The Union Cabinet has approved the Promotion & Regulation of Online Gaming Bill, 2025, paving the way for the most far-reaching crackdown yet on India’s $3.7 billion online gaming sector.
If passed by Parliament, the bill will outlaw all money-based online games—whether skill-based or chance-driven—ban related advertisements, and prohibit banks and payment gateways from processing transactions. Violators could face up to three years in prison and heavy fines.
For market leaders like Dream11, Games24x7, Winzo, GamesKraft, 99Games, KheloFantasy, and My11Circle, the implications are existential. Nearly 86% of industry revenue currently comes from real-money formats, which were projected to drive growth to $9.1 billion by 2029. A blanket prohibition would wipe out that lifeline overnight.
Industry Pushback
The All India Gaming Federation (AIGF) has urged Union Home Minister Amit Shah to intervene, warning that the bill, in its current form, could devastate the sector. The AIGF argues that prohibition will:
- Push crores of players toward unregulated gambling networks.
- Strengthen illegal offshore operators.
- Destroy a legitimate, job-creating industry.
“The bill, if enacted, will cause serious harm and drive players into the hands of fly-by-night operators,” the federation cautioned, stressing that “progressive regulation” is the only sustainable path forward.
Industry insiders, though unwilling to go on record, echoed the concerns—warning of lakhs of job losses, revenue collapse, and wider damage to India’s digital economy.
What the Bill Proposes
According to government sources, the draft law leaves little room for ambiguity:
- Total ban on real-money gaming transactions, regardless of whether the game involves skill or chance.
- Strict financial restrictions, with banks and payment gateways barred from supporting such platforms.
- Advertising ban on real-money gaming.
Only free-to-play and subscription-based formats (with no in-game wagering) would remain legal.
“The bill sets out a comprehensive enforcement framework, but it sidesteps key tax issues, especially ongoing GST disputes pending before the Supreme Court,” said Ranjeet Mahtani, Partner at Dhruva Advisors.
From Regulation to Prohibition
The move marks a sharp shift from recent regulatory approaches:
- A 28% GST on gaming revenues came into effect in October 2023.
- A 30% tax on net winnings began in FY 2024–25.
- The Bharatiya Nyaya Sanhita amendment (December 2023) criminalised unauthorised betting with penalties of up to seven years.
- Over 1,400 illegal sites have been blocked since 2022.
This bill, however, moves from tax-and-regulate to prohibit-and-enforce.
Economic and Legal Fallout
Industry experts warn that the proposed ban could:
- Violate constitutional protections under Articles 14 and 19, which have historically safeguarded skill-based gaming.
- Eliminate at least 1 lakh jobs across engineering, design, and content creation.
- Erode ₹25,000 crore in annual tax revenues.
- Expose crores of players to fraud and addiction risks through illegal operators.
- Chill investor confidence—after more than $2 billion in FDI entered the sector between 2021–22.
“The GST loss alone from offshore operators is conservatively above $4 billion—greater than the entire revenue of the legitimate industry,” said one insider.
The Road Ahead
The sector, currently valued at $25 billion and growing at nearly 20% CAGR, now faces an existential threat. Industry voices argue that prohibition will not protect consumers, but instead hand the market to illegal operators while crippling India’s digital economy.
“What India needs is regulation, not a ban—a progressive framework that separates skill from chance, ensures player safety, and secures tax revenues while allowing innovation to thrive,” one industry leader said.