Online Gaming Bill: Proposed clampdown may put 2 lakh jobs at risk, lead to loss of Rs 20,000cr in tax revenue

The Bill, on the one hand, seeks to promote and regulate eSports and online social games (say, the likes of Candy Crush), while clearly prohibiting online money gaming in India.

A proposed clampdown on online gaming risks harming a fast-growing industry that has become a source of employment, tax revenue, and foreign investments in India. The move threatens to wipe out 200,000 jobs, Rs 25,000 crore in foreign direct investment, and Rs 20,000 crore in tax revenues. It may also push 45 crore Indian users into the arms of illegal offshore platforms.

According to industry estimates, the online gaming sector currently employs over 200,000 highly skilled professionals and is home to more than 400 start-ups, which have together attracted around Rs 25,000 crore in foreign direct investment (FDI). The sector also contributes significantly to government finances, with a potential loss of Rs 20,000 crore in tax revenues if restrictions are enforced—an especially critical factor given the current economic slowdown.

The industry further generates about Rs 6,000 crore annually for allied segments such as advertising and technology services. Experts warn that a ban could also drive nearly 45 crore Indian users towards illegal offshore platforms, exposing them to greater risks and undermining regulatory oversight. They argue that instead of prohibitions, a well-defined and balanced regulatory framework would better serve user safety while safeguarding employment, investment, and revenue opportunities.

“Instead of cracking down on these notorious offshore firms, the government is choosing to penalize Indian companies that follow rules, pay taxes, and create jobs,” said an industry representative to Storyboard18. “This flawed approach not only risks shutting down a legitimate industry but also allows the black market to thrive unchecked.”

Earlier, Union Cabinet approved a bill related to the promotion and regulation of online gaming, and the government is likely to bar platforms offering any online money gaming service. The bill is to be tabled in Parliament on Wednesday.

The Promotion and regulation of online gaming Bill, cleared by Union Cabinet on Tuesday, prohibits online money gaming or its ads, and prescribes imprisonment or fine, or both, for those offering or advertising them, as it seeks to differentiate such games from eSports or online social games, according to a source.

The Bill proposes that any person offering online money gaming service in violation of the stipulated provisions will face imprisonment of up to three years or a fine that may extend to Rs 1 crore, or both. The provisions also stipulate imprisonment of up to two years and or a fine of up to Rs 50 lakh, or both, for those indulging in advertisements in contravention of rules.