The Online Gaming Bill

Background

Now an Act of Parliament having received the requisite executive approval in August 2025, the Promotion and Regulation of Online Gaming Act 2025, represents a key development in regulating digital gaming in the country. Passing the Act of Parliament has quite the record, the Lok Sabha completing the task on August 20, 2025, in a mere 7 minutes, and the Rajya Sabha soon after. The Government upon notification of the Act on August 22, 2025, has established a framework for encouraging legitimate gaming and for the first time in the country, expunging the online money gaming from the country.

Applicability

The Online Gaming Act of 2025 walks the unprecedented line of legal authority by covering all aspects of the digital gaming network of India.

  • Implementation Across the Country: As an Act of Parliament, it adroitly legalizes the streamlined procedures of licensing, classification, and regulation of online gaming across India.
  • Applicable Beyond the Country’s Boundaries: Tackles the issue of foreign operators skirting the domestic regulations by applying to offshore platforms catering to Indian users.
  • Encompassing All Stakeholders: Gamers, platform operators, financial institutions, advertisers, and service providers.
  • Encompassing all Activities of Gaming: Covers e-sports and social games while prohibiting the harmful online money gaming services, advertisements, and associated financial transactions.

This legislative framework ensures no entity in the gaming ecosystem can escape regulatory oversight, establishing uniform standards nationwide.

Purpose of the Bill

The Act undertakes a dual-phased approach by ‘de-fending’ the citizens from malpractices while promoting the gaming industry. 

  • E-sports Recognition: e-sports has been included under competitive sports and provisions are being made to set up e-sports training and research centres. India’s goal is to strengthen it’s global e-sports presence through innovative policies under the National Sports Governance Act, 2025.
  • Social Gaming Development: Encourages the creation of socially and educational games that are safe, age-appropriate, and culturally relevant, to develop skills and digital literacy.
  • Innovation Catalyst: Develops technological innovation and homegrown gaming content that fuels the creative economy.
  • Global Hub Development: Develops India’s reputation as a responsible global online gaming centre for innovation driven growth.
  • Complete Ban on Money Games: Imposes a blanket ban on online money games, including betting, gambling, fantasy sports, poker, rummy, and the online money lottery to curb financial exploitation.
  • Youth and Vulnerable Protection: Bans the activities of predatory apps that target the youth and economically disadvantaged.
  • Family Protection: Shields families from the gambling and reckless gaming driven debt and psychological distress.
  • National Security: Deals with money laundering,

Important Definitions

The Act provides precise definitions forming the foundation of its regulatory framework as per Section 2:

  • Advertisement: shall have the meaning as assigned to it in the Consumer Protection Act, 2019;
  • Authority: means an Authority constituted under section 8;
  • E-sport: means an online game which—
    • is played as part of multi-sports events;
    • involves organised competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules;
    • is duly recognised under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3;
    • has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players;
    • may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and
    • shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes;
  • Internet: means the combination of computer facilities and electromagnetic transmission media, and related equipment and software, comprising the interconnected worldwide network of computer networks that transmits information based on a protocol for controlling such transmission;
  • Notification: means a notification published in the Official Gazette and the term “notify” shall be construed accordingly;
  • Online Game: means any game, which is played on an electronic or a digital device and is managed and operated as a software through the internet or any other kind of technology facilitating electronic communication;
  • Online Money Game: means an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports;
  • Online Money Gaming Service: means a service offered by a person for entering or playing the online money game;
  • Online Social Game: means an online game which—
    • does not involve staking of money or other stakes or participation with the expectation of winning by way of monetary gain in return of money or other stakes;
    • may allow access through payment of a subscription fee or one-time access fee, provided that such payment is not in the nature of a stake or wager;
    • is offered solely for entertainment, recreation or skill-development purposes; and
    • is not an online money game or e-sport;
  • Other Stakes: means anything recognised as equivalent or convertible to money and includes credits, coins, token or objects or any other similar thing, by whatever name called and whether it is real or virtual, which is purchased by paying money directly or by indirect means or as part of, or in relation to, an online game;
  • Person: includes—
    • an individual;
    • a Hindu undivided family;
    • a company;
    • a firm;
    • an association of persons or a body of individuals, whether incorporated or not;
    • the State; and
    • every artificial juristic person, not falling within any of the preceding sub-clauses;
  • Prescribed: means prescribed by rules made under this Act;
  • User: means any person who accesses or avails online game.

Compliance Requirements under the Bill

  • Prohibition on Offering Online Money Games (Section 5)

No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service.

  • Prohibition on Advertising Online Money Games (Section 6)

No person shall make, cause to be made, aid, abet, induce, or otherwise be involved in the making or causing to be made any advertisement, in any media including electronic means of communication, which directly or indirectly promotes or induces any person to play any online money game or indulge in any activity promoting online money gaming.

