Recently, the Union Cabinet has approved new ONLINE GAMING LAWS, which will be tabled in the Parliament shortly. Citing psychological and financial harm that can be caused by such games, the Promotion and Regulation of Online Gaming Bill 2025 says that no person “shall offer, aid, abet, induce or otherwise indulge or engaged in” the offering of online money games and such services. If passed in Parliament, the move should strike a heavy blow to an industry that has attracted billions of dollars of foreign investment.
The proposed law would impose a blanket ban on all online ‘real-money-gaming–services”, where users can play games after depositing money in the form of a stake or wager. The move is owing to growing concerns about alleged money laundering through these services. “ The immersive and addictive nature of online games, particularly with monetary incentives, has led to significant mental health issues among users-especially children, adolescents and young adults”.
Endorsements by celebrities from cricket, Bollywood and other marketing efforts have boosted the appeal and investor interest of real money gaming apps. The government will prohibit any person from online real-money games and failing to comply will result in a prison term up to three years and penalty of Rs 1 Cr.
Key Features of the Proposed Law
1 Definition of Online Games
- The law seeks to differentiate between games of skills (permitted) and games of chance (closer to gambling, likely to be prohibited)
- Any real-money game that is not purely chance-based will need approval being offered in India.
2 Ban on Wagering and Betting
- Any online game involving betting on outcome of games including fantasy sports will not permitted.
- Only those games certified vy Self Regulatory Body (SRB) as safe, skill based, and non addictive can be legally offered.
3 Penalties for Nob-Compliance
- Non-registered or illegal platforms could face heavy fines, criminal liability.
Online market leaders like dream 11, Games 24X7, Winzo, Gameskraft, 99 Games, Khelofantasy, and My11Circle are now staring at an existential crisis. India’s online gaming market is currently valued at $3.7 billion and was projected to more than double to $9.1 billion by 2029. Nearly 86% of today’s revenue comes from real-money formats. Wipe that out, and the financial lifeline of the industry disappears overnight.
The All India Gaming Federation (AIGF) has warned that a blanket prohibition could inflict severe damage on this sector. According to AIGF, passing the bill in its current format could push crores of legitimate gamers towards illegal gambling networks and unregulated operators.
According to government sources, this draft legislation leaves little room for ambiguity. It proposes a blanket ban on all real-money gaming transactions, regardless of whether the underlying game involves skill or chance, which is crucial departure from previous regulatory interpretation.
Banks and payment gateways will be prohibited from processing any payments linked to these platforms, effective cutting off the financial artery that sustains the business. Advertising such games will also be illegal. Players will still be able to access free-to-play or subscription-based games, where users pay a fixed fee but can not wager during gameplay. However , anything involving money stakes will be prohibited.
However the bill does not address taxation, particularly GST, where disputes on rate and valuation remain pending with the Supreme Court.
The Bhartiya Nyaya Sanhita (BNS), amended in 2023, criminalized unauthorized betting with penalties of up to 7 years in prison. Authorities have blocked over 1400 illegal betting and gambling sites since 2022. This bill, however signals a decisive shift from tax-and-regulate to prohibit-and-enforce. For gaming firms that built their fortunes on real-money formats, the writing on the wall seems to be pretty clear.
As per the gaming industry sources, the government’s approach is misguided and could end up doing more harm than good. The prohibition would only strengthen illegal offshore operators, which can one of the biggest national security threat.With over 45 crore Indians playing online games, many responsibly engaging in skill-based formats.
The economic cost-the sector currently valued at $25 billion, generates $3.5 billion in revenue and contributes over Rs 25,000 Cr annually in taxes. It supports at least one lakh direct and indirect jobs across engineering, animation, game design, and content creation.
The industry message seems to be clear, prohibition is not the answer. What India needs is regulation, not a ban. A smart progressive framework that distinguishes games of skill from chance, ensures safety and grievance redressal, and secures tax revenue.
There may be one more problem, as Gambling is a State law, all the State governments will have to approve this law in their respective State assemblies.
But the real problem is with the betting apps which allow you to bet on the outcome of the game, addictive games of online Rummy, Poker etc. These games are highly advertised by celebrities and people get hooked to these games.
Waiting for your views on this blog.
Anil Malik
Mumbai, India
20th August 2025