The Promotion and Regulation of Online Gaming Bill, 2025 was passed by the Parliament on August 21, 2025, and received Presidential assent on August 22, 2025, thereby becoming the Promotion and Regulation of Online Gaming Act, 2025 (“ Online Gaming Act ”). This marks a significant step towards regulating the online gaming sector in India. The Online Gaming Act will come into force once notified by the Ministry of Electronics and Information Technology.
While positioning online gaming as one of the most dynamic and fastest-growing segments of the digital and creative economy, the Online Gaming Act simultaneously imposes for a blanket ban on online money gaming. The industry, presently valued at USD 3.7 billion, has been projected to expand to USD 9.1 billion by the year 2029. It is expected to undergo significant restructuring, as the prohibition on online money gaming may curtail a large segment of the market. Concerns over online money gaming, including threats to public safety and national security, like youth addiction, mental health issues, financial losses that have led to suicide in extreme cases, and the potential abuse of gaming platforms for money laundering or terrorism financing, prompted the introduction of the Online Gaming Act.
Despite being home to an estimated 400-420 million gamers and gaming platforms, India presently lacks a uniform regulatory environment, resulting in numerous policy, legal and consumer protection concerns. The Online Gaming Act seeks to establish a comprehensive legal framework for India's online gaming sector by formally recognising e-Sports and online social games, while prohibiting and criminalising online money gaming services in line with constitutional provisions such as Article 21 (Right to Life and Personal Liberty) and Article 47 (Duty of the State to raise the level of nutrition and the standard of living and to improve public health) of the Constitution of India.
The Online Gaming Act rests on a precise set of definitions, the interpretation of which is crucial to effectively demarcate boundaries and the structure proposed by the legislature. It defines an "Online Game" as any game played on an electronic or digital device and managed through the internet or other technology facilitating electronic communication. This broad definition covers a wide range of digital gaming experiences, irrespective of format or genre, while drawing a clear distinction between "e-Sports", "Online social games", and "online money games."
"e-Sports" are defined as online games that form part of multi-sport events, involving organised competition conducted under predefined rules, where outcomes are determined by participants' skills. Importantly, this definition specifically excludes any element of monetary stakes such as betting or wagering.
In contrast, an "Online Money Game" has been defined as any digital game that involves a payment or stake (in money or its equivalent) with the expectation of winning a monetary return. Notably, e-Sports are explicitly excluded from this definition. The Online Gaming Act further brings within its ambit all "Persons", a term that extends to include individuals, companies, and foreign entities offering services to Indian users.
It is pertinent to note that, until recently, courts and local gaming laws permitted games of skill but forbade games of chance. Once notified into force, all online money games, whether they are skill-based or chance, will stand completely prohibited.
As part of a policy shift that strikes a balance between prohibition, regulation, and promotion, the Online Gaming Act recognises e-Sports, while restricting Online Money Games. It also creates an enabling framework for the government to promote and regulate the industry.
1. Blanket Ban on Online Money Games, Online Money Gaming Services and any related Advertisements
The Online Gaming Act provides that no Person shall provide, aid, abet, induce or otherwise facilitate the provision of Online Money Gaming Services. This provision covers not only direct operators but also third-party intermediaries and facilitators that provide assistance in any shape or form. The prohibition also applies to aiding, abetting, inducing, or otherwise facilitating the making of any advertisement which in any medium of communication, including electronic communication, directly or indirectly invites or induces a person to play or participate in Online Money Games.
As per the Online Gaming Act, any information generated, transmitted, received, or hosted in any computer resource in relation to an Online Money Gaming Service in contravention of the provisions of the Online Gaming Act will be blocked for access by the public under the Information Technology Act, 2000.
2. Promotion of e-Sports
In contrast to its strict stance on Online Money Games, the Online Gaming Act expressly recognizes e-Sports as a legitimate competitive sport. It empowers the Central government to frame guidelines for the promotion and development of e-Sports, which include establishing academies and research centers, implementing incentive schemes for e-Sports innovation and coordinating with State governments and sporting federations. This marks a significant shift in policy, positioning e-Sports as an organized and regulated sector.
The official recognition and growth of e-Sports present tremendous opportunities, opening an emerging market and encouraging investment in sports infrastructure to support its growth, even though the ban on online money games will cause enormous economic losses.
