Playing by the rules: India’s Online Gaming Act and Rules explained

The Ministry of Electronics and Information Technology (MeitY) notified the Promotion and Regulation of Online Gaming Rules, 2026 (the “Gaming Rules”) by notification G.S.R. 303(E) dated April 22, 2026, bringing them into force with effect from May 1, 2026. This has crystallised the legal framework governing online gaming in India, which comprises the Promotion and Regulation of Online Gaming Act, 2025 (the “Gaming Act”), notified in August 2025, and the Gaming Rules.

Prior to the enactment of the Gaming Act, online gaming in India was regulated by a patchwork of State-specific gaming statutes. The legality of a game depended on whether it was classified as a “game of skill” or a “game of chance”, a distinction that often varied across State-statutes and carried ambiguity. However, with the enactment of the Gaming Act, all online money games, regardless of whether such games involve elements of skill or chance, have been prohibited from being offered within the country.

This article provides a high-level overview of the regulatory framework established under the Gaming Act and the Gaming Rules. It examines the classification of online games, the registration requirements applicable to gaming entities, the constitution and powers of the Online Gaming Authority of India, and the penalties and enforcement mechanisms prescribed thereunder.

A foundational feature of the Gaming Act is its clear tripartite classification of all online games. The Act recognises three (3) distinct categories, with legal implications attaching to each such category:

(i) Online Money Games: Online money games are defined under Section 2(g) of the Gaming Act as “an online game, irrespective of whether such game is based on skill, chance, or both, 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.”

Notably, the definition renders the erstwhile judicial distinction between “game of skill” and “game of chance” legally irrelevant for the purposes of prohibition, with the operative criterion being solely whether a game involves a stake with the expectation of monetary return.

(ii) E-Sports: Section 2(c) of the Gaming Act defines “e-sports” as online games involving organised competitive multiplayer events between individuals or teams, recognised under the National Sports Governance Act, 2025 and registered with the Authority or the designated agency. Such games must be skill-based in nature, with outcomes determined by factors such as physical dexterity, mental agility and strategic thinking, and must not involve betting, wagering or any other form of staking.

E-sports are permitted to be offered under the Gaming Act, subject to compliance with the registration requirements.

(iii) Online Social Games: Defined under Section 2(i), “online social games” are games offered purely for entertainment, recreation, or skill development, with no staking or expectation of monetary gain. A subscription or one-time access fee is permissible, provided it does not constitute a stake or wager. Essentially, any online game that is neither an online money game nor an e-sport falls into this category, and is permitted to be offered in India.

Prohibition of online money games

The central operative provision of the Gaming Act is the absolute prohibition on online money games: if a user plays a game by paying a sum or staking money, with the expectation of winning monetary or such other stakes in return, the game is an online money game, and is prohibited, regardless of whether it is based on skill, chance, or both. The prohibition is wide in scope. It extends beyond game operators to anyone who offers, aids, or abets the offering of such games. Advertising is prohibited as well, and no person may, through any medium, directly or indirectly promote or induce participation in an online money game. Financial facilitation is also expressly barred: no bank, financial institution, or payment intermediary may facilitate, permit, or process any transaction towards an online money gaming service, effectively cutting off such services from the formal financial system.

Exception for e-sports and mandatory registration

E-sports carve out a limited exception to the above financial prohibition. Registration or participation fees collected solely to cover entry or administrative costs, and performancebased prize money, are expressly permitted under the Gaming Act and clarified further under Rule 9 of the Gaming Rules. Crucially, these payments must not constitute a bet, wager, or stake; the line between a permissible participation fee and the performance-based prize money, and a prohibited stake, is the defining boundary.

That said, e-sports are now subject to mandatory registration with the Authority, under Rule 12(1)(b). The Authority has ninety (90) days from receipt of a complete application to grant registration, following which it issues a digital Certificate of Registration valid for up to ten (10) years.

While the Gaming Act had envisaged a registration mechanism for online social games, the Gaming Rules have adopted a lighter touch approach. Registration is currently not mandatory for online social games, unless the Central Government specifically notifies a game or category of games to require registration, having regard to factors such as risk of harm to users, scale of participation, or the nature of financial transactions involved.

The Gaming Act, under Section 8, establishes the Online Gaming Authority of India (the “Authority”) as the central regulatory body for the sector. Under Rule 3 of the Gaming Rules, the Authority shall be headed by a Chairperson from MeitY, and shall consist of Members, comprising of Joint Secretaries from the Ministries of Home Affairs, Finance (Department of Financial Services), Information and Broadcasting, Youth Affairs and Sports, and Law and Justice (Department of Legal Affairs).

The Authority is headquartered in Delhi, functions as an attached office of MeitY, and is designed to operate as a digital office, capable of conducting proceedings without requiring physical presence. The Authority’s mandate is broad. Its key functions include: (i) determining (suo motu or on application) whether any game qualifies as an online money game; (ii) maintaining and publishing a public registry of registered and prohibited games; (iii) inquiring into complaints and hearing user grievance appeals; issuing directions and orders to operators, advertisers, and financial intermediaries; and (iv) publishing guidelines and codes of practice in consultation with the Central government.

Appeals against the Authority’s orders lie before the Appellate Authority, i.e., the Secretary of MeitY, and must be filed within thirty (30) days, with disposal targeted within thirty (30) days of receipt.

The regulatory framework expressly brings financial intermediaries within its ambit. Under Rule 18 of the Gaming Rules, every entity facilitating financial transactions in relation to an e-sport or online social game, including banks, payment aggregators, and other intermediaries, must comply with all directions, orders, guidelines, and codes of practice issued by the Authority, covering the facilitation, routing, and settlement of user payments.

The Gaming Act prescribes a stringent penal regime. Offering an online money gaming service or facilitating its financial transactions attracts imprisonment of up to three (3) years and/or a fine of up to Rupees One Crore Only (INR 1,00,00,000/-) on first (1st) conviction, escalating to imprisonment of three (3) to five (5) years and a fine of Rupees One Crore Only (INR 1,00,00,000/-) to Rupees Two Crore Only (INR 2,00,00,000/-) on repeat conviction, with both offences being cognizable and non-bailable.

Advertising a prohibited game carries imprisonment of up to two (2) years and/or a fine of up to Rupees Fifty Lakh Only (INR 50,00,000/-), rising to three (3) years and Rupees One Crore Only (INR 1,00,00,000/-) for repeat offences.

The Gaming Act and the Gaming Rules together represent a decisive shift in India’s approach to online gaming regulation. The Government has chosen to replace the fragmented, state-level skill-versus-chance framework with a uniform, centrally administered regime, at the cost of elimination of a category of games that previously occupied a contested but commercially significant legal space.

The absolute prohibition on online money games is the most consequential feature of the new framework. Operators, advertisers, and financial intermediaries who previously facilitated such games, even under a good-faith “game of skill” classification, now face significant criminal exposure for noncompliance with the new regime. The breadth of the prohibition, extending across the value chain to banks and payment processors, and even advertisers, signals the strong legislative intent to enforce the ban through financial and marketing exclusion, rather than content takedowns alone.

For the permissible categories, the framework offers a degree of regulatory certainty. E-sports operators have a clear registration pathway, and online social game operators benefit from a lighttouch regime for now, although the Central Government retains discretion to impose registration requirements as the sector evolves.

In sum, the new framework demands prompt attention from all stakeholders in the online gaming ecosystem, including operators, platforms, investors, and financial intermediaries, to assess existing products and services against the revised legal landscape.

About the authors: Harini Sudersan is a Partner and Satyajit Nair is an Associate at Poovayya & Co.

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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