On August 19, the Central government made its most decisive move that, on one hand could provide a helping hand for a nascent e-sports industry, and on the other, sound a death knell for real money gaming platforms.
The Promotion and Regulation of Online Gaming Bill, 2025 attempts to draw a legal line between games of skill such as e-sports and online social games and, essentially proposes to ban money games played with deposits or stakes .
The Bill was cleared by the Union Cabinet on August 19 and was passed in the Lok Sabha on August 20.
The introduction to the Bill states that its purpose is to “promote and regulate the online gaming industry in India, by distinguishing between permissible online games and those that involve money stakes, and to provide for prohibition of online money gaming and matters connected therewith or incidental thereto.”
What is prohibited?
The Bill expressly prohibits the offering of money games. Section 3 of the bill states, “No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service.”
This prohibition also covers advertisements, sponsorships and the facilitation of financial transactions tied to such games.
How is online money gaming defined?
The bill defines an “online game” as “a game offered on the Internet or an electronic network and accessible by a user through a computer resource or an intermediary.”
“Online money gaming” is defined separately as a game “where a user makes a deposit, directly or indirectly, with the expectation of earning winnings on that deposit.”
What will the new authority do?
The Bill sets up a new Authority on online gaming to oversee regulation, and it will also decide whether a game qualifies as money game. The authority will:
- Register and categorise online games,
- Decide whether a game qualifies as money gaming,
- Handle complaints from players and stakeholders, and
- Issue directions to platforms.
- It will also have the power to block platforms and issue penalties.
The bill says that it will apply to “all persons offering online gaming services within India or outside India if such services are accessible in India.”
This ensures that foreign-based platforms targeting Indian users also come within its ambit.
What about other games?
However, the government, in the bill, has also said that it will actively promote permissible games. The introduction notes that “e-sports and online social games contribute to creativity, skills, innovation, and economic growth and therefore require encouragement and support.
What does the industry say?
India’s online gaming sector has strongly criticised the bill -- which was passed by the Lok Sabha on August 20 -- urging Home Minister Amit Shah to intervene. In a joint letter dated August 19 to the government, three major industry bodies -- All India Gaming Federation (AIGF), E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) — warned that the ban would “strike a death knell” for a regulated industry that currently employs over 200,000 people and contributes significantly to the digital economy.
How will this legislation impact India’s gaming sector?
The immediate fallout, industry groups argue, would be job losses, the collapse of startups, and a sharp drop in foreign and domestic investment. The move threatens to wipe out 200,000 jobs, Rs 25,000 crore in foreign direct investment, and Rs 20,000 crore in tax revenues. It may also push 45 crore Indian users into the arms of illegal offshore platforms.
“India has the unique opportunity to lead the world in gaming, technology, and digital entertainment,” the joint letter by three industry bodies cited above said, adding that shutting down regulated platforms would “drive crores of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators who operate without safeguards, consumer protections, or taxation.”
Why did the government bring this legislation now?
Union IT minister, Ashwini Vaishnaw, while justifying the Centre's rationale for bringing in the bill, said that many such platforms have been used for money laundering, financing terrorism, and as messaging channels by terrorist organisations.
In the Statement of Objections and Reasons, accompanying the "Promotion and Regulation of Online Gaming Bill, 2025", Vaishnaw said, "In certain cases, these platforms have been linked to illegal activities including money-laundering, financial fraud, the financing of terrorism, and use as messaging platform for terrorist and terrorist organisations, thereby affecting the security and sovereignty of the State."
The minister also said that "a plethora" of online money gaming service providers that operate from offshore locations circumvent State-specific regulations, evade taxation and has also raised challenges for law enforcement officials because of cross-border concerns.
What do Opposition parties say about the proposed legislation?
Opposition leaders have sharply criticised the move. Congress MP Karti P Chidambaram called it a “knee-jerk reaction without industry consultation,” warning it would eliminate 4 lakh jobs, erase Rs 20,000 crore in revenues, and push transactions offshore, raising national security concerns.
Congress' Priyank Kharge called it “another masterstroke by Modi Sarkar in bad policy making.” He said that there would be a loss of state revenues, collapse of 2,000+ startups, drying up of Rs 23,000 crore in FDI, and the danger of illegal offshore networks.
Kharge argued that the solution lay in "regulation, not prohibition".
What happens now?
The bill was passed by the Lok Sabha on August 20 by a voice vote. It now goes to the Rajya Sabha.
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