Online gaming bill set to end ‘easy money’ source for sports

The players who wore those shirts were named as the brand ambassadors. And broadcasters roped them in as key sponsors.

With the Promotion and Regulation of Online Gaming Bill, 2025, now headed to President Droupadi Murmu’s desk for her assent — after it was passed in the Lok Sabha on Wednesday followed by the Rajya Sabha on Thursday — the future of online gaming companies, as well as the sports, teams, players, and broadcasters that rely on them for sponsorship, looks shaky.

It is learnt that the companies — individually or collectively — are likely to approach the courts. In a letter to the Home Ministry on Tuesday the E-Gaming Federation (EGF), All India Gaming Federation (AIGF) and Federation of Indian Fantasy Sports (FIFS) said that the blanket prohibition will “strike a death knell for this legitimate, job creating industry, and would cause serious harm to Indian users and citizens”.

The government cited risks of psychological distress, financial loss, money laundering and even financing of terrorism as reasons to prohibit the ‘harmful’ real-money gaming services.

It went on to cite the ‘threat to national security’ as another reason to take the step. “Unchecked expansion of online money gaming services has been linked to unlawful activities including financial fraud, money-laundering, tax evasion and in some cases, the financing of terrorism, thereby posing threats to national security, public order and the integrity of the State.”

Nandan Kamath, a prominent sports lawyer, called the Bill — ‘which came more or less out of the left field’ — a turning point ‘not just for the gaming ecosystem but also for the Indian sports ecosystem that lies downstream, benefitting through direct and indirect and induced revenues from the gaming as well as offshore betting sector’.

An ISL club official, requesting anonymity, added: “For the last few years, this has been easy money for the teams, leagues and players. The offshore sports betting companies were looking for a foothold in the Indian market and, through surrogates, splurged money on marketing campaigns and everyone benefitted from it. Now, we anticipate a short-term impact.”

Although they were provided the shelter after being classified as a ‘game of skill’, the real-money fantasy gaming platforms have for years operated in a legal grey area.

For, they promoted a business that, though legal, was similar to sports gambling, which is banned in India, in many ways because contestants can make money by predicting players’ performances.

Fantasy gaming requires its customers to select a playing XI of professional players and compete against each other using statistics from a live match. The websites charge a fee for entering a team, and the contestants — who have to submit their PAN card, bank details and other personal information — win or lose money based on real-life performances of players.

The Bill added: “Such games often use manipulative design features, addictive algorithms, bots and undisclosed agents, undermining fairness, transparency and user protection, while promoting compulsive behaviour leading to financial ruin.”

There has been a sharp rise in the number of real-money fantasy gaming platforms, which now goes well into triple digits. But Dream11 is the biggest, with a valuation of $8 billion, according to Bloomberg. Dream11 is the Board of Control for Cricket in India’s lead sponsor, acquiring the three-year rights for Rs 358 crore. Similarly, My11Circle paid Rs 625 crore for a five-year right to be the IPL’s official fantasy sports partner.

Kamath said the companies can still continue their association with the teams and leagues by changing their business models.

However, identifying a similar, successful revenue stream — which was until now driven by entry fees paid by a user for entering a competition — to ensure sustainability remains an issue.

Offshore betting companies

The rise of the real-money fantasy gaming platforms has coincided with the proliferation of sports betting companies in the Indian market.

And while the real-money fantasy gaming platforms were caught by surprise with the government’s decision, the offshore sports betting companies have been on the radar for a while. Earlier this month, the Enforcement Directorate grilled former cricketer Suresh Raina for eight hours in an ‘alleged illegal betting app-linked money-laundering case’.

Raina was questioned in a case linked to 1xBet, a controversial offshore betting website. In 2019, a Sunday Times investigation revealed that 1xBet’s ‘brand had been used to promote betting on children’s sports, cockfighting and a “pornhub” casino with topless women dealing the cards.’

It led to Britain’s Gambling Commission blacklisting the website, and top football clubs that compete in the English Premier League were forced to terminate their sponsorship contracts. Two years later, in October 2021, the online bookmaker was banned in Russia, where it was founded, adding to the growing list of countries that had blacklisted the firm. The other nations included the USA, Cyprus and the Netherlands while, according to Spanish daily AS, the company was also fined in countries like Kenya, Poland, Israel, and the Netherlands for violating laws.

In India, betting companies like 1xBet, Dafabet and FairPlay have tried to gain a foothold by operating under the banner of a ‘professional sportsblog’ to circumvent the rules. Through the surrogate operation, they launched a marketing blitzkrieg and sponsored live broadcasts of matches as well as teams across different leagues.