The union government's new draft online gaming bill that proposes banning online money gaming platforms, also empowers authorities to search and arrest without a warrant. It gives the central government the authority to extend the scope of investigations into online gaming to “any place” -- including computer systems, servers and communication devices.
The Promotion and Regulation of Online Gaming Bill, 2025 was approved by the Union Cabinet on August 19 and is slated to be tabled in the Parliament on August 20.
The draft bill says that any officer appointed by the central government will be authorised to "enter any place" and "search and arrest without warrant any person ..who is reasonably suspected of having committed or of committing or of being about to commit any offence under this Act".
The bill further explains "any place" as any premises, building, vehicle, computer resource, virtual digital space, electronic records, or electronic storage device.
"The officer may, if necessary, gain access to such computer resource, virtual digital space, electronic records or electronic storage device by overriding any access control or security code, where such code thereof is not available," the bill reads.
The draft bill prohibits the offering of online money gaming services, advertisement of such gaming services and puts a bar on bank, financial institutions' transactions with such platforms.
For violators, the bill has proposed penalties and made offences non-bailable.
Section 9 of the proposed legislation levies imprisonment of upto 3 years and fine that can extend Rs 1 crore for those found offering, aiding, abetting, inducing, indulging in online money gaming services.
The bill further proposes imprisonment of upto 2 years or fine extending to Rs 50 lakh for those who advertise, promote or sponsor online money game or online money gaming services.
Additionally, financial intermediaries or others who facilitate payments for such games will face the same penalty as the operators.
Corporate liability
In case of a company committing an offence, the draft legislation holds every officer responsible for its conduct liable.
Section 11 (3) states that directors, managers, secretaries or other officers will be guilty if offences occur with their “consent, connivance or are attributable to their neglect.” This places direct accountability on company leadership to prevent violations.
Overall, the draft bill seeks to create a central framework for online gaming by banning money games, while recognising permissible formats such as e-sports.
The introduction of the Bill says that it intends to “curb the growing menace of online money gaming, which has resulted in addiction, financial loss, and criminal activity, while ensuring that positive formats of online games are promoted and regulated.”
Union Minister for Electronics and Information Technology Ashwini Vaishnaw, in a statement attached to the legislation, said that it was necessary because “these platforms often promote compulsive and addictive behaviour, resulting in financial ruin, mental health disorders, and increasing incidents of fraud and exploitation.”
Online gaming sector: size and implications
The online gaming sector employs over 200,000 highly skilled professionals and has attracted approximately ₹25,000 crore in FDI.
Industry sources indicate that the legislation - if passed by Parliament - could lead to a potential loss of Rs 20,000 crore in tax revenues. They add that the ban risks driving 45 crore users to illegal offshore platforms, heightening concerns of user harm.
In a joint appeal to union home minister Amit Shah, three leading industry bodies- All India Gaming Federation, E-Gaming Federation and Federation of Indian Fantasy Sports - said that the blanket ban risks undermining Prime Minister Narendra Modi’s vision for a $1 trillion digital economy and that the proposed legislation -- if enacted -- would 'strike a death knell’ for the legitimate, regulated online gaming industry in India.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
