Regulating the digital playground: India’s online gaming rules, 2025

By- Ananay Jain, Partner, Grant Thornton Bharat

India’s online gaming industry is no longer a fringe phenomenon, it has become a mainstream digital economy powerhouse. With over 450 million players and revenues projected to surpass USD 8.6 billion by 2027, the sector is reshaping how young India entertains, competes, and spends. Yet this meteoric rise has also exposed significant fault lines: gambling-style money games disguised as skill-based platforms, rising risks of addiction, weak consumer safeguards, and unregulated financial flows. Left unchecked, these challenges could overshadow the promise of e-sports and social gaming.

Recognising both the opportunities and the risks, Parliament passed the Promotion and Regulation of Online Gaming Act, 2025 earlier this year. Building on that foundation, the Ministry of Electronics and Information Technology (MeitY) has released the draft Promotion and Regulation of Online Gaming Rules, 2025, outlining how the law will be implemented. Together, they represent India’s first comprehensive framework for the sector, one that seeks to encourage innovation, legitimise genuine gaming, and protect users from exploitative practices.

A new watchdog: The online gaming authority of India

At the heart of the draft rules is the creation of the Online Gaming Authority of India, a dedicated regulator entrusted with overseeing the sector. Chaired by a senior MeitY official, the Authority will also include representatives from the Ministries of Youth Affairs & Sports, Information & Broadcasting, Financial Services, and Law.

Its responsibilities are wide-ranging: it will classify and register e-sports and online social games, maintain a National Registry of approved games, and act decisively against platforms running money-driven models. Significantly, the Authority has been vested with powers equivalent to a civil court, it can summon witnesses, demand documents, conduct inquiries, and issue binding directions. This combination of regulatory oversight and quasi-judicial authority positions it as the central institution for ensuring India’s gaming industry operates fairly and transparently.

“For the first time, India will have a regulator dedicated solely to online gaming. It reflects the government’s intent to treat gaming as both a high-growth industry and one requiring firm safeguards,” says a digital policy expert.

Drawing the red line: Determination and categorisation of games

One of the most critical challenges in gaming regulation is distinguishing between legitimate games of skill and gambling-style platforms. The draft rules empower the Authority to make this determination using clear parameters: whether participation requires monetary deposits, whether rewards are convertible into cash, and whether fees act as stakes for winnings.

Games that meet these conditions will be classified as online money games and prohibited from operation, advertising, or financial facilitation. Their names will be published in a public blacklist on the Authority’s website. Conversely, e-sports (recognised under the National Sports Governance Act, 2025) and online social games designed for recreation, education, or skill-building can be formally registered and promoted.

“This framework eliminates the grey zone. It offers genuine gaming a pathway to legitimacy while shutting out gambling in disguise,” notes a gaming industry consultant.

Registration and certification: Legitimacy through recognition

The rules establish a structured registration process for game providers. Applications must be submitted digitally and include details of the game’s design, target audience, revenue model, and user protection mechanisms.

Once approved, the provider will be issued a Certificate of Registration, valid for up to five years. All certified games will be listed in the National Online Social Games and E-sports Registry, a public database that enhances transparency for both users and regulators.

This certification acts as a trust seal. For players, it signals confidence; for developers, it provides credibility and protection against arbitrary restrictions.

“Registration will serve as a quality stamp. It gives users confidence that they’re engaging with legitimate platforms, and developers the stability to grow responsibly,” says the founder of a leading gaming start-up.

Safeguards and accountability: Cancellation, suspension, and penalties

The Authority has been equipped with enforcement powers to ensure compliance. Registrations may be suspended or cancelled if games morph into money games, if false information was submitted, if penalties remain unpaid, or if providers repeatedly defy regulatory directions. Importantly, all inquiries must be concluded within 90 days, preventing regulatory delays.

Violations will attract penalties under Section 12 of the Act. Depending on the severity, these may include fines, suspension, or outright prohibition from operating. The scale of punishment will consider the extent of financial gain, the number of users harmed, the gravity of misconduct, and any remedial steps undertaken. All penalties collected will be credited to the Consolidated Fund of India, ensuring financial accountability in enforcement.

Grievance Redressal: Putting Players First

Perhaps the most user-centric provision in the rules is the three-tier grievance redressal system. Every gaming platform must establish an internal mechanism to resolve user complaints. If unresolved, grievances can be escalated to the Grievance Appellate Committee under the IT Rules, 2021. Finally, users have the right to appeal to the Online Gaming Authority, which must resolve such cases within 30 days.

This is particularly significant in India, where surveys show that over 40% of players have faced issues with fairness or delayed withdrawals, often with no effective recourse. The new framework ensures that players are no longer left without a voice.

Another important safeguard relates to user balances collected before the law comes into force. The draft rules require banks and payment intermediaries to refund such amounts within 180 days. These refunds will not be treated as illegal facilitation of gaming transactions, ensuring players are not financially stranded during the transition to the new regime.

Why These Rules Matter

The Promotion and Regulation of Online Gaming Rules, 2025 represent a watershed moment for India’s digital economy. They aim to shift the industry from a loosely regulated, high-risk space into a transparent, trusted, and innovation-driven ecosystem. For users, they promise safety, accountability, and fair treatment. For developers, they provide legal recognition and credibility in a market long clouded by uncertainty. And for the government, they establish a framework to regulate financial flows, curb illegal gambling, and ensure responsible growth.

“These rules give India’s gaming sector the spine it needed promoting growth, but never at the expense of players,” says an industry observer.

India’s online gaming industry holds enormous potential to drive digital innovation, youth engagement, and economic value. But its growth must be guided by clear boundaries and strong user protections. The Online Gaming Rules, 2025 aim to achieve precisely that: encouraging legitimate gaming while drawing a firm line against exploitative practices.