Industry reels as Online Gaming Act 2025 halts real money play

By Dharmender Jhamb

The Promotion and Regulation of Online Gaming Act, 2025, bans all real‑money online games, including fantasy sports, rummy, poker, or any online game involving deposit and stake for financial gain, regardless of whether they are games of skill or chance.

Platforms are prohibited from offering, promoting, facilitating, or processing payments for such games. Violation can attract stringent penalties, including up to three years imprisonment and Rs one crore fine, with repeat offenders facing up to five years and fines up to Rs two crore.

Advertising offenses carry penalties up to two years imprisonment or Rs 50 lakh fine. Financial transactions related to money gaming can also attract imprisonment of up to three years and/or a fine of Rs one crore.

A regulatory authority (Online Gaming Authority/NOGC) will be set up to classify games, regulate, monitor compliance, and enforce the law. The Act also aims to promote e‑sports, social, and educational games, encouraging this legal category through recognition and support programs.

Economic Impacts and Industry Response

The fantasy gaming industry, once valued in billions and projected to reach Rs 49,500 crore by 2029 as per a report by FIFS, is now reeling under sudden operational and financial disruptions. Leading companies such as Dream11, MPL, Zupee, Games24x7, and WinZO have halted their real-money operations, while Dream Sports, despite having a strong cash runway, anticipates a steep fall in its valuation.

The ban poses significant risks for both investors and the exchequer. According to various industry sources, more than USD two billion in venture capital funding is at stake as firms are forced to scrap or rethink their business models. Industry bodies have warned that annual tax revenues worth nearly Rs 20,000 crore could be wiped out if the sector collapses. The disruption could also impact domestic and national-level sports leagues, with close to half of them at risk of shutting down and sponsorship revenues projected to decline by 30–40%.

The employment and social impact is equally concerning. The sector directly and indirectly supported nearly 200,000 jobs across over 300 companies, ranging from developers and marketing professionals to customer support and analytics teams. Reports from within the industry point to entire teams being abruptly laid off, leaving employees and their families in financial and emotional distress.

Another emerging concern is the likely rise of unregulated offshore markets. Experts caution that players may gravitate towards foreign platforms such as JackBit, 1xBet, and Parimatch, which are aggressively marketing to Indian users but operate outside domestic regulatory frameworks and offer little consumer protection. Even established operators like Flutter (Junglee) have suspended their services, with its leadership warning that such moves could unintentionally redirect users to unsafe, unmonitored platforms.

Amid these developments, industry bodies such as the All-India Gaming Federation, the E-Gaming Federation, and the Federation of Indian Fantasy Sports (FIFS) are pressing for a balanced regulatory framework instead of an outright ban. Some companies are also preparing to mount legal challenges in high courts, arguing that the blanket restrictions were imposed without adequate consultation and that skill-based games should be exempt from the prohibition.

Medium-to-Long-Term Outlook and Economic Nuances

The new law also opens opportunities for esports and casual gaming by providing long-awaited regulatory clarity. Industry leaders believe this will encourage capital inflows and spur innovation in these segments.

With structured support, India has the potential to position itself as a global hub for game development and esports talent, with ambitions of competing and even securing medals at international platforms such as the Olympic Esports Games in 2027. This vision aligns with the government’s broader digital policy agenda of strengthening the creative economy, empowering youth, and fostering a safer digital environment.

At the same time, the sector faces a delicate balance between transformation and disruption. The ban on real money gaming disrupts one of the fastest-growing categories, but capital and talent may gradually shift to areas with stronger regulatory backing and consumer safeguards.

This transition, however, will require careful adaptation, as a lack of support mechanisms could risk stifling innovation and slowing down job creation across the gaming ecosystem. Ensuring that alternatives such as esports and casual gaming are both sustainable and incentivised will be key to maintaining momentum.

Underlying these developments is a broader policy dilemma: how to balance public welfare with economic growth. By prioritising consumer protection, financial safety, and social outcomes over the economic advantages of a lucrative but risky subsector, the law sets a new direction for the industry. The success of this approach will ultimately depend on the speed of implementation, the effectiveness of the regulatory authority, and the scalability of alternatives such as esports, social, and educational gaming.

The new Online Gaming Act marks a seismic shift in India’s gaming policy, eliminating real-money games overnight, protecting consumers, and attempting to channel investments into safer, regulated gaming formats. While this strengthens regulatory clarity and safeguards public interest, it also upends a significant economic engine, threatening jobs, investment, and tax revenue in the short term.

The long-term success of this law hinges on India’s ability to rewire the ecosystem toward e-sports, creative digital gaming, and education-oriented platforms, balancing welfare objectives with sustainable economic growth.

The author is a Partner at Grant Thornton Bharat.