On 22 August 2025, the Central Government enacted the Promotion and Regulation of Online Gaming Act, 2025 ("Gaming Act"). The Bill was passed by Parliament with remarkable speed, within seven minutes in the Lok Sabha and twenty-six minutes in the Rajya Sabha, before receiving Presidential assent the following day. The Gaming Act provides for the promotion of e-sports and online social games, while prohibiting online money games involving stakes or wagers for monetary gain. It also establishes a regulatory authority to oversee the sector and sets out stringent penalties for violations.
Recognition and Promotion of E-Sports and Social Games
The Gaming Act empowers the Central Government to formally recognise e-sports as a legitimate competitive sport. It may issue guidelines, establish training academies, provide incentives, and coordinate with States to promote such activities. Online social games designed for entertainment or educational purposes and not involving monetary stakes are also to be facilitated through registration mechanisms, awareness initiatives, and institutional support programmes.
Definitions under the Act
The Act introduces the following key definitions:
- Online game: any game offered on a digital platform.
- E-sport: skill-based competitive events without wagering.
- Online social game: non-wagering, entertainment, or skill-development based online games.
- Online money game: any game involving fees, deposits, or stakes in expectation of monetary or equivalent returns, excluding e-sports.
Recognition and Promotion of E-Sports and Social Games
The Gaming Act empowers the Central Government to recognise e-sports as a legitimate competitive sport through guidelines, training academies, incentives, and coordination with States. Both e-sports and online social games are subject to registration with the designated Authority, which may impose technical and playerprotection standards. Online social games for entertainment or educational purposes without monetary stakes will be promoted through registration mechanisms, awareness initiatives, and institutional support.
Prohibition of Online Money Games
The Gaming Act imposes a complete prohibition on offering, operating, advertising, or participating in online money games, including those offered from foreign jurisdictions. Banks and financial institutions are also prohibited from facilitating related transactions.
Penalties for violations:
- Up to three years' imprisonment and fines up to ₹1 crore for offering online money games or facilitating funds for online money games.
- Up to two years' imprisonment and fines up to ₹50 lakh for advertising online money games.
- Enhanced punishments for repeat offences.
Non-compliance with directions may lead to penalties up to ₹10 lakh, suspension, or cancellation of registration. Offences under the prohibition of online money games are cognizable and non-bailable, and company officers may also be held liable. The Act further empowers investigation, search, and seizure (including of digital resources), and blocking of non-compliant services.
Authority and Regulatory Oversight
The Central Government may establish or designate an Authority to classify games, register permissible ones, address complaints, and issue directions.
MHCO Comment
The Gaming Act provides a comprehensive framework for the regulation of online gaming in India. It balances the encouragement of e-sports and social games with stringent restrictions on money-based gaming. However, the Gaming Act has already had a disruptive impact on the industry asleading platforms such as WinZO, Dream11, MPL, and PokerBaazi have already suspended their real-money offerings immediately following the enactment of the said Act, in a sector employing over 20 million people. By effectively shutting down the largest revenue-generating segment of the online gaming industry, the Gaming Act is eroding the growth in the sector. We believe that the Central Government ought to have issued market policy consultation papers and taken public comments before drastically resorting to passing the Gaming Act in such a hasty manner.
This article was released on 25 August 2025.
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