Centre moves to ban online money games; recognise and promote e-sports

The Central government is set to introduce the Promotion and Regulation of Online Gaming Bill, 2025 in the Lok Sabha today, seeking to prohibit all forms of online money gaming—whether based on skill, chance or a mix of both.

If enacted, the Bill will mark a sharp departure from the long-standing legal distinction between games of skill and games of chance, holding that any game involving monetary stakes or expectation of financial gain will be unlawful.

In a stringent move, the Bill proposes to classify offences relating to both the operation of online money games and the processing of financial transactions linked to them as cognisable and non-bailable.

This would empower enforcement agencies to:

• Arrest without warrant anyone suspected of violating the prohibition.

• Begin investigations directly, without prior sanction from a magistrate.

• Carry out search and seizure operations in physical premises and digital spaces, including computer systems, storage devices and virtual platforms. Officers may also override passwords or security codes to gain access.

The proposed law also envisages the creation of a national regulatory authority for online gaming.

• Blanket ban on money games: Any online game that involves users depositing money or stakes in return for the possibility of monetary rewards would be prohibited. This includes skill-based formats like Rummy or fantasy sports if they involve cash participation.

• Strict penalties: Violators could face up to three years’ imprisonment or fines of ₹1 crore. Repeat offenders may face mandatory minimum jail terms and fines of up to ₹2 crore. Promoting or advertising money games may also result in up to two years in prison or fines of ₹50 lakh.

• Ban on financial facilitation: Banks, payment providers and other financial intermediaries would be prohibited from processing or authorising transactions related to money gaming.

• National authority on gaming: A statutory body is proposed to be set up to register and categorise online games, decide whether a particular offering qualifies as a money game and issue directions or codes of practice.

• Recognition of e-sports: Competitive digital games played under sporting rules would be recognised as a legitimate sport, with provision for training academies, research centres and integration into national sporting policy.

• Promotion of social and educational games: Online games without monetary stakes, such as social or educational platforms, would be supported and promoted for recreation, learning and skill-building.

The government has justified the proposed prohibition by pointing to the grave social, economic, and psychological harm caused by money gaming:

• Manipulative design: The Statement of Objects and Reasons highlights the use of “manipulative design features, addictive algorithms, bots and undisclosed agents” that undermine fairness and encourage compulsive play.

• Financial distress and health impacts: The Centre says that evidence points to individuals - especially the youth and economically weaker groups - facing financial ruin, indebtedness and psychological harm, with consequences for families and communities.

• Public health risk: The easy availability of money games on mobile apps and digital platforms has been linked to compulsive behaviour, mental health challenges and disruption of social life, it is stated.

• Criminal misuse: The Statement also says that platforms have been connected to money laundering, tax evasion, fraud and even terrorism financing, raising concerns over national security.

• Cross-border enforcement gaps: Many services operate from offshore jurisdictions, bypassing Indian laws and state-level restrictions, the Centre points out.

The government argues that given these risks, it is “prudent and practical in the interest of the general public to completely prohibit the activity, rather than attempt regulation.”