or both Authorization of Funds Imprisonment upto 3 years or fine upto INR 1 crore; or both Repeated Offence in case of offering Real Money Game and Authorization of Funds Imprisonment upto 5 years and fine upto INR 2 crore Repeated Offence in case of Advertising or Promotion Imprisonment upto 3 years and fine upto INR 1 crore
Impact
India is home to a massive gaming community, making it the second-largest globally after China. The burgeoning sector offers significant opportunities to attract Foreign Direct Investment (FDI), create jobs, and stimulate investments within the online gaming sector.
The IAMAI suggests that until 2021 the online gaming industry offered around 40,000 direct jobs. Further, the EY-FICCI report mentioned an increase of employee to 1 lakh in the year 2023. The report further suggests this number to go up to 250,000 by the year 2025[11].
It is reported that there are approximately around 100 million players who participate daily in online gaming, highlighting the sector’s deep penetration and regular engagement. Revenue-wise, over 90 million players contribute financially, and notably, 83% of the industry’s income comes from real-money gaming, underscoring its significance as a revenue driver.[12]
The landscape of online gaming providers has also seen substantial growth in the country. From just 30 companies in the year 2017, the number has exponentially increased to 250 in 2018, and approximately 1,584 in2024[13].
With the enforcement of the Bill the online gaming industry is likely to face a downfall thereby leading to closure of approximately 400 companies while also rendering the workforce of online money game companies jobless without any re-employment plan. This radical change is expected to create panic stir in the industry.
An expected outcome keeping into consideration the number of gamers in India is the surge for such gamers to use VPN and other modes to access online money gaming in other countries, potentially pushing a large population of Indian gaming users toward unsafe gambling environments. The effect of such shift is likely to leave the users in dark chasing the unknown.
Stakeholders such as All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) have raised concerns over the Bill stating the online skill gaming industry is a sunrise sector with an enterprise valuation of over Rs 2 lakh crore and annual revenue exceeding Rs 31,000 crore while also contributing over Rs 20,000 crore in direct and indirect taxes annually and is projected to grow at a 20 per cent compound annual growth rate (CAGR), doubling by 2028.[14]
In light of such projections and the possible economic boom that India is likely to experience from the gaming industry, the government may perhaps consider to adopt best practices of other countries such as those in the UK, US, and Australia that favor regulation and licensing over outright bans, incorporating strict KYC and advertising rules. It is pertinent to note that industry stakeholders are advocating for similar models in India to foster responsible growth, innovation, and monetization to prevent consumers from losing access to legal real-money gaming options, including skill-based games..
The Bill’s blanket ban on all online money games includes skill based online games. As the market of real-money gaming is huge, thus online games based on skills shall be considered to be promoted. In order to ensure the promotion of such skill based games in a structured manner, a Committee shall be set up with the purpose to provide guidelines clearly defining “skills” in the arena of online gaming sector and differentiate skill-based games from chance-based games or perhaps provide a non-exhaustive list of games that can be considered as skill based games.
What Companies Should Do?
- Immediately audit and modify their platforms to remove any form of real-money transactions.
- Rebrand and reposition offerings to fall under permissible categories like e-sports or educational/social games.
- Train senior management and directors on their responsibilities and legal liabilities under the new accountability provisions.
Conclusion
The Promotion and Regulation of Online Gaming Bill, 2025 marks a transformative step in shaping India’s digital future. In black and white, the Promotion and Regulation of Online Gaming Bill, 2025 seeks to ban what is harmful and protect what is valuable. But the world is not black and white. The gaming industry is a fast-evolving spectrum filled with creativity, employment, education, and expression.
While the blanket ban on real-money games presents short-term disruption, it also opens the door to a more transparent, safe, and innovative-driven gaming ecosystem. By recognizing e-sports and encouraging educational and social gaming, the Bill lays the groundwork for India to become a global hub for skill-based and responsible digital entertainment. The challenge now lies in striking a balance between regulation and growth, between protection and progress, ensuring that in the pursuit of doing right, the government does not inadvertently suppress the transformative potential of one of India’s most dynamic industries.
On the other hand, for companies willing to adapt, this is an opportunity to reimagine business models, tap into new markets, and align with the government’s vision. With the right regulatory support and industry collaboration, the Indian gaming sector can continue to thrive and come together stronger and form a more sustainable foundation.
[1] https://prsindia.org/files/bills_acts/bills_parliament/2025/Bill_Text-Online_Gaming_Bill_2025.pdf
[2] https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/ethical_gaming.pdf
[3] https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/ethical_gaming.pdf
[4] https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/ethical_gaming.pdf
[5] https://prsindia.org/files/bills_acts/bills_parliament/2025/Bill_Text-Online_Gaming_Bill_2025.pdf
[6] Bill No.110 of 2025
[12] EY-FICCI report March 2024
[14] https://www.dailypioneer.com/2025/page1/fantasy-giants-under-regulatory-fire.html