Online Gaming Regulation in India: Challenges, Risks and Policy Reforms

In 2025, the government enacted the Promotion and Regulation of Online Gaming Act, overseen by the Ministry of Electronics and Information Technology (MeitY). This act adopted a “paternalistic state” approach by imposing a blanket ban on online gaming. 

The stated goals were to protect vulnerable youth from the psychological and socio-economic impacts of gaming and to prevent financial data from leaving the country.

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Objectives of the Law

• The legislation aimed to protect young users from addiction, regulate real-money gaming activities, safeguard financial and personal data, and reduce the growing social, psychological, and economic harms associated with online gaming platforms.

Why the Ban Failed?

• Offshore Platforms Continue Operating: Despite restrictions on domestic gaming platforms, foreign and offshore gaming websites continue to remain accessible, allowing Indian users to participate through alternative technological routes.

Methods Used to Bypass the Ban

• VPNs (Virtual Private Networks): Users employ VPN services to hide their Indian IP addresses and connect through foreign servers, thereby bypassing domestic restrictions and accessing banned gaming platforms
• Proxy Servers: Several gaming operators reroute traffic through proxy networks and alternate digital pathways, making enforcement difficult for regulatory authorities.
• Encrypted Messaging Platforms: Links to banned gaming websites are frequently circulated through encrypted platforms such as WhatsApp and Telegram, making tracking and enforcement highly challenging.
• Mirror Websites: Blocked websites often reappear within hours under slightly modified domain names, creating a continuous “cat-and-mouse” cycle between regulators and platform operators.

Limitations of Blanket Bans

• Although the government reportedly blocked thousands of URLs associated with online gaming platforms, these restrictions have failed to eliminate access because digital platforms can rapidly adapt to enforcement measures.

Reasons for Failure

• The internet transcends territorial boundaries, making it difficult for any single country to completely restrict digital activities operating from foreign jurisdictions.
• Technological innovation evolves much faster than regulatory frameworks, resulting in outdated enforcement mechanisms and ineffective monitoring systems.
• Enforcement remains largely reactive rather than preventive, allowing illegal platforms to continuously re-emerge in new forms.

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Emerging Risks and Challenges

• Money Laundering: Illegal funds generated through criminal activities can be disguised as gaming winnings, thereby creating a convenient channel for laundering black money.
• Terror Financing: Offshore gaming platforms may also facilitate hawala-style transfers and anonymous financial transactions, which can potentially be misused for terror financing networks.
• Fraud and Scam Ecosystem: Fraudulent online platforms often lure users through fake investment or gaming schemes, collect large sums of money, and disappear without accountability or consumer protection.
  • Example: Fake online coin-auction platforms reportedly collected money from users by promising valuable returns before abruptly shutting down operations and absconding with public funds.
• Mule Accounts: Fraudsters frequently use bank accounts opened in the names of poor, vulnerable, or illiterate individuals to transfer illegal funds and conceal the actual beneficiaries of financial crimes.

Governance Gap

• Since online gaming activities are officially banned, victims often lack accessible grievance redressal mechanisms and legal protection against fraud, exploitation, or financial loss.
• Regulatory agencies also face serious limitations in monitoring offshore operators because these platforms function outside India’s direct legal and territorial jurisdiction.

International Regulatory Models

• UAE Model: The United Arab Emirates shifted away from a complete ban and adopted a strict licensing-based regulatory framework that allows gaming activities under controlled legal supervision.
• Sri Lanka Model: Sri Lanka established a centralized gaming and gambling regulatory authority empowered to license offshore operators and monitor their activities through institutional oversight.
• Benefits of Regulated Models: Such frameworks enable governments to impose spending limits, strengthen consumer protection, improve financial monitoring, and generate tax revenues from regulated gaming activities.

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Way Forward

• Centre–State Coordination: Since internet-based activities operate across jurisdictions, effective regulation requires cooperative federalism, inter-state coordination, and multi-agency cyber enforcement mechanisms.
• Taxation and Awareness: Revenue generated through gaming taxation can be utilised for public awareness campaigns, addiction counselling programmes, digital literacy initiatives, and strengthening cybercrime enforcement capabilities.
• Replace Blanket Ban with Smart Regulation: Instead of relying on absolute prohibition, India should move toward a licensed and regulated domestic framework supported by strong oversight and transparent compliance mechanisms.
  • Suggested Measures
    • Introduce strict licensing requirements for gaming operators to ensure accountability and legal oversight.
    • Implement spending and deposit limits to reduce addiction and prevent excessive financial losses among users.
    • Establish robust age-verification systems to protect minors and vulnerable groups from harmful gaming exposure.

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