Levelling up or locking down? Here is what draft online gaming rules mean for esports in India

esports

Esports in India are looking at a reset. The ministry of electronics and information technology (MeitY) released the draft Promotion and Regulation of Online Gaming (PROG) rules on October 2, paving the way for the country’s first online gaming law to kick in.

While the framework brings long-awaited recognition to competitive gaming, it also introduces stricter compliance that can reshape how esports firms operate. Here’s Moneycontrol's low-down on the draft rules and how they will redraw India’s online gaming landscape:

What are the highlights of the draft rules?

An online game service provider intending to offer esports will apply to the Online Gaming Authority of India, as mandated by the new law.

At present, there is no need to seek approval from any authority to offer an esports title and that is how it should be, Shiva Nandy, founder and CEO, Skyesports, said.

"Many of the world’s biggest esports titles began as casual games before communities built competitive ecosystems around them, and some games evolve over time from social play into full-fledged esports. The current draft introduces too much rigidity by requiring approval for what should be an organic process," Nandy said.

He will submit his feedback through the Indian Digital Gaming & Esports Society (IDGES), a not-for-profit body set up by the Confederation of Indian Industry (CII). Feedback can be sent until October 31.

At present, an esports title can be run by publisher permissions and adherence to general company law, said Rohit Agarwal, founder and director, Alpha Zegus, a gaming marketing agency.

With esports clocking a compound annual growth rate of 18-19 percent, a transparent registration process will give brands and investors more confidence, he said.

For an e-sport title to be registered, it must first be recognised under the National Sports Governance Act, the rules say. How different will the process be?

Esports titles don’t go through a sports recognition process. "The draft rules make the process stricter but also elevates esports to the level of other recognised sports. With India’s esports audience already crossing 150 million in 2024, this move signals that esports athletes will now get the same status as traditional sports professionals," Agarwal said.

Nandy calls it a big shift. "This (mandatory recognition of a title under the National Sports Governance Act, 2025) should not be a blanket requirement. At most, it could apply only to certain top-tier esports titles. We will be submitting this feedback through IDGES," he added.

Do new rules make daily operations difficult?

The proposed framework does risk making daily operations cumbersome, Nandy said. "In their present form, some provisions seem unviable for many stakeholders, especially smaller organisers and individual developers working to build esports titles," he said.

Nandy is working on collective feedback through IDGES to ensure that regulation protects the ecosystem without stifling the speed, creativity, and flexibility that make esports thrive.

According to Agarwal, there will be some extra work in the beginning, including documentation, compliance, and internal checks. But brands, investors and players will trust the ecosystem more when they know esports is regulated like a proper sport, he said.

Esports providers need to have a grievance redressal mechanism. How will firms approach this?

Agarwal plans a two-tier system — in-game helpdesk and grievance officer for quick fixes, and an independent panel for escalations like prize money or bans. "The idea is to give players a transparent, time-bound way to resolve issues. The average esports tournament in India now attracts 30–50 million digital viewers, so grievance handling can’t be an afterthought," he said.

Nandy said the company addresses player and community concerns through multiple channels. "Our approach will be to formalise these systems further in line with the draft rules. But the framework should be practical so that it strengthens accountability without creating excessive overhead, especially for smaller organisers," he said.

What should the online gaming authority look like?

The authority must have people who really understand esports alongside experts in law, consumer rights, and child safety, Agarwal said.

"Our expectation is a body that works with clear checklists, time-bound approvals, and reasoned orders, so studios aren’t left guessing. Given the industry is expected to hit Rs 25,000 crore in (annual) revenue by 2028, the authority must think of scale, not just regulation," he added.

Nandy said it is essential that the authority includes people who understand esports, given the kind of powers it has. "The draft rightly provides for esports expertise, but our expectation is that this should go further with representation from the wider industry, including organisers, players, publishers, and community leaders," he added.

Are esports firms ready to play ball?

Esports firms operate in an unregulated environment but the new law requires them to register titles, follow compliance norms, set up grievance mechanisms and report to a central authority. It adds some paperwork but also gives the sector more legitimacy, Agarwal said.

"Considering India’s gaming market was $3.8 billion in FY24 and is projected to reach $9.2 billion by FY29, this kind of structure was overdue," he said.

Nandy said the proposed rules bring one major change, which is clarity. "By formally separating esports from real-money gaming, the rules remove the ambiguity that has long held the industry back," he said.

As a tournament organiser, Nandy said the rules mean closer collaboration with state governments to elevate and recognise talent, something they are already doing with Tamil Nadu through initiatives like the CM Trophy and Chennai Esports Global Championship (CEGC).

Akshat Rathee, co-founder and managing director, NODWIN Gaming, expects new rules to accelerate grassroots programmes, open the door for state and district-level championships and offer a clear career pathway for players, much like in traditional sports.

Animesh Agarwal, once a top esports player who later launched an esports team, S8UL, said the rules will give brands and investors assurance that they are entering a structured, regulated ecosystem. "This clarity is set to attract more brands and partners and will unlock larger sponsorships and creator collaborations," he said.