The Promotion and Regulations of Online Gaming in India (as of August 2025)

Introduction

India’s online gaming sector has seen rapid expansion, with over 568 million users making the country the largest gaming market globally by 2024. The industry’s explosive growth, especially in real-money gaming (RMG), raised major concerns about financial risks, addiction, and money laundering, leading to regulatory scrutiny and decisive legislative action.

Historical Background of Online Gaming

Online gaming evolved from regulated games of skill and chance under legacy laws like the Public Gambling Act, 1867, and the Information Technology Act, 2000. A distinction was generally made between games based on skill (e.g., Rummy, Poker) and pure chance, with only the latter considered gambling and banned by most state laws. The last decade’s rise in smartphone and affordable internet access fueled a surge, attracting foreign investment and creating a multi-billion-dollar industry.

Gaming Laws in India

• Pre-Prohibition laws: The Public Gambling Act, 1867, the IT Act, 2000, and state laws governed gaming, often leading to ambiguity and inconsistent enforcement.

  
  

• State-level amendments sometimes banned certain online games. However, most bans were overturned by courts for failing to distinguish games of skill from pure gambling.

  
  

• The 2025 Bill introduced a National Authority to oversee, coordinate, and regulate the sector at a uniform national level, consolidating fragmented regulations.

  
  

Impact of Online Gaming in India Before This Bill

The online gaming industry in India contributed significantly to the economy through job creation, technological innovation, and export earnings. Real money games formed about 85% of industry revenue in 2024, but concerns grew over addiction, impulsive spending, financial distress, and mental health issues.

Tamil Nadu alone reported 47 suicides linked to online gaming addiction between 2019 and 2024. Authorities brought to light involvement of some platforms in money laundering and terror financing.

Why the Need for This Law?

The bill was driven by:

• Rising cases of addiction and suicide attributed to manipulative game designs.

• Ongoing financial fraud, tax evasion, and use of online gaming for illegal fund transfers and terrorism.

• Lack of comprehensive, uniform regulations—existing laws were outdated and inconsistent.

• Protecting vulnerable populations, ensuring public order and fiscal integrity, and preserving national security.

  
  

Key Provisions of the Promotion and Regulation of Online Gaming Bill, 2025

Total ban on real-money online gaming: All platforms offering, facilitating, or advertising real-money games are prohibited, regardless of whether the games are skill-based or chance-based.

Creation of a National Authority: Charged with sector oversight, strategic development, policy coordination, and regulatory implementation for gaming, e-sports, and educational games.

Criminalization and Penalties:

• Platform operators face up to three years imprisonment and fines up to ₹1 crore.

• Social media influencers and celebrities endorsing such platforms risk two years imprisonment and fines up to ₹50 lakh.

• Financial institutions involved in related transactions can be penalized equivalently.

• Search & Seizure Powers: Authorities granted warrants for both physical and digital searches, raising concerns about privacy and civil liberties.

• Exemptions & Focus Areas: Promotion and regulation of e-sports, educational, and social games, which are not covered by the ban. The aim is sector innovation under clear oversight.

Impact of the New Law

• Industry: Sudden ban threatens massive job losses in fantasy gaming and real-money segments, as many companies face closure and foreign investors reconsider India’s market.

• Sports Sponsorship: Uncertainty for teams and tournaments that depended on sponsorships from fantasy gaming firms.

• Legal Recourse: Companies are exploring Supreme Court challenges, citing lack of adequate consultation and loss of legitimate business.

• Society: Intended to curb addiction, gambling-related suicides, financial distress, and fraudulent activities.

• Technology & Innovation: While the bill promotes e-sports and educational gaming, it signals a shift from gambling-based models to regulated, skill-based digital entertainment.

Conclusion

India’s new online gaming framework marks a historic policy pivot—prioritizing public welfare, national security, and responsible digital consumption over sectoral profiteering. While the sweeping ban will disrupt a major revenue stream and alter industry dynamics, it represents an effort to tackle addiction, financial crime, and societal harm. The coming years will reveal whether innovation and positive social impact in e-sports and educational gaming can compensate for the shock delivered to the real-money gaming sector.