Ensuring Responsible Growth: India’s Online Gaming Bill

Policy Update
Arushi Jain

1. Background:

India’s online gaming industry has witnessed remarkable growth over the past decade. Emerging as one of the fastest-expanding sectors within the digital economy, the market is projected to surpass a billion by 2027, engaging a player base of over 450 million. The sector is one of the fastest-growing in the digital economy. The development of affordable smartphones, a tremendous decline in data prices, and a young tech-conscious segment of consumers ensured that online sites, from e-sports to fantasy cricket, had a distinct chance to become embedded in the nation’s social fabric.

Despite this growth, concerns remain regarding aspects of online platforms. The absence of a comprehensive regulatory framework resulted in online gaming platforms potentially operating in a regulatory grey area. Growing concerns about addiction, loss of money, the number of minors playing games, and potential money laundering cases were all issues requiring the attention of authorities. Confusing state bans, inconsistent court decisions, and dependence on predatory gambling acts like the Public Gambling Act 1867, contributed to the overall confusion in the sector.

With the Union Government stepping in, an overarching framework, the Promotion and Regulation of Online Gaming Act, 2025, was enacted on August 21, 2025. The new law is not simply a ban—it carefully sets out to reboot the online gaming economy in India. It offers a regulated, clear, and safer future for consumers with the potential to curtail its worst excesses.

2. Key Provisions of the Bill:

The 2025 Act brings in wide-ranging reforms that seek to increase transparency, safeguard users, and stabilise the industry.

Ban on Real-Money Games: All online games that offer financial or similar rewards, whether skill-based or based on chance, are prohibited hereunder. Offenders can face imprisonment for up to three years or fines of ₹1 crore.

Creation of a Central Regulator: There will be a National Online Gaming Commission (NOGC) that will classify games, grant licenses, and oversee compliance throughout the country. This fills a recurring gap and replaces haphazard state-level regulation.

Game Categorisation: the online gaming industry is categorised into three different sectors: E-sports (acknowledged as competitive skill-based games), Online social games (treated as part of daily recreation and are safe), and Online Money Games (Money games of any structure have been banned entirely).

Player Protection Requirements: Sites are required to implement age checks, parental limits, self-exclusion tools, deposit caps, and redress. Advertising is strictly controlled, with provisions to outrightly ban advertising aimed at children.

Financial Protections: Operators are required to keep user money separated, ensure transparency of transactions, and comply with anti-money laundering regulations. Indirect promotion of real-money gambling is criminalized.

Collectively, these measures not only fill gaps in regulation but also provide a framework to legitimize safe gaming types and definitively prohibit exploitative types.

3. Early Effects and a Path Forward:

Although it is in a nascent stage, the law has transformed India’s gaming landscape. The government has been prompt in making strides towards implementing the National Online Gaming Commission, and has informed the High Court that rules will soon be drafted. To avoid contradictions, the Centre has petitioned the Supreme Court to consolidate all cases challenging the law. Most of these objections revolve around the question of whether banning fantasy sports restricts constitutional freedoms relating to trade and occupation.

The reaction has varied from chaotic to crippling for the industry sector. Leading fantasy sports companies, such as Dream11, suffered instant setbacks and lost their sponsorship deals for cricket. In a similar vein, the Mobile Premier League (MPL) announced in the open that it had laid off about 60% of its employees, claiming the ban had destroyed their business plan. Nowadays, smaller start-ups that rely on real-money gaming are making a valiant effort to switch to e-sports or educational goods.

At the same time, there are signals of positive engagement. The Union IT Minister consulted gaming companies shortly after the ratification of the Act, promising to engage with the secto rduring the transition. The government has signalled its intent not to draw a closure, but rather a pivot, to allow responsible innovation while protecting online gamers from the most harmful effects.

4. Impact of the Law:

The importance of this law underscores India’s commitment and long-term objectives of establishing a responsible digital economy:

Safeguarding Citizens: A complete ban on money-based games will target the alarming incidence of addiction, debt, and mental health challenges exhibited by youth who become gaming addicts. It will treat online gaming as an outreach to public health issues.

