The Indian government has introduced the Promotion and Regulation of Online Gaming Bill 2025 in the Lok Sabha, seeking to prohibit all forms of real-money gaming while promoting eSports and social gaming. According to official estimates, nearly 45 crore Indians lose close to ₹20,000 crore annually through real-money gaming platforms. A government source explained that the losses are not only financial but social, leading to addiction, debt, and exploitation. By introducing the bill, the government has signaled its willingness to sacrifice tax revenues—estimated at over ₹20,000 crore each year—in favor of public welfare.
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The bill makes a clear distinction between recreational gaming and gambling. It promotes eSports and online social games, while outlawing any form of money-based play, which officials argue has become a “major problem for society.” Those caught offering real-money platforms could face up to three years of imprisonment or fines as high as ₹1 crore.
Strong Penalties, State Enforcement, and Victim Protection
The proposed legislation places the burden of enforcement on state governments but outlines severe penalties for violators. Operators providing illegal money-gaming services could face multi-year jail terms or hefty financial penalties. Even advertising such platforms may invite punishment of up to two years in prison or fines of ₹50 lakh.
However, the bill exempts players themselves from punishment, framing them as victims rather than perpetrators. The focus is instead on operators, advertisers, and financial intermediaries enabling the ecosystem.
Industry Bodies Warn of “Death Knell” for Sector
Industry groups including the All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) have issued a joint letter urging Home Minister Amit Shah to intervene.
They argue that the blanket prohibition threatens a legitimate industry valued at over ₹2 lakh crore, with an annual revenue of ₹31,000 crore. The industry currently supports more than two lakh jobs and has attracted over ₹25,000 crore in foreign investment by mid-2022.
Federations warn that banning regulated Indian platforms would push millions of players into the hands of illegal offshore operators, gambling syndicates, and matka networks, where there are no consumer protections, taxation, or accountability.
Shell Companies and KYC Lapses
At the heart of the crisis are lax compliance checks. Platforms allowed users to deposit and withdraw vast sums without mandatory KYC norms. Many operated through layers of offshore shell companies, making it nearly impossible to trace the original source of funds.
The absence of oversight created a parallel shadow economy where untaxed income and unaccounted investments could be parked with ease.
Money Laundering and Tax Evasion
Authorities now believe these betting apps were not merely entertainment hubs but sophisticated money-laundering machines. By cycling illicit funds through multiple accounts and jurisdictions, operators successfully masked the origins of black money.
Meanwhile, tax agencies are uncovering massive revenue leakages. Unreported income routed through these apps deprived the exchequer of thousands of crores in GST and direct taxes.
A Battle Between Welfare and Growth
While the government frames the legislation as a matter of societal protection, the industry casts it as an existential threat to one of India’s fastest-growing sectors. Online gamers have surged from 36 crore in 2020 to over 50 crore by 2024, with the sector projected to grow at a 20 percent annual rate, doubling by 2028.
Officials maintain that the bill is a corrective measure after years of complaints from citizens about gambling addiction and mounting losses. Industry leaders counter that regulation, not prohibition, is the solution.
For now, the proposed legislation represents a turning point—one that could either reshape the online gaming economy into a safer, more transparent system or cripple an emerging digital industry by driving it underground.