Synopsis
The Union Cabinet has approved the Promotion and Regulation of Online Gaming Bill, 2025 which seeks to encourage e-sports and social online games but proposes a blanket ban on real-money gaming. Stakeholders warned that outright prohibition could backfire, pushing users to illegal offshore gambling and unregulated platforms.
AgenciesThe Union Cabinet has approved the Promotion and Regulation of Online Gaming Bill, 2025 for introduction in Parliament, a move industry experts say could effectively wipe out India’s real money gaming (RMG) sector.
The draft bill seeks to encourage e-sports and social online games but proposes a blanket ban on real-money gaming. It makes offering, aiding, abetting, or promoting such games an offence, with heavy fines and harsher penalties for repeat violations.
Financial institutions would be barred from processing related payments, while authorities would be empowered to block content, investigate violations, and seize property.
Industry concerns
Stakeholders warned that outright prohibition could backfire, pushing users to illegal offshore gambling and unregulated platforms.
“A restriction will push millions of Indian users toward offshore betting websites, matka operators, and unregulated platforms, exposing them to fraud, addiction risks, and zero consumer protection,” said Rameesh Kailasam, president and CEO of IndiaTech.org, an industry group representing internet startups. “The bill seems aimed at offshore gambling and betting apps but ends up targeting law-abiding, tax-paying Indian startups.”
Economic fallout
The online gaming sector employs more than 200,000 professionals across 400+ startups and has drawn Rs 25,000 crore in FDI. Industry leaders warned that the ban could erode investor confidence, choke FDI inflows, and cost the exchequer an estimated Rs 20,000 crore in lost taxes. An allied ecosystem that spends nearly Rs 6,000 crore annually on advertising, technology, and infrastructure could also take a hit.
Calls for regulation, not prohibition
Industry representatives are urging the government to pursue “smart regulation” that distinguishes games of skill from games of chance, ensures user safety and responsible gaming, enforces grievance redressal, and clarifies taxation policies.
Constitutional challenges
Legal experts have flagged constitutional concerns, noting that courts have previously ruled skill-based games are not gambling.
“The Bill is extremely problematic, prima facie unconstitutional and not sustainable in law. ‘Betting and gambling’ as well as ‘amusements and entertainments’ are squarely state subjects,” said gaming lawyer Jay Sayta, who represents several gaming firms. “Parliament lacks legislative competence here, except under Article 252 if states pass resolutions. The Centre should wait until the Supreme Court delivers its verdict in the Gameskraft case before proceeding.”
Also Read: Government proposes dedicated regulator for online gaming under new law
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