Introduction
On 20th August, 2025, the Ministry of Electronics and Information Technology ("MeitY") announced the Promotion and Regulation of Online Gaming Bill, 2025 ("the Act"), a significant legislative milestone which has since received the President's assent and become an Act. The Act (i) regulates the rapidly growing online gaming sector; and simultaneously (ii) imposes a blanket prohibition on online money games and gaming services. In doing so, the Act considers the deleterious and negative impact of online money games on Indian citizens, addressing concerns around online gambling and the need for regulation.1 This Act will come into force only by way of notification by the Central Government ("CG")2 and applies to all online games in India, irrespective of whether such platform is hosted offshore or within Indian territory.3
Features of the Act
The Act deals with the promotion and regulation of e-sports and online social games, but most of the regulation relating to the same has been delegated to the CG to make rules upon.4 However, the Act does prohibit offering of "online money games."5
Under the Act, online games are afforded a broad definition under Section 2(f), encompassing any game played on a digital device and managed by software whether through the internet or any other technology facilitating electronic communication. Online games are sub-divided under the Act into three categories, namely (i) online money games; (ii) online social games; and (iii) e-sports; of which only the first is prohibited. Section 5 of the Act prohibits offering of online money games and related gaming services, with a penalty for non-compliance of up to three years' imprisonment or one crore rupees fine or both. Even advertisement of online money games is prohibited under Section 6, while banks and financial institutions are prohibited from facilitating online transactions related to payment for online gaming services under Section 7. Therefore, it becomes crucial to understand what constitutes an "online money game" under the Act.
Classification of Online Games
"Online money games" are defined under Section 2(g) of the Act as any online game which, irrespective of the element of skill or chance, is played by a user making a payment in expectation of winning. Such a payment can be made in the form of fees, depositing of money or any other stake such as coins or tokens which are convertible to money. What is most notable about this definition is that there is no exception carved out for games of skill, which has till date been the case for gambling regulations in India. To determine whether an online game is an online money game or not based on this definition, the determining element should be whether a payment was made, in whatever form, with the expectation of winning. However, exactly how strictly this provision will be interpreted would depend on the Authority (defined hereafter) to be constituted under the Act.
Under Section 3 of the Act, the CG is obligated to set up an authority ("Authority") for performing functions laid down under the Act. Although no such Authority has been notified as of yet, under Section 3(2)(b) such Authority shall have final say on categorization of an online game into one of the categories mentioned above. This Authority is also tasked with the regulation, recognition and registration of online social games and e-sports alike.
"Online social games" are those online games offered solely for entertainment, recreation and skill-development purpose which do not involve staking of money but may allow access through payment of a subscription fee.6 These differ from online money games in respect of the fact that no stake or wager is being made for an online social game.
On the other hand, "e-sports" are online games recognized under the National Sports Governance Act, 2025 and registered by the Authority. For classification of an e-sport, aside from the prohibition of a stake or wager being involved, outcome of such e-sports must be solely determined by factors such as physical dexterity, mental agility, strategic thinking or other similar skills.7 The Act does, however permit payment of registration or participation fees for e-sports8 and also specifies that "e-sports" are excluded from "online money games."9
Pending Notifications and Development of the Rules
Before the Act can be fully implemented and put in force, three crucial notifications are awaited, namely (i) a notification laying down the commencement date for enforcement of the Act, (ii) a notification laying down the rules and procedures drafted by the CG; and (iii) a notification by the CG constituting the Authority to oversee implementation of the Act and rules thereunder. According to the Secretary of the MeitY, work on drafting of rules under the Act has already commenced. These rules will cover (i) framework for regulation of e-sports and online social games; (ii) constitution of the Authority; and (iii) classification mechanisms for gaming categories.10 The Secretary also emphasized on the social evil around online money games, discussing the possibility of bringing into effect the prohibition under Section 5 before the rest of the Act is enforced. It was further asserted that such rules would be finalized well within the next six months.11
Conclusion
India's real money gaming sector is estimated to be worth Rs 30,000 crore (about $3.7 billion)12, supporting over 2,00,000 jobs across 400 companies.13 Industry bodies have raised concerns about lead the potential job losses and the closure of many companies. The government, however, is firm in its position that online money games are a major problem for society, prioritizing people's welfare. It is estimated that the online gaming industry causes losses of Rs. 20,000 crores to over 45 crore citizens annually.14
This Act signifies a decisive shift in India's approach to digital gaming and gambling. Although the Act has not been enforced yet, companies such as Dream11 and Pokerbaazi have already stopped offering online money gaming services on their respective platforms.15 This highlights the recalibrations that companies engaging in online money games must take to comply with the new legislation. Before the Act was introduced, such platforms were exempted from gambling laws because they were classified as "games of skill." Games of skill are games where the factor of skill plays a greater role in determining the outcome of the game, as opposed to chance.16 The Act, however, bans the offering of all online money games, including games of skill. The actual impact of the Act, however, may only be assessed basis the rules to be drafted and the establishment of the Authority by the CG. Section 16 permits authorized officers to arrest without a warrant if they possess 'reasonable suspicion.' Therefore, until the rules are drafted and further developments are made, industry leaders should remain cautious and adaptive to the changing regulatory landscape.
Footnotes
1. Aims and objectives under the Act.
2. Section 1(3) of the Act.
3. Section 1(2) of the Act.
4. Sections 3, 4, 8 and 19 of the Act.
5. Section 5 of the Act.
6. Section 2(h) of the Act.
7. Section 2(c) of the Act.
8. Ibid.
9. Section 2(g) of the Act.
10. Section 19(2)(c) of the Act & Business Standard, 2025. Govt plans to enforce prohibition clauses first post Online Gaming Bill nod. [online] Available at: https://www.business-standard.com/india-news/govt-plans-to-enforce-prohibition-clauses-first-post-online-gaming-bill-nod-125082200551_1.html [Accessed 25 August 2025].
11. Business Standard, 2025. Govt plans to enforce prohibition clauses first post Online Gaming Bill nod. [online] Available at: https://www.business-standard.com/india-news/govt-plans-to-enforce-prohibition-clauses-first-post-online-gaming-bill-nod-125082200551_1.html [Accessed 25 August 2025].
12. India Today, 2025. Jobless overnight, but families to feed: The human cost of India's gaming ban. [online] Available at: https://www.indiatoday.in/sunday-special/story/real-money-gaming-blanket-ban-real-promotion-regulation-of-online-gaming-bill-2025-employment-lakhs-revenue-2775531-2025-08-24 [Accessed 26 August 2025]
13. New Indian Express, 2025. Ban on real-money online games shakes up the entire industry. [online] Available at: https://www.newindianexpress.com/explainers/2025/Aug/24/ban-on-real-money-online-games-shakes-up-the-entire-industry [Accessed 26 August 2025]
14. Economic Times, 2025. Govt estimates 45 cr people lose about Rs 20,000 cr annually from real money gaming.[online] Available at: https://economictimes.indiatimes.com/news/india/govt-estimates-45-cr-people-lose-about-rs-20000-cr-annually-from-real-money-gaming/articleshow/123408237.cms?from=mdr [Accessed 26 August 2025]
15. Reuters, 2025. India's Dream11, top gaming apps halt money-based games after ban. [online] Available at: https://www.reuters.com/world/india/indias-dream11-top-gaming-apps-halt-money-based-games-after-ban-2025-08-22/ [Accessed 25 August 2025].
16. State of Bombay v. RMD Chamarbaugwala AIR 1957 SC 699.
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