India’s online gaming market has expanded rapidly on the back of widespread connectivity, a large digital-native population, and rising investment. The Promotion and Regulation of Online Gaming Bill, 2025 (the “Bill”) passed by the Lok Sabha on August 20, marks a significant turning point for the industry. Framed as a progressive step, it in fact moves against the current global tide, which favors licensing, consumer protections, and responsible gaming over outright bans. By imposing a blanket prohibition on online money games, the Bill sidelines proven regulatory models that channel demand into transparent, well‑supervised markets that protect players and generate tax revenue. Instead, it risks driving activity underground, where consumer harm is harder to prevent and oversight is minimal.
Key Features of the Bill
The Bill’s core goal is to promote e-sports and casual/social gaming while stopping all online games where players put in money to win money. It applies across India and to services run from abroad but offered to Indian users. Specifically, it creates three distinct categories:
- Online money games (banned): games where players pay a fee, deposit, or stake in return for the chance to win cash or other value, even if skill is involved.
- E-sports (permitted): competitive games treated as sports, allowed if they meet defined criteria and are registered with the new regulator.
- Online social games (permitted): games offered for entertainment or skill development, allowed so long as they involve no stakes or winnings, though they may charge access or subscription fees.
The Bill also creates a new central Authority to register and categorize games, decide what counts as an online money game, issue guidelines, and handle complaints. Enforcement of the Bill is stringent, and authorities can investigate, seize digital and physical assets, and block platforms and content under the Information Technology Act, 2000. Penalties for contravening the Bill include up to three years’ imprisonment or INR 1 crore in fines for offering online money games, and up to two years or INR 50 lakh for advertising, with higher penalties for repeat offenses. Companies and responsible officers may also be liable unless they can show lack of knowledge or due diligence.
What This Means for You
For operators, investors, publishers, platforms, and payment providers, the Bill fundamentally reorders India’s iGaming market. The long-standing distinction between skill and chance becomes irrelevant online where stakes and winnings are involved, eliminating a compliant path for real-money formats. Players in this space should plan around rapid compliance assessments, product restructuring to non-stake social models, contingency plans for payments and platform access, and potential constitutional and administrative challenges that may shape the implementation of the Bill. Additionally, they should watch closely for the set-up of the new central Authority, definitional rulings on edge cases like entry fees and non-cash prizes, and payment ecosystem directives to avoid overbroad blocking.
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Disclaimer
***The above post is provided for informational purposes only and has not been tailored to your specific circumstances. This post does not constitute legal advice or other professional advice and may not be relied upon as such.***