3. Prohibition on Transfer of Funds
The Online Gaming Act places restrictions not only on online gaming platforms but also on financial intermediaries. Banks, financial institutions and any other person involved in the facilitation of transactions or authorisation of funds pertaining to online money games would all be seen to permit, aid, abet or induce those prohibited activities. Hence, they will be brought directly within the scope of regulatory and penal provisions.
4. Establishment of a Central Authority
A cornerstone of the Online Gaming Act provides for the establishment of a central authority to supervise the online gaming industry. In 2023, the Ministry of Electronics and Information Technology introduced provisions under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, for the appointment of self-regulatory bodies (“ SRBs ”) to oversee online games. However, no such SRBs have been appointed till date.
Under the Online Money Gaming Act, the Central government is empowered to vest such the Online Gaming Authority (which is yet to be established), or any such pre-existing body so designated, with the responsibility of performing the following functions, namely registering and classifying online games, issuing operating and compliance guidelines, determining whether a game is an online money game, managing complaints, and ensuring compliance in the industry by providing an industry-wide unified and transparent regulatory framework. The establishment of a central authority is a positive development and brings a much-needed consistency to the online gaming space that has been inconsistent to date due to different State level policies.
5. Offences and Penalties
Violation of the provisions of the Online Gaming Act will attract strict criminal liability and substantial monetary penalties. A person who offers any online money gaming service may face imprisonment of up to 3 (three) years and/ or a fine which may extend to INR 10 million (USD 1,14,611). Further, any person who makes or causes to make an advertisement in contravention of the provisions of the Online Gaming Act in any media faces imprisonment of up to 2 (two) years and/ or a fine which may extend up to INR 5 million (USD 57,310).
Banks, financial institutions, or any person enabling online money games or financial transactions will be subject to imprisonment for a term of up to 3 (three) years and/ or a fine of up to INR 10 million (USD 1,14,611). The Online Gaming Act also provides for harsher penalties for repeat offenders. Companies will also be included in the scope of liability, as every individual who is in charge of, or who is responsible for, the conduct of the company at the time of the offence will also be liable to punishment.
According to the Online Gaming Act, anyone who provides an online money gaming service or game, as well as any bank, financial institution, or intermediary that provides funds for such activities, will be deemed guilty of an offence that is both cognisable and non-bailable. This gives the police the authority to register, investigate, and make an arrest without a warrant, with bail being entirely up to the court's discretion.
6. Existing Laws Governing Gaming
Prior to the enactment of the Online Gaming Act, India's legal framework on gaming was fragmented and outdated. Gambling is assigned as a State subject in Entries 34 and 62 of the State List, and regulations varied widely on a State-by-State basis, creating ambiguity. The only Central law was the Public Gambling Act, 1867 ("PGA"), which focused on physical gaming houses and was unfit for digital platforms. Although the PGA allowed for games of "mere skill" to be exempt from consideration, with the rise of online gaming, these gaps became stark.
States like Nagaland and Sikkim introduced licensing laws for online skill games, but their effect remained territorially limited. Judicial interpretations on key questions, such as the classification of rummy, poker, or fantasy sports, remained varied, with different High Courts and the Supreme Court offering divergent rulings on what constituted a game of skill.
The interplay between the current State-level gaming laws and the federal framework is still up for debate. However, since online gaming is not limited to a single territorial jurisdiction and by its very nature operates across State borders, it is anticipated that Central legislation will prevail guaranteeing consistent regulation and enforcement throughout India.
Industry stakeholders like the All-India Gaming Federation, E-Gaming Federation, and the Federation of India Fantasy Sports, have raised serious concerns over the blanket ban on online money gaming and warned that such a law, once brought into force, could cause considerable damage to what they claim is a legitimate, job-creating industry.
The Online Gaming Act is poised to spark a constitutional showdown in India. By providing for a ban on Online Money Gaming, it intends to change the established jurisprudence on game of skill vs. chance. One will have to wait and watch whether this legislation threatens prominent gaming companies and jeopardizes India's broader fintech industry or if it practically realises the objectives it professes, such as to establish a safe, innovative, and robust online gaming environment.
It will be critical for the financial intermediaries like banks and financial institutions to prepare for and implement appropriate checks and balances to ensure they are not implicated in the prohibited activities.
About the authors: Rahul Deodhar is a Partner and Rencie Rodrigues is an Associate at Phoenix Legal.
The contents of this article are as on August 23, 2025, and may change subject to further notifications or updates issued by the Government of India.
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.
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