The recently passed Gaming Act, 2025, has made apps and platforms offering real money-based games (RMG) illegal in India. RMG apps account for the bulk of revenues of India's overall gaming industry.
As per a Moneycontrol report, the ban has resulted in a severe setback to a $25-billion sector and will also impact direct and indirect jobs, and handsome GST collections. This article dives into more details but first let's understand what exactly the act entails.
The Act categorises online games into 4 types:
According to the Act, an “online money game” is defined as any online game, based on skill, chance, or both, where users pay a fee, deposit money, or place a stake in the hope of winning something valuable in return, usually money.
The ban has sparked debate because the real-money gaming (RMG) sector has been a major contributor to India’s economy. Industry experts point out that:
A report by Moneycontrol noted that India’s RMG sector forms an important part of the wider gaming industry, which is projected to cross $9.2 billion in revenues by FY29, growing at a 20% CAGR over the next 5 years.
However, industry representatives highlight a concerning contrast:
This indicates that shutting down local firms may not eliminate the demand; it could instead push users to unregulated offshore platforms, causing further tax leakages.
Despite regulatory hurdles, several RMG companies have reported strong growth in recent years:
This growth occurred even under the burden of a 28% GST regime, imposed in October 2023. Reports suggest that the government is considering raising this rate to 40%, further straining the sector.
The uncertainty has also alarmed global investors. A senior gaming industry official told Moneycontrol:
"Major investors in the gaming sector are worried their money could be lost. Funding in the sector can’t happen, and no entrepreneur will enter this space."
The official also indicated that IPOs planned by several companies are unlikely to proceed in the current climate:
"There are companies ready to go public; all they needed was clarity on GST."
The Promotion and Regulation of Online Gaming Act, 2025 marks a turning point for India’s gaming industry. While the government views the ban on real-money gaming as a step towards consumer protection and regulatory clarity, the economic impact is significant.
The sector’s tax contributions, employment opportunities, and investment inflows highlight what is at stake. Whether the ban will shift demand to offshore operators or trigger policy rethinking remains to be seen, but the move has undeniably created uncertainty for a $25-billion industry and its stakeholders.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Aug 26, 2025, 4:51 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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