A potential ban on India's real-money gaming (RMG) industry in the government's online gaming bill could deliver a severe setback to a $25-billion sector that employs over 2 lakh people directly and indirectly, industry stakeholders told Moneycontrol.
They added that the move would push users toward illegal offshore betting websites, matka operators, and fly-by-night actors, boosting these platforms while undermining tax revenues, user safety, and national digital sovereignty.
Industry estimates peg goods and services tax (GST) losses from offshore gambling operators at over $4 billion, higher than the $3.5 billion in revenue generated by India's RMG industry. The sector itself contributes more than Rs 25,000 crore in annual taxes.
Prominent players in this space include Dream11, Games24x7, Nazara Technologies (Pokerbaazi), Gameskraft, and Mobile Premier League (MPL).
Online Gaming bill
The online gaming bill, called Promotion and Regulation of Online Gaming Bill 2025, was introduced in the Lok Sabha on August 20, a day after it received the Union Cabinet nod.
The bill "prohibits" offering, aiding, abetting, inducing online money games and online money gaming services. Online money game is defined as an online game, irrespective of whether it is based on skill or chance that is played by paying a fee, depositing money or other stakes in expectation of winning in return of money or other stakes.
The proposed law also prohibits the promotion of money games. “No person shall advertise, promote or facilitate any money game or betting activity in any form, including through online platforms or intermediaries,” it says.
The ban covers both direct and indirect advertising of money games, ensuring that such activities are not marketed to consumers through online or offline channels.
India's three leading skill-gaming industry bodies - the All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) - have written a letter to Home Minister Amit Shah to intervene in this matter, Moneycontrol reported on August 19.
The industry bodies have also sought an opportunity to present their case along with solutions that “ensure responsible gaming while protecting users”.
No public consultation
Several industry executives whom Moneycontrol spoke to pointed out the lack of any public consultation for the current draft bill. However, in January 2023, the Ministry of Electronics and Information Technology (MeitY) held a public consultation on gaming-related amendments to the IT Act, 2021, along with discussions involving stakeholders such as gaming companies, industry bodies, players, and lawyers.
The ministry subsequently notified these amendments in April 2023, allowing multiple self-regulatory organisations (SROs) to decide whether a real-money game could be permitted in India. However, it is said to have later dropped the SRO plan.
"The Bill is extremely problematic, prime facie unconstitutional and not sustainable in law...The definition of 'online money game' is also manifestly arbitrary, illegal and unconstitutional for failing to distinguish between games of skill and chance," said Jay Sayta, a technology and gaming lawyer.
He added that "Games of skill enjoy constitutional protection under Article 19(1)(g) of the constitution and multiple High Courts have ruled that a complete prohibition is illegal and unconstitutional"
Various Indian courts have also held blanket bans on online skill gaming to be a violation of Articles 14 and 19(1)(a), industry experts said.
RMG apps accounts for the bulk of revenues of India's overall gaming industry which is estimated to cross $9.2 billion in revenue by FY29 at a 20 percent CAGR over the next five years.
It is also one of the rare sectors in India's digital economy that has multiple companies with sizable profits.
Gameskraft currently leads the pack in terms of profits, with a total profit of Rs 947 crore on operating revenue of Rs 3,475 crore for the financial year FY24. Dream11 posted a net profit of Rs 188 crore on operating revenue of Rs 6,384 crore in FY23.
WinZO's FY24 revenue also jumped 70 percent to Rs 1,055 crore while profit surged 151 percent to Rs 315 crore for the year. Real money gaming platform Zupee reported a profit after tax of Rs 146 crore in FY24, as compared to a loss of Rs 36 crore in FY23.
This strong financial performance came despite an increased tax burden due to the 28 percent GST regime implemented in October 2023. The government is mulling to increase it to 40 percent, according to media reports.
The sector has attracted $3 billion in foreign direct investment (FDI) so far, but global investors may pull back if policy unpredictability continues, a top gaming official said.
"Major investors in the gaming sector are worried their money could be lost. Funding in the sector can’t happen, and no entrepreneur will enter this space," the official said.
They added that IPOs in the sector are unlikely under the current circumstances. "There are companies ready to go public; all they needed was clarity on GST," the official noted.
Sayta said the Centre should wait until the Supreme Court pronounces its verdict in the Gameskraft matter before proceeding to introduce or pass the Bill.
“The Supreme Court is seized of all these issues, including whether online gaming is a state or central subject and whether online skill-based games played for stakes amounts to gambling & betting or not,” he said.
Last week, after extensive arguments, the apex court reserved its judgment in the Gameskraft batch of cases pertaining to GST show cause notices worth Rs 2.5 lakh crore sent to online RMG firms.
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