India’s government to propose blanket ban on real-money gaming

The landscape of online gaming in India is facing a seismic shift as the government prepares to introduce legislation that could effectively ban real-money gaming operations. According to a draft of the proposed law, known as The Promotion and Regulation of Online Gaming Act, 2025, all forms of online games that involve real-money stakes—regardless of whether they are based on skill or chance—would be outlawed. This sweeping legislation aims to prohibit not only the games themselves but also their advertisements and any financial transactions associated with them. The draft explicitly states that banks and financial institutions would be barred from facilitating any transactions related to real-money gaming services, indicating a stringent approach to enforcement. The real-money gaming sector has been the backbone of India’s burgeoning online gaming industry, which reported an impressive $3.8 billion in revenue for the financial year 2023-24, marking a 23% increase from the previous year. Notably, real-money gaming contributed a substantial $2.4 billion to that figure. However, the industry has come under fire due to rising concerns over harm to players, including tragic incidents where individuals have taken their own lives after significant losses in games. Many in the industry attribute these issues primarily to offshore betting platforms that continue to thrive despite governmental efforts to impose restrictions through website blocks and account freezes. In a bold move last year, the Indian government implemented a 28% tax on online gaming, a decision that was met with fierce opposition from industry leaders who deemed it both “catastrophic” and “unconstitutional.” Major investors, including Tiger Global and Kotak, have urged Prime Minister Modi to reassess this tax, warning of potential losses totaling $2.5 billion and the risk of one million job cuts. As the legislative proposal moves forward, it carries the weight of severe penalties for violators. Companies found in breach of the new regulations could face imprisonment for up to three years and hefty fines reaching ₹10 million (around $115,000). Moreover, celebrities endorsing such gaming platforms could be held accountable with similar penalties. Industry insiders are expressing deep concern over the potential impacts of the impending legislation. A founder from a prominent real-money gaming startup indicated that such laws could lead to mass closures of businesses, while investors worry about the consequences for unicorns in the sector. With firms like Dream Sports, Games24x7, and WinZO leading the charge, the stakes are high, as they have collectively raised billions and serve millions of users. Despite exploring opportunities outside India to mitigate the effects of these regulations, startups remain heavily reliant on the domestic market for their revenue. As the proposed bill is expected to be tabled in parliament shortly, the future of real-money gaming in India hangs in the balance, with many stakeholders anxiously awaiting the outcome of this critical legislative process.