In a manner akin to a stealth operation, the Government of India pushed the Promotion and Regulation of Online Gaming Bill 2025 in Parliament as the monsoon session drew to a close. This Bill outlawed online real money games while aiming to promote the growth of e-sports and online social games. The Bill was rushed through both Houses without any debate and was not preceded by any consultations with the affected industry or with States, which have jurisdiction over key aspects of the topic.
Online gaming was a sunrise sector in India and had seen significant foreign investment. This sudden ban will have repercussions for foreign direct investment across domains. Why would global investors trust India when rules flip overnight, and when the government kills one of the few digital industries where India could lead globally?
The fallout
Online gaming sits at the intersection of technology, payments, and digital content — the very sectors India claims to champion under the banner of Digital India. Choking this industry means shutting the doors on thousands of skilled jobs, slowing down innovation, and discouraging entrepreneurship at a time when the economy desperately needs them all.
When job creation in India is pitifully slow and at a time when the world is investing in gaming as the next digital frontier, this Bill has directly resulted in tremendous job losses. The gaming sector was on track to employ 1.5 lakh people by 2025 — across development, design, programming, customer support and analytics. These are precisely the kinds of cutting-edge, quality tech jobs India needs in its digital economy. Some of these will survive the ban.
Online real-money games were expected to generate about ₹17,000 crore in Goods and Services Tax (GST) revenue for the Union government and States. By closing this source of revenue, the Centre has unilaterally cut off a crucial revenue source for States also, while making a significant sacrifice. Why?
The government’s central arguments in support of the ban are that online real money games have resulted in financial ruin for players and resulted in something akin to drug addiction. That it is clearly a societal harm that needed to be addressed urgently. However, is the ban likely to provide a cure? Or, would careful regulation, as being developed in States such as Tamil Nadu, provide a more balanced resolution? Were there other, possibly better, ways to curb the negative side-effects of online real money games?
Glossing over responsible gaming
Online gaming companies were working on technological initiatives to identify and prevent problematic gaming. Responsible play tools already exist and are proven globally. These include age-gating to restrict access to minors, self-exclusion mechanisms, deposit and time limits, bot-detection systems, Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, and ethical advertising standards. Instead of strengthening such safeguards, the ban abruptly destroys them, leaving players more vulnerable than before.
If online gaming platforms that complied with taxation and regulation are forced out, compulsive players will inevitably find a way to shift to illegal apps hosted by offshore or underground networks. Such platforms operate beyond the reach of Indian authorities, pay no taxes, and expose consumers to fraud and unsafe practices. The government will not only lose revenue but also inadvertently encourage the very illegal gambling rackets that it seeks to curb. This ban would just end accountability. The real issue here is regulatory capacity. Instead of building strong oversight frameworks which balance public interest with private profit, India has fallen back on the blunt tool of prohibition.
The ban also violates constitutional provisions, judicial doctrines and strikes a blow to federalism. Article 19(1)(g) of the Constitution grants every person the fundamental right to practise any profession or business. The ban attacks the very foundations of this right. With one piece of legislation, a thriving industry has been dealt a body blow. If the concern was about the promotion of gambling, the Union government should have consulted with States as regulation of betting and gambling are State subjects. The new law has already been challenged in courts as it raises several questions of constitutional propriety.
A grey zone concerning online gaming has been whether it constitutes a ‘game of skill’ or a ‘game of chance’. Judicial decisions have consistently upheld the legitimacy of games of skill. States are allowed to regulate or ban games of chance or gambling. Good regulation would clear the doubts around this subject.
A middle ground exists
Ideally, legislation should be developed which protects players, prevents addiction and exploitation, and addresses the priorities of various stakeholders and States. The choice is not between prohibition and a free-for-all. There is a middle ground: a clear licensing framework, strict compliance standards, and a taxation regime that is fair but predictable.
Banning online real money gaming, on the other hand, only ensures that both revenues and opportunities vanish into the underground economy, while leaving players unprotected and vulnerable. Time will tell whether, through this ban, India has protected its citizens or failed them.
M.V. Rajeev Gowda is a former Member of Parliament (Congress). The views expressed are personal
Published – September 15, 2025 12:08 am IST