By Rameesh Kailasam
On Tuesday, the Centre introduced Bill No. 110 of 2025, titled The Promotion and Regulation of Online Gaming Bill, in the Lok Sabha, which was passed without much discussion. This Bill is the complete opposite of the government’s approach to online gaming, moving away from the earlier amended Information Technology Intermediary Rules in April 2023. The Bill, while attempting to address the concerns of Indian online gaming start-ups about illegal offshore gambling and betting platforms, has ended up shutting down all real money gaming formats in the country. This signals the end of online gaming start-ups and the sector’s foreign direct investment (FDI) story in India.
Multiple states have attempted to ban online gaming formats by regularly confusing companies with inconsistent definitions of gambling and betting. Various high court verdicts have overturned the bans till date. Even formats have been challenged all the way till the Supreme Court, and these have been turned down for many real money gaming formats. This Bill could potentially be challenged in court if it is passed similarly in Rajya Sabha, considering that many courts in India have overturned such bans.
Ban on real money games
While the Bill proposes to encourage e-sports and online social games, it proposes a blanket ban on online games that involves any kind of payment—be it users paying a fee, depositing money, or staking other assets with the expectation of a monetary win.
On one hand, the Bill aims to promote and regulate the online gaming sector, including e-sports, educational games, and social gaming. Additionally, it proposes the creation of an authority for coordinated policy support, strategic development, and regulatory oversight of the sector. On the other hand, it clearly prohibits the offering, operation, facilitation, advertisement, promotion, and participation in online money games through any computer resource, mobile device, or the internet, particularly where such activities operate across state borders or from foreign jurisdictions, thereby hurting sporting events, television advertising, and other media that have benefitted from such sponsorships and advertisement engagements.
The Bill also states that no bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce, or otherwise facilitate any transaction or authorisation of funds towards payments for online money gaming services. This also puts at risk all banking transactions as well as accounts with their balance amounts. The authority on online gaming has been empowered to determine, on receipt of an application from any person offering an online game or on a suo motu basis, whether a particular online game is an online money game.
Punitive penalties been prescribed on anyone offering such a service. It would be seen as a contravention of Section 5, making the party liable for punishment with imprisonment of up to three years, a fine of up to Rs 1 crore, or both. Advertising such services would be considered a violation of Section 6, punishable with imprisonment of up to two years, a fine of up to Rs 50 lakh, or both. Engaging in transactions or authorising funds would be a contravention of Section 7, with penalties including imprisonment of up to three years, a fine of up to Rs 1 crore, or both. Clause 11 further specifies that if an offence is committed by a company, every person responsible for the conduct of the business at the time as well as the company itself shall be liable for prosecution and punishment.
Industry fears unintended fallout
Interestingly, the government has cited rising concerns over gaming addiction, debt traps, financial fraud, and national security threats as the primary motivations for this strict approach. Ironically, these were the very concerns given to the government by the online gaming start-ups based in India regarding illegal offshore platforms that were operating with ease.
The Bill, in the process of targeting them, seems to cause more damage to the law-abiding and tax-paying Indian start-ups that are emerging in the online gaming space. In today’s digital world, such restrictions will push millions of Indian users towards illegal offshore betting sites and unregulated platforms. Many of them are already hooked on global sites operating outside India jurisdictions.
The proposed restrictions would also cost the exchequer around Rs 20,000 crore in taxes and disrupt an allied industry that spends roughly Rs 6,000 crore annually on advertising, technology, and infrastructure. There is also a pending Supreme Court judgment in the high-stakes Rs 2.5-lakh crore goods and service tax case involving online gaming firms, regarding the rate and manner of levy. The final ruling could have a monumental impact on the future of India’s online gaming industry.
The Bill still has to pass through the Upper House and the industry hopes that necessary amendments will be proposed. There are different ways of addressing the concerns around addiction, age gating, financial discipline, etc., which the industry had already proposed to the government. Recently, the All India Gaming Federation, the Federation of Indian Fantasy Sports, and the E-Gaming Federation jointly signed a Code of Ethics to promote responsible gaming practices and user safety.
IndiaTech.org’s recent Code for Responsible Online Gaming also proposes a voluntary, player-first framework for responsible gaming, rejecting blanket bans and urging safeguards like age checks, spending limits, self-exclusions, and user education. It had recommended aspects like age-appropriate gaming, age verifications, financial safeguards, and user safety by protecting privacy, ensuring secure environments and promoting fair game-play.
It has been seen time and again that blanket bans are not effective. Being the world’s largest democracy, it is time to empower users through smarter safeguards, not restrictive bans.
The writer is CEO, Indiatech.org.
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