Union Minister of Electronics and Information and Technology Mr. Ashwini Vaishnaw introduced a bill in the Lok Sabha today, titled “The Promotion and Regulation of Online Gaming Bill, 2025” (“Bill”) seeking to regulate the online gaming sector. It has defined online gaming to include any games played on an electronic digital device utilising the internet. This Bill is likely to override and replace certain provisions of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 (“IT Gaming Rules”) which previously laid down a regulatory framework for online gaming.
Most significantly, the Bill prohibits the operations of online games that utilise real money, in order to ensure consumer protection from addiction, financial ruin and money laundering perspective. This move is likely to cause large-scale disruptions across the online gaming industry, which happens to be one of India's fastest growing sectors employing over 2 lakh high-skilled persons. The Bill also introduces two additional categories of games for the first time, i.e., “e-sports” and “online social games”. Provisions of the Bill will be enforced by the ‘Authority on Online Gaming' (“Authority”), which is to be created by the Central Government.
Key aspects of the Bill
1. “Online money games” and their prohibition
The Bill defines “online money games” (“OMGs”) as online games, whether of skill or of chance or of both, that are played by paying or depositing fees or money or “other stakes” with the expectation of winning a monetary prize or “other stakes”. The definition explicitly excludes e-sports. Further, the Bill has defined “other stakes” to define real or digital items equivalent to or convertible to money and includes credits and coins which are purchased using money directly or indirectly as a part of an online game.
Notably, under Chapter III titled ‘Prohibition', the Bill has placed a complete embargo on the offering, aiding, abetting, inducing, indulging or engaging in an online money game or an online money gaming service. Further, all advertisements promoting online money gaming have also been banned. In addition to this, banks and financial institutions have been restricted from facilitating or authorising any transactions towards payment of online money gaming services.
Thus, the provisions of the Bill seek to significantly impact the online real money gaming industry, which includes online fantasy sports and online poker and rummy platforms. It also potentially bars Play Stores and App Stores from even offering these applications for download.
Notably, the Bill's all-encompassing ban on OMGs is unlike the regulatory model previously followed by the Ministry of Information and Technology (“MeitY”) under the IT Gaming Rules. The IT Gaming Rules sought instead to permit the functioning of certain “permissible” online real money games after they had received due certification from self-regulatory bodies that were to be constituted under the Rules. However, while the IT Gaming Rules were notified, they were never made operational. Thus, the online gaming industry was operating in an unusual legislative vacuum.
2. Introduction of “e-sports”
The Bill grants formal recognition to e-sports as legitimate competitive sports. It establishes a comprehensive definition that encompasses online games which feature multi-sports events, organized competitive tournaments between individuals or teams in multiplayer formats governed by predetermined rules, and games acknowledged under the National Sports Governance Act, 2025. Additionally, the legislation stipulates that esports outcomes must be determined exclusively through factors such as physical dexterity, mental agility, strategic thinking and similar skillsets.
Crucially, unlike with OMGs, the Bill authorizes specific monetary transactions within esports. However, it maintains strict boundaries. Players can only be made to pay limited registration and participation fees solely to enter competitions or towards administrative costs and winners are permitted to receive performance-based prize money based on competitive achievement. However, all forms of betting, wagering, or staking by any individual are strictly forbidden, including profits derived from such activities.
The Bill mandates that the Central Government in conjunction with the Authority, takes steps to recognize e-sports as a legitimate sporting activity while actively promoting its development. These support mechanisms encompass the development of guidelines and standards for e-sports events, the establishment of training academies, research centres and specialized institutions, the implementation of incentive schemes and public awareness campaigns and collaborations with State Governments and sporting federations for integrated policy implementation. Further, the Bill also calls for assistance to be provided to emerging enterprises developing e-sport technology platforms. This approach seeks to develop e-sports within India's sporting ecosystem while ensuring responsible growth and consumer-protection.
3. Introduction of “online social games”
The Bill introduces “online social games” which do not involve stakes or the expectation of monetary gain. Further, while such games may require access through a one-time subscription fee or access fee (not being stakes or wagers), they are offered solely for entertainment, recreation or skill-development purposes. This category of games has been explicitly differentiated from OMGs and e-sports.
The Bill specifies that the Central Government will take steps to recognise and register online social games with the Authority and promote these games for recreational and educational purposes. Specifically, the Government may take actions like creating a registration mechanism, support the development and distribution of such games and undertake awareness and skill-development programmes to positively promote the sector.
4. Creation of Authority on Online Gaming
Under the Bill, the Central Government has been tasked with creating an Authority to ensure performance of the Bill. The Authority's functions include recognition and categorisation of games and the power to determine whether a game is an OMG, either suo moto or upon receipt of an application.
5. Penalties
The Bill imposes stringent penalties in the event of contraventions. For instance, the offering of online money gaming services could result in imprisonment up to 3 years along with fines up to INR 1 crore. Further, the advertisement of online money games will result in imprisonment up to 2 years along with fines up to INR 50 lakhs. Offences under the Bill are cognizable and non-bailable.
6. Mandatory Compliance with Central Government Directions
Pertinently, under its “Miscellaneous” chapter, the Bill has mandated complete compliance with any directions issued by the Central Government in relation to online money gaming services. Further, non-compliance with provisions of the Act pertaining to online money gaming could result in the Government exercising its blocking powers under Section 69 of the Information Technology Act, 2000.
Additionally, officers authorised by the Central Government have been given the power to conduct investigations, searches and seizures in both physical and digital places and carry out arrests without warrants upon reasonable suspicion.
Takeaways
It is evident from its Statement of Objects and Reasons that the Bill has been introduced with the intention of shielding users from addictive behaviours and preventing financial fraud and related illegalities. The legislation is fundamentally driven by the Government's long-standing commitment to addressing national security concerns and its efforts to prevent money laundering, tax evasion and terror financing operations which have reportedly utilised these platforms as conduits.
Pertinently, the Bill highlights the Government's concerted effort to promote e-sports and online social games in a manner that is lawful, measured and cognisant of the best interests of the youth and the general public. To operationalize this vision, MeitY has engaged the Ministry of Youth Affairs and the Ministry of Information and Broadcasting to create institutional mechanisms that will support these industries and enable their growth. Additionally, in establishing a novel registration framework for e-sports and online social gaming that mandates platform certification prior to operation, the Bill has also essentially introduced a quasi-licensing system.
On the other hand, the legislation damagingly views online real money gaming applications as “predatory” alleging that they exploit young users and foster addictive gaming behaviours. Accordingly, an overall prohibition on their operations, bereft of any exceptions, has been implemented. This regulatory approach creates major uncertainty for the online real money gaming sector, halting its operations and comprising any future prospects.
Owing to the introduction of this new governance framework, the Bill is likely to fundamentally alter how all online gaming platforms operate, demanding enhanced compliance measures and potentially forcing modifications to current game formats.
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