Online Gaming in India: Opportunities and challenges under Promotion and Regulation of Online Gaming Act 2025

In today’s digital age, gaming — like any other form of entertainment — has become readily accessible at our fingertips. While playing for recreation is harmless, in some cases, excessive gaming can lead to addiction, financial losses, and even serious mental health concerns such as anxiety and depression. This raises an important question: where does one draw the line between healthy interest and harmful addiction?

Recognizing the need to address these growing challenges, the Promotion and Regulation of Online Gaming Bill, 2025, was introduced in the Lok Sabha on August 20, 2025, and was passed by the Lok Sabha on the very same day. Subsequently, the Rajya Sabha passed it on August 21, 2025. On August 22, 2025, the said Bill received the assent of the President of India and was thereby made the Promotion and Regulation of Online Gaming Act, 2025 (“Act”).

According to the new Act, "online game" means any game played on an electronic or digital device and which is managed and operated as a software through the internet or any other kind of technology facilitating electronic communication [Section 2(f)]. The new Act classifies online games into three categories such as e-sports, social gaming and real money games. The definition of the same has been given below:

E-Sports: Games that are played as part of multisport events. These are duly recognized under the National Sports Governance Act, 2025. The outcome of such a game is determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players. This type of game shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes.

Online Social Game: Games that do not involve money or other stakes. These types of games are played mainly for skill development, recreation or educational purposes.

Online Money Game: This type of game can be a combination of both skill and chance. The games are often played by a user by paying fees, depositing money or other stakes in expectation of winning, which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports.

Prohibition of Online Money Games: The Act imposes a complete blanket ban on money games. In addition, it makes it unlawful for any individual to create, aid, abet, induce, or otherwise participate in advertising — across any form of media — that encourages a person to play or promote online games. The Act further prohibits financial institutions, including banks and payment service providers, from processing or authorizing any transactions related to online money gaming services.

Authority on Online Gaming: Under the Act, the Central government is mandated to establish an Authority for the regulation of online gaming. This Authority will consist of a Chairperson along with such other members as may be required to effectively discharge its functions under the Act.

The Authority will be empowered to, upon receiving an application, determine whether a particular game qualifies as an online money game. It will also have the responsibility to recognize and categorize online games in the prescribed manner, in addition to carrying out other functions entrusted to it under the Act.

Offences and Penalties: Any person offering or facilitating online money games will be liable to punishment with imprisonment of up to three years and a monetary fine of up to one crore rupees. In the case of unlawful advertisements, the prescribed penalty is imprisonment of up to two years, a fine of up to fifty lakh rupees, or both. For involvement in unlawful financial transactions under the Act, the punishment includes imprisonment of up to three years and a fine ranging from one crore to two crore rupees. All such offences have been classified as cognizable and non-bailable under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023.

With the rapid emergence of technology, the online gaming sector in India has witnessed exponential growth, led by major players such as Dream11, MPL, and several other platforms that have become household names. However, with the enactment of the new regulatory framework, these companies are now poised to undergo drastic operational and structural changes.

The implications of the Act extend far beyond the gaming companies themselves. On the economic front, the new restrictions are expected to influence employment opportunities, particularly in areas such as software development, content creation, marketing, and customer support, which have so far thrived under the booming online gaming industry. The changes may also impact the market landscape, forcing companies to revisit their business models, product offerings, and revenue strategies. This, in turn, could alter the pace of foreign investments flowing into the sector, as global investors often view regulatory uncertainty as a critical risk factor.

Another important area of concern is the advertising ban on money gaming services, which is likely to disrupt multiple allied industries. Media houses, digital advertising platforms, and event organizers — who rely heavily on sponsorships and promotions from online gaming companies — may see a significant decline in revenues. This ripple effect could extend to large-scale sporting events, celebrity endorsements, and even grassroots-level sponsorships, which are often funded by online gaming platforms seeking visibility and consumer engagement.

Supporters of this Act argue that the Act protects youth and vulnerable groups from addiction, fraud, and financial losses associated with money gaming, citing cases of suicides and illegal activities linked to these platforms. The Bill aims to shut down routes for money laundering and terror financing, closing loopholes that previously existed in online betting. On the other side, critics warn that the blanket ban could hinder India’s rise as a global gaming hub, depriving talented professionals of opportunities and shrinking the job market across digital entertainment. They also speculate that granting authority to enter any premise-digital or physical, block websites and apps or conduct warrantless searches raises concerns about due process and privacy.

In essence, while the Act seeks to safeguard citizens from the adverse effects of money gaming, it simultaneously introduces a new era of compliance, restructuring, and strategic reorientation for the online gaming sector and its interconnected industries. The coming years will determine how effectively the industry adapts to these regulations and whether it can continue to grow within the boundaries of the new legal framework.

About the authors: Vara Gaur is a Partner and Shilpa Chaudhury is a Principal Associate at Saga Legal.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

If you would like your Deals, Columns, Press Releases to be published on Bar & Bench, please fill in the form available here.