The Lok Sabha on August 20, 2025, passed the Promotion and Regulation of Online Gaming Bill, 2025 which received the President's assent on August 25, 2025 ("Act").
Online gaming has evolved as one of the most dynamic and fastest-growing segments of the digital and creative economy. Over the course of the last decade, India has seen a surge in online games and litigations arising therefrom. A study conducted by the Federation of Indian Fantasy Sports in collaboration with KPMG reported that the user-base of fantasy sports grew from 2 million in 2016 to 90 million in 20191. This rapid increase was supported by the growing smartphone and internet penetration coupled with adoption of digital payments.
With the rise in online gaming came a noticeable gap in the legislative infrastructure to support the industry. This resulted in a plethora of litigations at all levels across the country, specifically against Dream11, one of the largest online fantasy game platforms in India, with the primary issue being whether the game is that of chance or skill. In 2021, the Supreme Court finally held that fantasy sports involve a substantial degree of skill and judgment and cannot be considered games of chance.2 However, the Act states that irrespective of the fact whether the game is of skill or chance, if the games are being played online by paying a certain fee or depositing money with the intent to collect monetary winnings, such games are completely prohibited.
Article 19 (1) (g) of the Indian Constitution provides that all citizens have the right to practise any profession or carry on any occupation, trade or business. The purpose of using analogous and overlapping words is to provide for all possible means through which a livelihood can be earned.3 The right is controlled by article 19 (6), which authorises the legislature to impose reasonable restrictions in the interest of public. Such restrictions would vary subject to the nature of the trade. The restrictions imposed must reflect the underlying purpose, the extent and urgency sought of the issue to be remedied, disproportion of the imposition and prevailing circumstances.4 Human trafficking, gambling, trading in poisonous substances or any patently criminal and vicious activities, which are harmful to the very fabric of society are prohibited completely and cannot seek protection under Article 19 (1) (g).
Gambling, under the Finance Act, 1994 is defined as "putting on stake something of value, particularly money, with consciousness of risk and hope of gain on the outcome of a game or a contest, whose result may be determined by chance or accident, or on the likelihood of anything occurring or not occurring"5. The question of whether gambling constitutes trade or business and is thus protected under Article 19 (1) (g) of the Constitution arose in the State of Bombay v. R.M.D. Chamarbaugwala6. It was held that criminal activities cannot be pursued with the purpose of earning profits and gambling as an activity is res extra commercium and therefore is not protected under Article 19 (1) (g). However, commercial activities which are not anti-social or criminal in nature and competitions or games which require even a jot of skill or knowledge, would continue to be protected. Thus, the differentiating factor is whether the game under question is that of skill or chance, the difference between the two being that of a commercial contract and a wagering contract7.
In its analysis, the Punjab and Haryana High Court8 stated that any competition where the success of the participant is subject to a substantial degree of skill, such a competition is not gambling. It was further held that the online gaming platform under question, Dream11, required considerable skill, judgement and discretion, requiring the participants to evaluate the athletes, analyse the prevalent rules and regulation while undertaking team selection by the participant and thus, has predominant influence of skill. This was reiterated by the Bombay High Court9, further stating that the result in a fantasy game is not subject to the outcome of the game being played in reality and thus cannot be considered as gambling or betting.
While, the Act was introduced to promote and regulate the online gaming sector including e-sports, educational games and social gaming, the complete prohibition of such games which include an element of skill has come as a blow to the fantasy gaming community and industry in India. The statement of objects to the Act provide that the need to regulate arises from linkage with financial fraud, money-laundering, tax evasion, and in some cases, the financing of terrorism, manipulative design features, addictive algorithms, leading to financial distress to the players.
Any restriction so imposed on the exercise of rights available under Article 19 (1) (g) in the interest of general public must be reasonable. Unless the legislation curtailing or excessively invading the right is able to achieve proper balance between the freedom being granted under Article 19 (1) (g) and the restrictions permitted under Article 19 (6), such a legislation cannot have the characteristic of reasonability.10 There has to be a direct proximate nexus or reasonable connection between the restrictions imposed and the object sought to be achieved. Strong nexus between the applicable restrictions and the object of the legislation will create a strong presumption in favour of the constitutionality of the legislation.11 Further, moral principles cannot put a constrain on the extent of rights exercisable, only provide guidance for imposing reasonable restrictions.12
In a December 2020, the NITI Aayog issued a draft for discussion which laid down the guiding principles for online fantasy sports platforms in India, recognised the requirement for regulatory development in online fantasy gaming industry in India to ensure transparency and platform's integrity, suggesting that such platforms should be required to obtain approvals from an independent evaluation committee, which will evaluate the platform to determine if it is skill based or advertisement for gambling services or game of chance. Further, an accessible and uniform dispute resolution forum should be established which will not only benefit the consumers but also save the online fantasy game platforms from repeated challenges against the legality of the nature of business undertaken by them.13
The Act has not been received well by the industry. Post enactment, certain gaming platforms have announced lay-offs14, while others have approached relevant high courts questioning the constitutional validity of the Act and potential negative impact on the industry.15 Introducing a blanket ban and roping in games which require exercise of skill is opposed to the judicial position established in relation to such games and detrimental to the growth of e-sporting industry in India. While the Act recognises that the absence of a comprehensive legislative framework has hindered structured development in the sector, promotion of responsible gaming practices in line with the judicial precedents will ensure systematic advancement of the online gaming industry in India with measured progression, instead of a disruptive overhaul.
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Footnotes
1 KPMG, Federation of Indian Fantasy Sports, The Business of Fantasy Sports, July 2020, https://fifs.in/wp-content/uploads/2020/07/Business-of-fantasy-sports_Final.pdf, (accessed August 28, 2025)
2 Avinash Mehrotra v. The State of Rajasthan, SLP (C) No. 18478/2020
3 Sodan Singh v. New Delhi Municipal Committee, (1989) 4 SCC 155
4 Madras v. V.G. Row, (1952) SCR 597
5 Section
6 State of Bombay v. R.M.D. Chamarbaugwala, 1957 AIR 699
7 Varun Gumber v. Union Territory of Chandigarh and Ors., 2017 SCC OnLine P&H 5372
8 ibid
9 Gurdeep Singh Sachar v. Union of India and Ors., 2019 SCC OnLine Bom 13059
10 Chintaman Rao v. M.P., (1950) SCR 759
11 MRF Ltd. v. Inspector Kerala Government, (1998) 8 SCC 227
12 Krishan Kumar Narula v. State of J&K, AIR 1954 SC 220
13 NITI Aayog, Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India – Draft for discussion, December 2020, https://niti.gov.in/sites/default/files/2020-12/FantasySports_DraftForComments.pdf, (accessed August 28, 2025)
14 Nishit Singh Raghuvanshi, Online Gaming Bill 2025: MPL To Layoff 60 Per Cent Of Its Workforce, Here Is Why, TimesNow, September 1, 2025, https://www.timesnownews.com/technology-science/online-gaming-bill-2025-mpl-to-layoff-60-per-cent-of-its-workforce-here-is-why-article-152572170 (accessed September 2, 2025)
15 Nimitt Dixit, No stay on India's online gaming ban as A23 mounts legal challenge, Legal World by Economic Times, August 30, 2025, https://legal.economictimes.indiatimes.com/news/litigation/no-stay-on-indias-online-gaming-ban-as-a23-mounts-legal-challenge/123597838 (accessed September 2, 2025)
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