The Promotion and Regulation of Online Gaming Bill, 2025, passed in the Lok Sabha to regulate the online gaming sector and in the process banning online money games citing social, psychological, economic and privacy-related impacts of such games is well intentioned but in its zest to protect, it could well turn out to be a red flag for entrepreneurs in the country. It’s not so much about the ban but how it’s been brought about – with little or no consultation with the key stakeholders involved. An internet-based industry, online gaming providers can be established anywhere in the world thus raising questions on the states’ ability to effectively ban this borderless industry.
There are several options that could have been considered for a more nuanced approach to what is considered a grey industry world-wide. Social, economic and moral implications of online money gaming have weighed heavy on economies and cultures , however, developed countries have taken a nuanced view of this industry.
In the European Union for instance, regulations come with product restrictions or state monoplies. France, for example, allows online sports betting and poker but not online casino games. Poland is a state monopoly – state operates online casino games while private operators are restricted to online betting and are subject to high taxes and strict regulatory oversight. In Austria, online betting is regulated and licensed at a state level. Operators in EU have to navigate licensing rules, high tax rates, strict advertising laws. The United Kingdom has taken a view of encouraging companies to establish operations.
Political, moral and cultural optics of the ban aside, economics of a ban are rarely good.
According to estimates, the ban on online money games could wipe out an industry valued at about Rs 2 lakh crore, generating Rs 31,000 crore in annual revenues and contributing about Rs 20,000 crore in taxes.
Industry has written to the home minister of the country seeking relief and an intervention. Industry contends that there are about two lakh jobs at stake here. But the fallout extends far beyond the jobs at stake, it’s the messaging that could have implications for the innovation ecosystem in the country. In innovation-led industries, regulation is always playing catch -up.
While the industry has grown at a compounded annual growth rate of 20 per cent between 2020 and 2024, regulations have tried to keep up. The last one year has also seen constant tussle with the tax department – GST tax notices to the tune of thousands of crores have been sent to companies because of lack of clarity on rules. There has been an entire debate over taxation and difference between game of skill and game of chance.
The bill states its purpose to “promote and regulate the online gaming sector including e-sports, educational games and social gaming .. prohibits the offering, operation, facilitation, advertisement, promotion and participation in online money games through any computer resource , mobile device or the internet.”
The ban seems to be a knee-jerk reaction, a senior policymaker, remarked on anonymity. The Mahabharata was fought because of a game of dice, gambling has pushed individuals and homes to the brink but banning online money games will not act as a deterrent that the government is hoping for, it however does give a message to upcoming industries in the country that nothing is certain. Tomorrow the government can come out with a law and wipe out an entire industry. And that’s not good news.
Moreover, India’s federal structure gives policymakers the option to lay a broad framework and let the states decide depending on their cultural ,economic and social ethos.
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