The Parliament recently passed the Promotion and Regulation of Online Gaming Bill, 2025, banning real-money games while encouraging e-sports and online social games.
What is Online gaming?
- Online gaming refers to playing video games or engaging in multiplayer experiences over the internet.
- They can be of different types based on the interaction and stakes involved such as e-sports events, individual player entertainment games, educational games, etc.
- The Government has passed the Online Gaming Bill, 2025 to regulate and promote the growing online gaming sector.
Key Provisions of the Promotion and Regulation of Online Gaming Bill, 2025
- Segmentation of Gaming: The Bill has divided the Online gaming in different segments i.e. E-Sport, Online Social Games and Online Money Games.
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- E-Sports: Recognised as a creative industry; government to support development and mainstreaming.
- Online Social Games: Allowed as safe, entertainment-oriented platforms without financial stakes.
- Ban on Online Money Games: The Bill completely prohibited any type of online money games including poker, rummy, fantasy sports and betting-based games.
| Category |
Definition |
Examples |
| E-Sports |
Competitive, skill-based digital gaming where players or teams participate in structured tournaments, leagues, or championships, often broadcasted online or offline.
E sports has become a regular feature in events such as Asian games
The Olympic Esports Games inaugural event is set to take place in 2027 in the Kingdom of Saudi Arabia. |
- BGMI (Battlegrounds Mobile India) tournaments.
- Valorant India Series and Indian Esports Championship.
|
| Online Social Games |
Casual, entertainment-focused digital games that do not involve monetary stakes or financial returns for players. |
- Ludo King
- Among Us
- Candy Crush Saga
|
| Online Money Games |
Games involving monetary deposits, entry fees, or stakes with the promise of financial returns based on chance, skill, or both. |
- Dream11, MPL, My11Circle (fantasy sports apps).
- RummyCircle, Adda52 (rummy/poker platforms).
|
- Ban and Penalties
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- Penalties for the online money game Platforms: Any person who offers online money gaming service will be punished with imprisonment or fine or both.
- First-time violation: Up to 3 years imprisonment and ₹1 crore fine.
- Repeat offence: 3–5 years imprisonment and fine up to ₹2 crore.
- Promotion ban for Online money games: The Bill has provision banning Social media influencers/advertisers to promote the online money games .
- They can face up to 2 years imprisonment and ₹50 lakh fine for violation.
- Ban on Financial Services for Online money games: Banks and other financial institutions can not provide any type of transaction for such games.
- Online Gaming Authority: It establishes a Statutory body to regulate, supervise, and support gaming sector.
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- It can determine whether the online game is a money game or not based on complaints received or suo motu.
- It will also be responsible for policy coordination, e-sports promotion, curbing money laundering, addictive algorithms, and fraud.
Rationale Behind the Ban on Online Money Games
- Social harms: 32 suicides reported in past 31 months linked to online money gaming addiction.
- Economic distress: Families losing lifetime savings; compulsive gambling behaviour rising.
- National security concerns: Links to money laundering, fraud, and terror financing.
- Public health: Evidence of addiction, anxiety, depression, and behavioural disorders among youth.
Impact of the Online Gaming Bill 2025 on Industry
- Overregulation Risk: Blanket ban equates regulated skill-based games with predatory gambling, stifling innovation.
- Sudden prohibition without a long-term roadmap may deter capital and talent from entering India’s gaming ecosystem.
- Market Size at Risk: The Indian gaming industry, valued at $3.8 billion and projected to grow to $9.2 billion by 2029, faces uncertainty due to the blanket ban on real-money games.
- Threat to Employment: With over 1.3 lakh skilled workers employed in the sector, around 20,000 jobs are at immediate risk, raising concerns of large-scale layoffs.
- Company Closures: More than 300 firms may be forced to shut operations, significantly disrupting India’s fast-growing start-up ecosystem in digital entertainment.
- Sports and Sponsorship Losses: Nearly 50% of franchise sports leagues could collapse, while non-cricket sports may suffer 30–40% fall in sponsorship and ad revenues.
- Stock Market Fallout: Gaming firms like Nazara Technologies and Delta Corp saw share prices plunge after the Bill’s passage, reflecting shaken investor confidence.
