India has enacted the Promotion and Regulation of Online Gaming Act, 2025, marking the most sweeping reform of the country’s online gaming sector. The Bill, cleared by the Lok Sabha on August 20 after a seven-minute discussion and passed by the Rajya Sabha a day later, received Presidential Assent on August 22.
The move comes amid rising concerns over addiction, financial fraud, and tax evasion linked to online Real Money Games (RMGs), where players deposit funds with the hope of winning cash rewards. Government data shows that Indians lose nearly ₹15,000 crore annually to such platforms, while the WHO has flagged links to compulsive behaviour, psychological distress, and even suicides, with 32 cases reported in Karnataka alone in the past 31 months.
The Act categorises online games into three segments: e-sports, social gaming, and RMGs.
While the government intends to promote e-sports and social gaming, the Act imposes a complete ban on RMGs and their advertisements.
Offering RMGs or facilitating payments for them will attract up to three years’ imprisonment, a ₹1 crore fine, or both. Advertising such platforms could result in two years in jail or a ₹50 lakh fine. The offences are cognisable and non-bailable under the Bharatiya Nagarik Suraksha Sanhita, 2023.
The government has empowered CERT-IN to block non-compliant platforms, with the option of involving Interpol for offshore operators. However, no penalties are prescribed for players themselves.
Industry estimates suggest the ban could threaten over two lakh jobs across 400+ firms. Critics argue that the Act makes no distinction between games of skill and games of chance, contradicting past Supreme Court rulings that upheld Rummy and Fantasy Sports as skill-based. Legal experts warn the law may face challenges under Article 19(1)(g) of the Constitution, which protects the right to trade and occupation.
Moreover, the Act leaves gaps on regulating minors in e-sports or social gaming, raising fears of unchecked exposure. Observers also point out that firms may still bypass restrictions via VPNs and offshore operations.
Union IT Minister Ashwini Vaishnaw said the move is based on evidence that RMG algorithms are “rigged” to ensure players never emerge as long-term winners. Official reports have tied RMG platforms to terror financing, tax evasion of ₹30,000 crore, and money laundering through cryptocurrency wallets and mule accounts.
By banning RMGs outright, India has taken a strong stance on the social and financial risks of online gambling. However, with the law blurring the line between skill and chance, its constitutionality is likely to be tested in courts. As companies brace for losses and jobs hang in balance, the future of India’s online gaming industry will now depend on judicial scrutiny and regulatory clarity.
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Published on: Aug 26, 2025, 6:26 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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