The government is likely to impose a blanket ban on all online money-based games. A draft Bill titled ‘The Promotion and Regulation of Online Gaming Bill, 2025,’ seeks to prohibit any person from offering online games involving money in India, failing which they could be imprisoned for up to three years, and penalised Rs 1 crore.
Those promoting such platforms, such as social media influencers, may also face jail time of two years, and a penalty of Rs 50 lakh. The Bill also seeks to prohibit banks and financial institutions from facilitating financial transactions on such platforms.
If approved in its current form, it would be curtains down for many in India’s online gaming industry, which has seen an exponential growth. Sources in online gaming companies say it would be a huge blow as the industry employs more than 200,000 highly skilled people. Proliferation of illegal platforms/offshore betting would create huge user safety issues, they said.
Besides, there are more than 400 start-ups, involving Rs25,000 crore in foreign direct investment. The central exchequer stands to lose, too, to the extent of Rs 20,000 crore in taxes. The industry also spends around Rs 6,000 crore annually on advertising, technology etc, industry sources said.
Companies impacted
Companies such as Dream11, MY11Circle, Khelo Fantasy, SG11 Fantasy, WinZO, Games24x7 and Junglee Games are likely to be impacted by the provisions of the Bill.
The draft Bill says the exponential growth of online gaming in India has brought to light a number of concerns. While online gaming is a significant part of the creative economy and can contribute to cognitive development and technological literacy, online money gaming in particular raises significant issues, the Bill says, adding these issues include addiction, mental health problems, financial losses leading to suicides, and manipulative practices like opaque algorithms and bots.
The Bill is also understood to have envisioned the creation of a central authority to promote competitive e-sports in the country, while ensuring overall compliance with the law. The Centre will also recognise, categorise and register “online social games” with the authority and facilitate the development and availability of online social games for recreational and educational purposes. Online social games may have an option to accept payment in the form of a subscription fee or access fee, as long as it is not in the form of a stake or wager.
Offshore operators
According to a report by FICCI and EY from March 2025, online gaming companies in India collectively earned a revenue of close to $2.7 billion in 2024.
The government has already been taking action against offshore operators and platforms accused of malpractice, including freezing bank accounts and blocking access to non-compliant services. The Bill, once enacted, will formalise these efforts within a statutory framework.
In addition to regulation, plans are underway to impose a 40% goods and services tax on online gaming. The new levy is likely to come into effect around Diwali, officials indicated.
The government has tightened regulation of the online gaming sector in recent years. Player winnings have been taxed at 30% from 2024-25, while a 28% GST on online gaming is in place since October 2023. Authorities now also have the power to block unregistered or illegal offshore platforms, bringing them under the tax net.
The Bill is also an attempt to provide uniform rules across states, several of which already have their own laws on online gaming. By explicitly criminalising betting while regulating skill-based games, the government is seeking to draw a line between entertainment and gambling in the digital space.