What Is The Online Gaming Bill? Inside The Blanket Ban, Big Exemptions, And Industry Fallout

Last Updated:August 20, 2025, 14:16 IST

Government says the Online Gaming Bill will protect users from predatory platforms and financial harm. But companies fear a blanket ban will push users to illegal offshore apps

The government on Wednesday introduced a new bill in the Lok Sabha that seeks to prohibit online money gaming, including advertisements and financial transactions related to such platforms.

The Union government on Wednesday introduced a new bill in the Lok Sabha that seeks to prohibit online money gaming, including advertisements and financial transactions related to such platforms. Titled the Promotion and Regulation of Online Gaming Bill, 2025, the proposed law has triggered strong pushback from the gaming industry, which fears large-scale job losses, revenue disruption, and a shift of users to illegal offshore apps.

Union Minister Ashwini Vaishnaw tabled the Bill amid opposition protests over the ongoing electoral roll revision in Bihar. As MPs raised slogans and waved placards, the government defended the legislation as a necessary step to tackle addiction, fraud, and financial exploitation linked to online money games.

What Does The Online Gaming Bill Propose?

It has five key components:

Ban on online money gaming: The Bill prohibits offering, aiding, abetting, or promoting online money gaming services in India. It includes a complete ban on advertisements and a bar on financial institutions from processing transactions for such platforms.

Applicable to all forms of betting: Importantly, the ban applies to all forms of online betting and gambling, including fantasy sports, poker, rummy, card games, and online lotteries—regardless of whether they are based on skill, chance, or a combination of both.

Criminal penalties: Violations are non-bailable and carry steep penalties. Offering or operating online money games could result in up to three years of imprisonment or a fine of up to Rs 1 crore, while advertising or sponsoring them may attract up to two years in prison or a Rs 50 lakh fine. Financial intermediaries involved in such services face the same penalties as the platforms themselves.

Corporate liability: Under Section 11(3), company directors, managers, and officers may be held personally responsible if offences occur with their consent, connivance, or due to their neglect. Independent or non-executive directors are exempt, provided they were not involved in the decision-making processes related to the offence.

Warrantless search and arrest: The Bill authorises any officer appointed by the central government to enter and search “any place" without a warrant if a person is reasonably suspected of committing or preparing to commit an offence under the Act. The term “any place" is expansively defined to include buildings, vehicles, computer systems, virtual digital spaces, electronic records, and storage devices. They may override security systems and seize data or devices as necessary. These powers are derived from the Bharatiya Nagarik Suraksha Sanhita, 2023.

The government has defended these powers as essential to “curb the growing menace of online money gaming," which it says leads to addiction, financial ruin, mental health disorders, and growing incidents of fraud, money laundering, and even terror financing.

What’s Exempt: eSports And Online Social Games

While the Bill seeks to prohibit money-based gaming, it explicitly draws a line between those platforms and other formats like eSports and online social games. Skill-based multiplayer video games, including those not involving financial stakes, are exempt from the prohibition. The government has also said it intends to promote and regulate such permissible formats to create a healthier online gaming ecosystem.

Government Push For E-Sports And Social Gaming

The Bill lays out a formal mechanism to support safe and constructive digital gaming. The Ministry of Youth Affairs and Sports will take charge of promoting e-sports through dedicated guidelines, training academies, and research platforms. Incentive schemes and awareness campaigns will be launched to integrate e-sports into broader youth and sports policy.

For online social and educational games, the Ministry of Electronics and Information Technology (MeitY) and the Ministry of Information and Broadcasting (MIB) will oversee development and distribution. Games aligned with Indian cultural values, digital literacy, and skill development will be promoted under a central framework.

Online Gaming Authority To Oversee Compliance

The Bill also calls for the creation of a national-level Online Gaming Authority, or the designation of an existing body to oversee implementation. This authority will be responsible for registering and categorising online games, deciding whether a game qualifies as a money game, and addressing complaints and grievances. It will also issue compliance guidelines, codes of conduct, and enforcement protocols.