Stimulating Innovation: The recognition of e-sports and educational gaming will establish a path for start-ups to innovate in frameworks, be it gamified learning, using gaming-based apps to improve fitness, or India’s fast-growing e-sports tournaments.

Building Confidence: Regulation legitimises gaming. The Act creates a framework for transparency, grievance mechanisms, and protections for users, providing the public basis for developing confidence in gaming platforms.

Collaborating with Global Practice: The development of jurisdictions in countries such as the UK and South Korea is evidence of the growing global regulatory structure for online gaming. India is now joining the ranks of these countries, projecting India as both a market leader and also a responsible regulator.

5. Navigating the Challenges Ahead:

Despite its achievements, the law must overcome several hurdles to succeed:

Economic Fallout: The sudden prohibition of online money games has resulted in job losses and investor interest from the sector. Failure to implement a phased adaptation will result in long-lasting damage to the industry.

Legal Complexities: Indian courts have traditionally considered fantasy sports to be statutes as “games of skill” as opposed to “gambling”. This triggers a constitutional question for the courts as to whether an outright ban is contrary to the rights of entrepreneurs set out in Article 19(1)(g).

Enforcement Barriers: Many of the real-money apps that are based offshore still exist and are accessible to customers in India. Effective blocking and continuous vigilance of financial systems to prevent fraud will be necessary.

6. Conclusion:

The Online Gaming Regulation Act 2025 is India’s chance to regulate and take precautionary measures in a sector that grew without controls or structures. The immediate turbulence associated with this broken system will not disappear quickly. But with active policy experimentations, the law, in time, can transition the crisis into an opportunity.

The navigation of the compliance responsibilities should be phased to provide the gaming companies time to work with their business model. With the support offered to promote e-sports, educational games, and gamified-learning, the government can direct entrepreneurial ambition toward safer models. Strengthening digital policing against extraterritorial operations and raising public awareness around responsible gaming at schools and colleges will assist in mitigating addiction risks and normalising responsible gaming.

Ultimately, the government needs a research-based approach to adaptive regulation of gaming. The regulatory framework for gaming in India should be operational in a space of technological change, and constant innovation in gaming. The effective rollout of the new law can transform the journey of online gaming from one of negativity to one of safety, entertainment, innovation and growth. To this end, India can protect its citizenry whilst positioning itself as a leader in the governance of a new global digital economy.

References:

Economic Times. (2025, August 30). Govt to frame rules, set up authority under Online Gaming Act soon: Centre tells Delhi HC. The Economic Times. https://economictimes.indiatimes.com/tech/technology/govt-to-frame-rules-set-up-authority-under-online-gaming-act-soon-centre-tells-delhi-hc/articleshow/123659713.cms

Economic Times. (2025, August 31). Union Minister Vaishnaw discusses user money protection, promotion of e-sports, social games with gaming companies. The Economic Times. https://economictimes.indiatimes.com/tech/technology/union-minister-vaishnaw-discusses-user-money-protection-promotion-of-esports-social-games-with-gaming-companies/articleshow/123636727.cms

Mondaq. (2025, August 26). Decoding the Promotion and Regulation of Online Gaming Act, 2025. Mondaq. https://www.mondaq.com/india/gaming/1670760/decoding-the-promotion-and-regulation-of-online-gaming-act-2025

Press Information Bureau. (2025, August 21). Promotion and Regulation of Online Gaming Act, 2025. Government of India. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/aug/doc2025821618101.pdf

Reuters. (2025, August 21). India passes bill banning money-based online games, app shutdowns loom. Reuters. https://www.reuters.com/world/india/india-passes-bill-banning-money-based-online-games-app-shutdowns-loom-2025-08-21

Reuters. (2025, August 28). India faces first legal challenge against online money games ban. Reuters. https://www.reuters.com/world/india/india-faces-first-legal-challenge-against-online-money-games-ban-2025-08-28

About The Contributor:

Arushi Jain is a Research Intern at the Impact and Policy Research Institute (IMPRI) and is in the final year of her Master’s degree in International Studies from Symbiosis School of International Studies, Pune. Her interest lies in analysing the domestic and foreign policies of countries globally.