For long, Real Money Games have been at the centre of heated debate in India over addiction, financial distress, and regulatory grey zones. They have now been squarely addressed by the Union government through the Promotion and Regulation of Online Gaming Bill, 2025. As of now, Lok Sabha has cleared the bill that proposes a blanket ban on online money games, even those based on skill, while recognising and promoting e-sports and non-monetary online games as part of the country’s digital economy.
Real money gaming refers to online games played with monetary stakes, where users deposit money in the hope of winning cash rewards. Unlike e-sports, which are competitive skill-based games recognised as sports, including PUBG, Valorant, FIFA, etc, RMG straddles a contested space. Many of its formats, such as rummy and fantasy sports, have been recognised by courts as games of skill, but the new Bill treats them on par with gambling and bans them outright.
Siddarth Chandrashekhar, Advocate at the Bombay High Court, criticised the sweeping approach of the legislation, saying it effectively eliminates the long-standing skill-versus-chance legal distinction and “aims for blanket regulation, keeping out not only gambling but also competitive money-based games that have drawn youth into addictive patterns.” While the Bill cites rising addiction, financial distress and mental health issues among young users as justification, Chandrashekhar argued that prohibition risks driving the industry underground. He added that “using arrest powers for online gaming violations is much akin to using cannons to kill mosquitoes,” reflecting a view that the government is treating gaming entrepreneurs as criminals rather than business operators in regulatory grey areas.
Esports welcomes clarity
The recognition of e-sports within the Bill has been welcomed by industry leaders. Akshat Rathee, Co-founder and Managing Director of NODWIN Gaming, called the government’s intent “an encouraging step towards building a more structured and globally competitive ecosystem.” He stressed, however, that clear definitions were critical. “For this vision to materialise effectively, it is critical that the terminology used in the bill, particularly distinctions between e-sports, online gaming, online social gaming, and online money gaming, is clearly defined and uniformly understood. Such clarity will not only remove ambiguity but also create a strong regulatory foundation,” he told financialexpress.com.
Rohit N. Jagasia, Founder and CEO of Revenant Esports, described the Bill as “a step towards long-needed clarity.” “Today, we have a patchwork of state laws that create confusion. The bill rightly seeks to draw a sharp line between e-sports, social gaming, and chance-based money games. That distinction is vital for nurturing and protecting skill-based gaming and e-sports,” he said. Jagasia added that a national framework would promote “healthy competition, innovation, and investment,” though he noted that the exact impact on e-sports would become clear once the full text of the legislation is released. “A one-size-fits-all approach could unintentionally stifle legitimate entertainment-focused businesses,” Trilok Potluri, CEO & CO- Founder, Claw King by Lucratech, added.
Industry bodies raise alarm
In contrast, industry associations representing skill-gaming operators have raised strong objections. In a joint representation to the Ministry of Home Affairs, the All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) said that the proposed ban would “strike a death knell” for the online skill-gaming industry.
Roland Landers, CEO of AIGF, Joy Bhattacharjya, Director-General of FIFS, and Anuraag Saxena, CEO of EGF, warned that prohibition would harm consumers by driving them to unregulated platforms. “By shutting down regulated and responsible Indian platforms, it will drive crores of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators who operate without any safeguards. Instead of protecting people, this Bill risks exposing them to fraud, exploitation, and unsafe practices, and may end up helping illegal offshore operators, which is one of the biggest national security threats to the country today,” the representative said.
Adding to this, Deepro Guha, Associate Director at public policy firm The Quantum Hub (TQH), said that while regulation of online money gaming was necessary, an outright ban “goes far beyond and bans the sector altogether, which is likely to negatively impact a large cohort of creators, app developers and entrepreneurs.” He argued that the Bill lumps skill-based games with games of chance, despite multiple Supreme Court rulings recognising skill gaming as a constitutionally protected business under Article 19(1)(g). Guha added that by shutting down compliant Indian RMG operators, the legislation risked pushing users towards unregulated offshore platforms, a development that could weaken consumer protection and reduce government revenue, similar to what followed the GST hike on online gaming.
The associations argued that the industry, valued at over Rs 2 lakh crore with revenues of Rs 31,000 crore and annual tax contributions exceeding Rs 20,000 crore, supports more than two lakh jobs and has attracted foreign direct investment of Rs 25,000 crore. A ban, they said, would destroy employment, deter investment, and force over 400 companies to shut down.
Stakeholders fear job losses, offshore surge
Other stakeholders echoed these concerns. “A blanket ban will not protect Indians — it will harm them. It will kill jobs, drive users to illegal gambling, and violate the Constitution. India needs smart regulation, not prohibition, which just ends up helping illegal offshore operators, which are one of the biggest national security threats to the country today,” one industry statement noted.
The statement added that the sector, valued at $25 billion and growing at 20 per cent CAGR, contributes over Rs 25,000 crore in taxes annually and supports at least one lakh direct and indirect jobs ranging from engineers to content creators. It warned that prohibition would weaken India’s digital leadership and cede ground to unregulated offshore platforms.
Social impact and investor reaction
Not all commentary has been critical. Industry expert Harish Bijoor supported the legislation, highlighting the social harm linked to unregulated money games. “We are talking of revenues which exceed Rs 23,000 crore, but this issue is not about money. The bill is a good one as it ensures that the lives of those trapped in the online gaming industry, borrowing money and falling into debt cycles, are going to be protected,” he said.
Meanwhile, listed firm Nazara Technologies issued a clarification distancing itself from real-money gaming. The company said it has “no direct exposure” to the business, though it holds an indirect stake in PokerBaazi’s parent, Moonshine Technologies. Despite this clarification, its shares fell 6.19% in early trade following the announcement of the Bill.
The government has justified the legislation by citing concerns over financial harm, addiction, money laundering, and the use of offshore platforms. It has also emphasised its intent to encourage safe, skill-based e-sports and social gaming as part of the digital economy.
However, legal experts point out that the Centre’s authority to impose an absolute ban on games of skill may be tested in court. Asish Philip, Executive Partner at Lakshmikumaran and Sridharan Attorneys, said, “The legislative competency for an absolute ban on games of skill will come under scrutiny, particularly under Article 19 of the Constitution.” He added that since gambling is a state subject, “an outright prohibition at the Central level may not withstand judicial scrutiny” and could also conflict with state laws and the Public Gambling Act, 1876. A more balanced regulatory framework, he noted, such as the one recently adopted in Tamil Nadu, may be constitutionally more sustainable.
What does the bill say?
The Bill distinguishes between three categories of digital games: e-sports, treated as competitive skill-based sports; social and educational games, meant for recreation and learning; and online money games, played with monetary stakes.
All money games are prohibited, with penalties including up to three years’ imprisonment and fines of up to Rs 1 crore for first-time offenders. Advertising, payment facilitation, and endorsement of such games are also barred. The Bill provides for the creation of a new Online Gaming Authority to register and regulate approved games, and empowers government officers to block access, search, and seize property linked to illegal operations.