The Lok Sabha has passed the Promotion and Regulation of Online Gaming Bill, 2025, in a dramatic reversal of earlier industry-friendly policies. The law proposes sweeping bans, heavy fines, and even jail terms for operators and promoters, citing threats ranging from money laundering to national security risks.
A Sudden Crackdown on a Booming Industry
The legislation establishes a sweeping legal framework to regulate online gaming in India, effectively outlawing real-money gaming platforms such as Dream11, Winzo, and MPL.
The Bill calls for blanket prohibitions on online money games, multi-crore fines, and potential prison sentences for both platform operators and their celebrity promoters. Social media influencers endorsing such games face penalties of up to ₹50 lakh and two years in jail. Banks and financial institutions, too, are barred from processing payments linked to these platforms.
The government’s rationale is twofold: to counter mounting national security concerns and to address the socio-economic harm of gambling-like digital games. The Home Ministry is understood to have pushed strongly for the legislation, warning that online gaming platforms have become conduits for money laundering, tax evasion, and, in some cases, terror financing through the use of digital wallets and cryptocurrencies.
From Skill vs. Chance to a Blanket Ban
Until now, India’s courts had maintained a legal distinction between “games of skill” such as rummy and fantasy sports, and “games of chance” such as casino-style betting. That distinction is now erased. The new law applies uniformly to all money-based online games, eliminating the shield RMG platforms had secured through multiple court rulings.
The government instead seeks to promote e-sports and game development. Competitive e-sports are to be recognized as legitimate sports, while “online social games” may charge subscription or access fees so long as they avoid wagers or stakes.
National Security and Social Harms at the Core
Officials described the Bill as a necessary intervention in the face of what they call an unchecked proliferation of online money games. “These platforms are no longer just entertainment they have become pipelines for unlawful activities,” a senior government official said, pointing to the use of manipulative algorithms, bots, and addictive design features that disproportionately impact youth and lower-income groups.
The law explicitly links the expansion of real-money gaming to financial fraud, offshore fund transfers, and national security vulnerabilities. It empowers authorised officials to conduct warrantless searches of both physical and digital premises including mobile devices, servers, and cloud storage to detect violations.
The legislation also addresses public health concerns, citing evidence of compulsive gambling behaviour, rising debt among users, and widespread psychological harm. A government report warned of “serious social, financial, and psychological damage” caused by these platforms, with younger and economically vulnerable populations being the worst affected.
Enforcement Challenges Loom Large
Despite its sweeping prohibitions, experts say enforcing the ban will be fraught with obstacles. Past efforts to block gambling platforms under Section 69A of the IT Act saw limited success, as companies used tactics like:
Domain switching: Mirror websites frequently reappear under new addresses.
Mule bank accounts: Funds are routed through small vendors or unsuspecting individuals.
Cryptocurrency wallets: Payments are moved offshore via untraceable channels.
Influencer networks: Betting companies exploit micro-influencers or use celebrity likenesses without consent.
Direct communication: Users are guided via messages or calls to hidden URLs.
Since 2022, the IT Ministry has blocked over 1,500 betting websites and apps, yet platforms continue to evade restrictions. Analysts warn that legitimate users may be forced into unsafe alternatives, undermining the intent of the ban.
An Industry on the Brink of Collapse
The proposed framework is a sharp break from the government’s stance in 2023, when the IT Ministry had introduced pro-industry rules aimed at establishing self-regulatory bodies. Those rules failed to take off, mired in conflict-of-interest concerns and industry pushback.
Now, the industry faces a death blow. Valued at over ₹2 lakh crore and projected to reach $9 billion by 2029, India’s online gaming sector supports more than two lakh direct and indirect jobs and has attracted over ₹25,000 crore in foreign investment. Yet, with the combination of a 28 percent Goods and Services Tax (GST), potential increases to 40 percent, and now an outright ban on money games, the outlook is grim.
The Federation of Indian Fantasy Sports (FIFS), the All India Gaming Federation (AIGF), and the E-Gaming Federation (EGF) have jointly written to the Home Ministry, warning that the law will “strike a death knell” for a legitimate and tax-paying industry. They argue that the move risks pushing financial transactions underground and driving players to the dark web.
Opposition voices, including Congress MP Karti Chidambaram, have criticised the government for bypassing consultation and urged that the Bill be sent to a parliamentary committee for review. “This risks criminalising a sunrise industry and will drive innovation offshore,” Chidambaram warned.
Still, the government insists the trade-off is deliberate. Officials admit the ban could cost the exchequer up to ₹20,000 crore annually in lost GST, but argue that protecting public order and national security outweighs revenue considerations. In its place, the Bill carves out space to promote competitive e-sports and domestic game development, which it frames as the “future drivers of India’s digital entertainment economy.”
At a Glance:
- Operators: Up to 3 years in jail + ₹1 crore fine
- Promoters/Influencers: 2 years in jail + ₹50 lakh fine
- Banks/Financial Institutions: Barred from transactions with platforms
- Scope: Applies to all online money games, regardless of “skill” vs. “chance”
- Exemption: Competitive e-sports, game development, and educational/social gaming