What Prompted The Government To Act?

In his statement, Minister Vaishnaw said that online money gaming platforms often encourage compulsive behaviour, especially among younger users, leading to debt traps, mental health issues, and in extreme cases, even suicides. The government views this legislation as a preventive intervention, particularly as smartphone penetration grows in Tier 2 and Tier 3 cities.

Beyond public health concerns, the Centre also highlighted national security threats, stating that such platforms have been used for financial fraud, money laundering, and even terror financing and encrypted communication.

What Is The Industry Saying?

The online gaming industry, which employs over 2 lakh skilled professionals and has attracted Rs 25,000 crore in foreign investment, is warning that the proposed ban could cripple a growing sector.

Three major industry bodies—the All India Gaming Federation (AIGF), E-Gaming Federation (EGF), and Federation of Indian Fantasy Sports (FIFS)—have jointly appealed to Home Minister Amit Shah for urgent intervention.

Their primary concern is that a blanket ban on online money gaming could inadvertently push crores of genuine users toward illegal offshore platforms, increasing the risk of user exploitation and reducing regulatory oversight.

According to a Times of India report, the industry fears the collapse of nearly four lakh companies, loss of lakhs of jobs, and an annual hit of Rs 20,000 crore to the government’s GST collections. Executives from leading gaming firms told TOI that many platforms might have to shut down altogether, given the absence of a revenue model under the proposed law.

Another significant concern revolves around the role of fantasy gaming companies in sports sponsorship. Executives argue that platforms operating real-money skill-based games are among the main sponsors of domestic leagues, particularly in cricket. Without their financial support, they warn, the grassroots talent pipeline in Indian sports could weaken.

Prominent companies in the sector, including Dream11, Gameskraft, MPL, Games24x7, Nazara Technologies, Zupee, and WinZO, have also clarified that they do not engage in betting, gambling, money laundering, or terror financing. They assert that their operations are fully legal and regulated, with revenues built around skill-based real-money games.

Key Concerns Raised By Industry Experts

Experts in the sector say the Bill lacks clarity on whether skill-based money games—like fantasy sports or casual paid competitions—will be considered illegal. These formats have historically been recognised by courts as distinct from gambling, but the current draft makes no specific exemptions for them. This grey area has left companies and investors anxious.

The absence of a transition plan has also sparked alarm. Executives argue that if the law is enacted, there must be clear protocols for winding down operations, refunding user balances, and safeguarding jobs. Without these, abrupt shutdowns could create chaos for millions of users and employees.

There are also fears that legitimate Indian platforms may be forced to relocate operations offshore to avoid legal risks. This could open the door to unregulated foreign apps with poor security and minimal user protection, increasing consumer vulnerability. Industry voices suggest that instead of banning, India could follow models used in the UK, US, and Australia, which regulate online gaming through licensing, compliance audits, and advertising restrictions.

They also point out that India already had a regulatory start in 2023, when the Centre introduced rules requiring self-regulatory organisations to vet real-money games before they could be offered. Instead of scrapping that system, they say, the government should build on it with tighter supervision.

What Happens Next?

The Bill was introduced on Wednesday in the Lok Sabha and is expected to be debated in the current session. If passed, it would become India’s first central legislation on online gaming. The government has so far held firm on the need for a strong regulatory crackdown, but with industry groups raising alarms and legal challenges likely, it remains to be seen whether the final version of the law will reflect any of the concerns voiced by stakeholders.

Karishma Jain

Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar...Read More

Karishma Jain, Chief Sub Editor at News18.com, writes and edits opinion pieces on a variety of subjects, including Indian politics and policy, culture and the arts, technology and social change. Follow her @kar...

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August 20, 2025, 14:11 IST

News india What Is The Online Gaming Bill? Inside The Blanket Ban, Big Exemptions, And Industry Fallout

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