On August 20, 2025, India’s lower house of parliament passed the Promotion and Regulation of Online Gaming Bill, 2025, introducing a comprehensive ban on real-money gaming across the nation. This legislation aims to prohibit all online games involving monetary stakes, regardless of whether they are based on skill or chance, and extends to banning their advertisement and associated financial transactions.
Legislative Intent and Provisions
The bill’s primary objective is to address societal concerns linked to real-money gaming, including reported incidents of financial distress and suicides attributed to gambling losses. IT Minister Ashwini Vaishnaw emphasized the government’s commitment to societal welfare, stating that the legislation seeks to eliminate a big evil infiltrating society.
Key provisions of the bill include:
– Financial Restrictions: Banks and financial institutions are prohibited from facilitating transactions related to real-money games.
– Penalties for Operators: Individuals or entities offering real-money games could face imprisonment of up to three years, fines up to ₹10 million (approximately $115,000), or both.
– Penalties for Promoters: Celebrities endorsing such games may be subject to imprisonment up to two years or fines up to ₹5 million (approximately $57,000).
Industry Response and Economic Implications
The real-money gaming sector, valued at approximately $23 billion, has expressed significant concern over the potential ramifications of the ban. Industry associations, including the Federation of Indian Fantasy Sports, All India Gaming Federation, and E-Gaming Federation, have appealed to Prime Minister Narendra Modi for intervention. They argue that the legislation could inadvertently benefit illegal offshore gambling operations while forcing compliant Indian businesses to shut down.
The industry bodies highlight that real-money gaming startups in India collectively have an enterprise valuation of ₹2 trillion (approximately $23 billion), generate revenues of ₹310 billion (around $3.6 billion), and contribute ₹200 billion (roughly $2.29 billion) annually in taxes. They project a 28% compound annual growth rate, potentially doubling the industry’s size by 2028. The blanket ban could result in the loss of over 200,000 jobs and the closure of more than 400 companies.
Publicly listed companies like Nazara Technologies have already felt the impact, with its share price dropping 12.84% to ₹1,220 (about $14) following the bill’s passage. Although Nazara clarified that it has no direct exposure to real-money gaming businesses, the market reaction underscores investor apprehension.
Divergent Views Within the Gaming Community
While the real-money gaming sector faces potential upheaval, segments of the gaming industry, particularly those involved in casual gaming and esports, have welcomed the legislation. Sumit Batheja, CEO and co-founder of Ginger Games, expressed support, noting that the decision allows businesses to focus on core concerns like monetization and retention without the need to differentiate themselves from real-money gaming platforms.
However, Akshat Rathee, co-founder and managing director of esports company NODWIN Gaming, emphasized the need for clear distinctions between esports, online gaming, social gaming, and real-money gaming. He warned that the absence of precise definitions could lead to confusion among regulators, players, and investors, potentially hindering the growth of the esports industry.
Historical Context and Regulatory Landscape
The ban is the latest in a series of regulatory measures targeting the online gaming industry in India. In 2023, the government imposed a 28% tax on online gaming to curb real-money play, prompting outcry from industry stakeholders who warned of significant financial losses and job cuts. Despite appeals from top investors, including Tiger Global and Peak XV Partners, the tax remained in place, with reports suggesting a potential increase to 40% under new rules.
Additionally, in 2023, the Indian government amended the Information Technology Rules to curb user harm from real-money games and proposed self-regulatory bodies to limit illegal betting and gambling. However, the self-regulation approach faltered due to conflicts among industry stakeholders over enforcement and standards.
Legal and Constitutional Considerations
Legal experts have raised concerns about the bill’s alignment with constitutional provisions. Meghna Bal, director of the Esya Centre, argued that the law might face litigation for failing the test of proportionality under Article 19(1)(g) of the Indian Constitution, which guarantees citizens the right to practice any profession or carry on any occupation, trade, or business. She cautioned that the legislation could dismantle compliant onshore companies while inadvertently opening the door wider for illegal offshore betting platforms.
Conclusion
India’s decision to ban real-money gaming marks a significant shift in the regulatory landscape of the country’s online gaming industry. While the government aims to address societal concerns and protect consumers, the move has sparked intense debate about its economic impact, potential legal challenges, and the future of gaming in India. As the bill awaits approval from the upper house and the president to become law, stakeholders across the industry continue to advocate for a balanced approach that safeguards both societal welfare and economic growth.