Significance of the Bill
- Safeguarding Citizens: The Bill protects vulnerable groups, particularly youth, from the social, financial, and psychological harms of predatory real-money gaming platforms.
- Legitimising Responsible Gaming: By recognising e-sports and social games as safe and creative industries, it provides clarity and legitimacy to start-ups in India’s digital entertainment sector.
- Establishing Uniform Regulation: It creates a national-level legal framework, ensuring consistency in gaming regulation, addressing fragmented state-level laws, and enhancing accountability through a central authority.
- Advancing Digital India and Security: The Bill strengthens Digital India goals by balancing innovation with safety while curbing risks of money laundering, fraud, and terror financing through gaming networks
About Online Gaming Sector
- Platforms: Online games can be played on a wide range of devices, from dedicated gaming consoles (PlayStation, Xbox, Nintendo Switch) to PCs, laptops, and mobile phones.
Types of Online Gaming Sector
- Skill-Based Games: The outcome is primarily determined by a player’s knowledge, strategy, and expertise rather than luck.
- These games are recognized as legitimate forms of gaming and are exempted from them from prohibitory gambling laws.
- Examples:
- Fantasy Sports: Platforms like Dream11 and MPL operate under the premise that users make strategic decisions to create virtual teams.
- Chess: A game entirely dependent on intellectual and strategic prowess.
- Rummy: Courts in India have categorized rummy as a skill-based game due to the need for strategy and memory retention.
- Chance-Based Games: These are also known as games of luck as the outcomes largely depend on randomness or uncontrollable factors.
- In most parts of India, these games fall under the ambit of gambling laws and are subject to stringent regulation or outright prohibition.
- Examples:
- Lottery: A classic example of a game relying purely on chance.
- Slot Machines: Predominantly found in casinos, their outcomes depend on random number generation.
- Roulette: Players bet on numbers, colors, or other factors, but the results are entirely luck-driven.
Revenue Models for Online Gaming
- Real money gaming (RMG): The revenue includes revenue generated via online games wherein a user makes a deposit, in cash or kind, with the expectation of monetary rewards on that deposit.
- Social/casual Gaming Revenue: It includes revenue generated via online games that feature in-app advertising, in-app purchases (e.g. purchase of virtual items within the game) or through subscription services.
Online Gaming Economy
- The Online Skill-Based Gaming Sector is a sunrise sector.
- Growth Potential: A PwC report pegs online gaming as among the fastest growing sectors in India, accounting for ₹33,000 crore in 2023
- It is projected to reach ₹66,000 crore, growing at a CAGR of 14.5% between 2023-2028.
- The India Real Money Gaming (RMG) market accounted for a staggering INR 16,500 crore in revenue during 2023 and is expected to grow at a 10% CAGR from 2024 to 2028
- FDIs: Global investors have invested approx USD 2.8 billion (INR 23,000 crore) in investment over the past five years
- Employment Opportunities: Online gaming could create an additional 2-3 lakh direct and indirect jobs in the next few years, in addition to the two lakh jobs already generated.
- The gaming industry is creating jobs in the fields of marketing, sales, data analysis, game design, technology, as well as ancillary jobs for live streamers, coaches, mentors, sport therapists, etc
Factors Shaping Growth of Online Gaming in India
- Young Gaming Community: India is the youngest nation in the world with nearly 650 million smartphone users making it a hotbed of young gamers with a substantial gaming community, comprising 42.5 crore gamers.
- Mobile users form 85 per cent of the industry with mobile games such as PUBG Mobile, Free Fire, Clash of Legends and Call of Duty Mobile serving as entry routes.
- Cheap Data Consumption: India has the cheapest internet mobile data prices in the world instrumental in building the culture of data consumption for the purposes of entertainment and playing games.
- In 2023, an average Indian citizen was consuming 24.1 GB of data per month, an increase of 24% over 2022.
- Thriving Startup Ecosystem: The growing number of startups within the Animation, Visual Effects, Gaming, Comics, and Extended Reality (AVGC-XR) ecosystem provides the much-needed indigenous support network to entrepreneurial ventures in gaming and e-sports.
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Conclusion
The Online Gaming Bill, 2025 strikes a balance between promoting safe digital innovation and protecting society, ensuring responsible gaming while addressing economic, social, and security risks from real-money platforms.
21 Aug 2025
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