India's Online Gaming Bill 2025 clears Parliament, bans money games

The Promotion and Regulation of Online Gaming Bill, 2025 has cleared both Houses of Parliament this week, marking a pivotal shift in India’s approach to the online gaming sector. The Rajya Sabha passed the Bill on Thursday, a day after its approval in the Lok Sabha, rejecting Opposition calls for deeper scrutiny. The legislation now awaits Presidential assent.

Once enacted, the Bill will ban all forms of online money games—including fantasy sports, poker, rummy, and digital lotteries—while promoting e-sports and safe, skill-based social gaming. It also imposes penalties on service providers, advertisers, and financial institutions that support banned games, with jail terms of up to three years and fines of up to Rs 1 crore for first-time offenders.

Government Defends Legislation as Urgent and Balanced

Welcoming the passage of this Bill in both Houses of the Parliament, India’s Prime Minister Narendra Modi, in a post on X, said, “This Bill, passed by both Houses of Parliament, highlights our commitment towards making India a hub for gaming, innovation and creativity. It will encourage e-sports and online social games. At the same time, it will save our society from the harmful effects of online money games.”

Union Electronics and IT Minister Ashwini Vaishnaw, who introduced the Bill, reiterated that the government’s intent was shaped by the rising distress caused by predatory gaming platforms. He also said that the government had spent over three years engaging with stakeholders to develop a measured response. “We engaged deeply with the industry to understand how the harmful impact can be prevented, contained and reduced,” he told the Rajya Sabha.

In his post on X, Vaishnaw highlighted that the law gives legal recognition to e-sports and commits government support for game creators through new schemes and programmes. “Online social games will be promoted as a safe and constructive way to interact and learn,” he said.

Rising Social Costs and Regulatory Gaps

The government has argued that the unchecked rise of online money games has caused widespread harm. According to Vaishnaw, over 45 crore Indians have been negatively affected, suffering losses exceeding Rs 20,000 crore. The Press Information Bureau stated that some families lost life savings, and in extreme cases, financial distress has led to suicides.

The World Health Organization classifies “gaming disorder” as a recognised mental health condition, reinforcing the urgency of regulatory action. The government said the Bill seeks to curb addiction, fraud, and exploitation—especially of young users—by platforms that promise quick profits while using manipulative algorithms.

A National Law to Regulate and Restructure

The Bill encourages the structured growth of e-sports and social games while introducing strict penalties for those offering, promoting or financing banned money games. It also mandates the creation of a new Online Gaming Authority to classify and register games, issue guidelines, and respond to complaints.

The legislation also bars banks and financial institutions from processing transactions related to prohibited gaming services. It allows the government to block access to illegal platforms under provisions of the Information Technology Act, 2000.

Officials said central legislation was necessary due to inconsistent State-level rules and the cross-border nature of many gaming platforms, which often operate from offshore jurisdictions and evade Indian laws. The law aligns with India’s broader digital governance framework, including recent regulations on data protection, content moderation, and platform accountability.

Industry Bodies Warn of Deep Economic Impact

Several industry associations have raised concerns about the Bill’s prohibitive framework. In a joint letter to Union Home Minister Amit Shah earlier on 19 August, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF), and Federation of Indian Fantasy Sports (FIFS) had called the Bill a “death knell” for the sector. They warned that a blanket ban would destroy jobs, deter global investment, and push users toward illegal offshore platforms.

According to the federations, the sector supports over two lakh jobs, contributes Rs 20,000 crore in taxes annually, and has attracted Rs 25,000 crore in foreign direct investment as of June 2022. India’s online gamer base grew from 36 crore in 2020 to over 50 crore in 2024, with the sector projected to double by 2028. The passing of the Bill has also raised fears that more than 400 companies in the industry will shut down.

Towards a Structured Gaming Economy

The government maintains that the sector had been operating without a coherent legal framework, allowing platforms to exploit loopholes and operate beyond Indian jurisdiction. With many gaming apps evading domestic tax and compliance norms, the Ministry of Electronics and Information Technology invoked powers under the Allocation of Business Rules to regulate the space.

While banning harmful money games, the law supports e-sports as a legitimate digital activity requiring strategy and skill. The new law classifies e-sports as competitive, rule-governed games requiring strategy and cognitive skill, and separates them from gambling-oriented platforms that promise unrealistic financial rewards.