Political mind made up on real-money gaming ban; consensus across parties on societal impact, say govt sources

IT secretary S Krishnan spoke to Moneycontrol on the new online gaming bill

The Indian government is firm on its decision to enforce a blanket ban on real-money gaming, amid a rare cross-party consensus over mounting concerns about the sector’s social impact.

Government officials told Moneycontrol that multiple parliamentary committee members have expressed frustration that prior state-level bans have failed to stem the distress these games cause in households nationwide.

“There is a political depth of feeling across the aisle,” said a government official familiar with the drafting of the online gaming bill. “The political class is getting its reading from the ground, and they feel strongly about the societal harm and debt spiral.”

While employment in the sector is significant, the number of Indians playing online real-money games reportedly exceeds 450 million.

“There is a lot of money sloshing around, much of it targeting vulnerable and lower-income groups,” a government official added, who declined to be named due to the sensitivity of the matter.

“We need clarity on what kind of foreign investment and FDI we want in this space. This is not productive FDI. The industry is making outsized profits by preying on the Indian population.”

“This has become a cause of distress across households,” noted a second official. “State bans have been ineffective, which only reinforces the need for stronger central regulation.”

The official further said that e-sports and social games continue to be viewed positively for their contributions to the country’s software and digital entertainment sectors.

“We are not throwing the baby out with the bathwater,” said the second government source. “E-sports, social games:  these will remain good for the software industry.”

Also read: Online Gaming Bill proposes warrantless search and arrest powers, even in digital spaces

‘April 2023 IT rules recognising industry a mistake’

The official added that “we haven’t been heard” --- the argument being made by the industry---is not a fair argument, adding that the April 2023 rules recognising the industry was a ‘mistake.’

In 2023, the Centre already tried to bring online gaming within a regulatory framework through amendments to the Information Technology Rules, 2021. Through the 2023 amendment the government proposed a mechanism for creating self-regulatory organisations (SROs) that would certify permissible online real-money games. These SROs, comprising industry and independent members, were tasked with ensuring that games did not harm users and complied with other due diligence norms. However, the framework failed to take off, as no SROs were ever formally recognised.

“There will be technical challenges. We must up our game,” said this official on the implementation challenges.

These comments come as the government looks to table an online gaming bill, called Promotion and Regulation of Online Gaming Bill 2025, in the Lok Sabha on August 20 after it received the Union Cabinet’s nod on August 19.

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 money or other stakes.

India’s gaming market has surged in recent years, drawing over $2.78 billion in investment and hundreds of millions of users, but also raising concerns over addiction, financial harm, and debt spirals that affect lower income groups.

Also read: This is a balanced bill, provides clarity: MeitY Secretary Krishnan defends proposed ban on money-based games

Online skill-gaming sector approaches Amit Shah 

Meanwhile, India’s online skill-gaming sector has urged Home Minister Amit Shah to intervene against a proposed bill that seeks to ban all real-money games (RMG), warning it would devastate a fast-growing industry, kill over 200,000 jobs and drive users to unregulated offshore platforms.

In a joint appeal, three leading industry bodies - the All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) - said the blanket ban risks undermining Prime Minister Narendra Modi’s vision for a $1 trillion digital economy.

In a letter dated August 19, the skill gaming industry bodies said the proposed legislation, if enacted, would “strike a death knell” for the legitimate, regulated online gaming industry in India. Moneycontrol has viewed a copy of the letter.

AIGF has over 120 members that include companies such as Mobile Premier League (MPL), Nazara Technologies, Gameskraft, Zupee, and Head Digital Works (A23). Meanwhile, EGF represents the country's top rummy and poker operators such as Games24x7, Junglee Games, Head Digital Works, while FIFS counts fantasy sports major Dream11 as its founding member.

Also read: Proposed online gaming ban puts Nazara’s Rs 805 crore PokerBaazi bet at risk

Three unicorns, Rs 31,000 crore revenue

The sector has three unicorns: Dream11, Games24x7, and MPL. It is also one of the few sectors in India's digital economy with multiple companies generating sizeable profits.

Online skill gaming has generated over Rs 31,000 crores in revenue, and has contributed over Rs 20,000 crores in annual direct and indirect faxes. The sector is set to grow by 20 percent CAGR and double by 2028, as per the letter.

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.