  • Prohibition on Financial Transactions for Online Money Games (Section 7)

No bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce or otherwise facilitate any transaction or authorisation of funds towards payment for any online money gaming service.

  • Compliance with Central Government Directions (Section 13)

Every person shall comply with any direction issued by the Central Government in relation to online money gaming services. 

Penalties and Punishments

The Act establishes one of the strictest penalty regimes globally for gaming violations, making offenses cognizable and non-bailable:

Offense

Section

Imprisonment

Fine

Offering Online Money Gaming Services

Section 9(1) vs Section 5

Up to 3 years

Up to ₹1 crore

Advertisement of Money Games

Section 9(2) vs Section 6

Up to 2 years

Up to ₹50 lakh

Financial Transaction Facilitation

Section 9(3) vs Section 7

Up to 3 years

Up to ₹1 crore

Repeat Offense – Gaming Services

Section 9(4)

3-5 years (mandatory minimum)

₹1-2 crore (mandatory minimum)

Repeat Offense – Advertisement

Section 9(5)

2-3 years (mandatory minimum)

₹50 lakh-1 crore (mandatory minimum)

Authority Non-compliance

Section 12(1)

Not specified

Up to ₹10 lakh

Additional Penalties:

  • Corporate Liability (Section 11): Directors and officers face personal criminal liability for company violations
  • Blocking Powers (Section 14): Government can block access to non-compliant gaming platforms under Section 69A of IT Act, 2000
  • Search and Seizure (Section 16): Authorized officers can enter and search any place (physical or digital) without warrant
  • Investigation Powers (Section 15): Central Government can authorize officers for investigation of offenses

Penalty under Information Technology

In case of failure to comply with the provisions of section 5, section 6 and section 7, notwithstanding anything contained in this Act or in section 69A of the Information Technology Act, 2000, any information generated, transmitted, received or hosted in any computer resource in relation to online money gaming service shall be liable to be blocked for access by the public in such manner as provided in that Act. 

Impact on the Indian Economy

India’s gaming industry is radically changed by the Act, which promises long-term sustainable growth while causing major short-term economic disruption.

Current Economic Obstacles:

  • Serious Industry Disruption: 86% of the gaming industry’s revenue model is impacted by the total prohibition of real money games, endangering the $3.7 billion industry valuation.
  • Employment Crisis: According to industry estimates, over 200,000 direct and indirect jobs could be lost, and over 400 gaming companies may decide to shut down.
  • Revenue Loss: The illegal online money gaming industry could cost the government between ₹15,000 and 20,000 crore in tax revenue. • Investment Decline: As investors reevaluate business models, venture capital and private equity funding in the gaming industry are predicted to drastically decline.

Market Restructuring:

  • Platform Exodus: Important platforms such as Dream11, MPL, and others may experience a market exit or fundamental changes to their business models.
  • Impact on the Startup Ecosystem: Under the strict regulatory framework, new gaming ventures face uncertainty about viable business models.
  • International Investment: Worldwide investors may reevaluate India as a gaming investment destination.

Long-Term Economic Change:

  • Legitimate Gaming Growth: Attention is now directed toward skill-based gaming, generating steady income via competitions, sponsorships, television rights, and global market expansion.
  • Educational Technology Integration: Including gaming in the classroom opens up new markets worth billions of dollars for the EdTech industry
  • Innovation Economy: Encourages the development of technical skills in game development, artificial intelligence, and user experience design, enhancing India’s standing in the global technology ecosystem.

Sectoral Benefits:

  • Financial System Integrity: Reducing money laundering risks estimated at thousands of crores, enhancing investor confidence and banking sector stability;
  • Consumer Protection: Lowering financial losses associated with gambling addiction, increasing household savings, and rerouting spending towards lawful economic endeavors
  • Regulatory Leadership: Establishes India as a world leader in the regulation of responsible gaming, with the potential to impact global norms and open up export markets for regulatory technology.

Impact on the Region:

While cities like Bangalore, Mumbai, and Hyderabad need to adjust to shifting employment trends, technology hubs like Karnataka, Maharashtra, and Telangana face immediate economic adjustment challenges. State governments lose a lot of money from banned gaming in the form of GST and other taxes.

Economists predict that as the industry transitions to sustainable, innovation-focused models, the Act’s long-term advantages may outweigh any short-term disruptions. This

marks a fundamental shift from revenue-maximizing to socially responsible gaming.

Disclaimer: The information contained in this Article is intended solely for personal non-commercial use of the user who accepts full responsibility of its use. The information in the article is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. We make no representation or warranty of any kind, express or implied regarding the accuracy, adequacy, reliability or completeness of any information on our page/article. 

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