1. INTRODUCTION
Marking a pivotal move that is set to reshape India's online real-money gaming sector valued upwards of USD 3.7 billion,1 the Indian Government notified the Promotion and Regulation of the Online Gaming Act, 2025 ("Gaming Act 2025") on August 22, 2025, in the official Gazette. The legislation delivers a major blow to the online real-money gaming ("RMG") industry by imposing a blanket ban on online games involving real money or other stakes. The ban extends to advertisements related to RMG and facilitation of fund transfers in relation to RMG. This signals a transformative regulatory shift that will fundamentally alter business models, revenue streams, and the overall future of online gaming in India. The Gaming Act 2025 has not yet come into force, but it is expected to take effect soon.2
On the plus side, the Gaming Act 2025 provides statutory recognition to e-sports and recreational online games while enabling the Central Government to regulate them through a designated authority.
2. KEY PROVISIONS OF THE ACT
- Extra-territorial Applicability: The Gaming
Act 2025 applies to the whole of India and also extends to any
"online money gaming service" which is offered within the
territory of India even if operated from outside the territory of
India.3
Accordingly, offshore online RMG platforms that are accessible by users in India will also be subject to the prohibitions under the Gaming Act 2025. Importantly, the Gaming Act 2025 does not intend to apply to offshore non-RMG operators offering recreational, educational, and skill-development games.
- Prohibition of online money games: All online
money games (skill or chance-based or both) which are played by
depositing money or "other stakes", where the player
expects to earn monetary rewards or other rewards with monetary
value, have been prohibited under the Gaming Act 2025. This
prohibition applies to offering, aiding, abetting, inducing, or
otherwise indulging or engaging in the offering of online money
games or related services.4 The Gaming Act 2025 broadly
defines "other stakes" to mean anything recognised as
equivalent or convertible to money, and includes credits, coins,
tokens, or objects (real or virtual) which is purchased by paying
money directly or by indirect means or as part of an online
game.5
- Regulation of e-sports: The Gaming Act 2025
seeks to regulate and promote e-sports, i.e., competitive digital
sports not involving bets, wagers, or stakes, requiring strategy,
coordination, and decision-making skills which are duly
recognised under the National Sports Governance Act,
2025.6 E-sports may be required to be registered with
the online gaming authority7 which will be established
under the Gaming Act 2025.8
- Regulation of online social games: The Gaming
Act 2025 also recognizes and regulates online social games played
for entertainment, recreation, or skill development purposes that
could be skill or chancebased, and do not involve staking of money
or other stakes.9 However, charging a subscription fee
for playing online social games has been permitted.
- Advertising online money games: The Gaming Act 2025 prohibits
advertisements10 that directly or indirectly promote
online RMGs or induce any person to play an online RMG or indulge
in any activity promoting online RMG.11
- Facilitating transactions or funding: Engaging in, permitting,
aiding, abetting, inducing, or otherwise facilitating the transfer
of funds to facilitate any transaction or authorisation towards
payment for online money gaming services by banks and financial
institutions or other facilitators has also been
prohibited.12
- Penalties:
A
- Regulatory oversight and blocking: All persons are required to comply with any direction issued by the Central Government in relation to online money gaming services.13 The Central Government has also been given the authority to issue blocking orders with respect to any information "generated, transmitted, received or hosted" in relation to online money gaming.14 Further, the Central Government may authorize any officer to conduct investigations of any physical or virtual place, including virtual digital spaces, for any of the offences under this Gaming Act 2025,15 including powers of search and seizure and arresting without obtaining a warrant.16
3. AFFECTED STAKEHOLDERS
3.1 Online RMG Operators
3.1.1 The Gaming Act 2025 renders a fatal blow to any direct or indirect offerings of online RMG platforms by Indian as well as overseas operators. This would mean the end of any type of games, contests, rounds, matches, hands, etc. that require an initial stake/wager where a player expects to win monetary or other rewards, even if the ultimate game is played predominantly on skill.
3.1.2 Offshore RMG operators would have to ensure their RMGs are not accessible online in India. Measures such as geo-blocking may be adopted. This is especially important for offshore operators who may have back offices or R&D centers in India, which may be directly affected by any investigations into violations under the Gaming Act 2025. Government-authorized officers under the Gaming Act 2025 have been given broad powers of search and seizure in both physical and virtual spaces.17 This could mean gaining access to the source code, development, and live environment of the online RMG platform, etc. Such access may be through overriding any access control or security code, if necessary, as may be the case with the investigation of "virtual digital spaces" under the incoming Income Tax Act, 2025.18 While the Gaming Act 2025 does not define a "virtual digital space", the definition provided under the Income Tax Act, 2025, includes social media accounts, email servers, online banking and trading accounts, cloud storage platforms, remote servers, and digital apps.19 It remains to be seen how such investigations will be practically carried out by the authorities virtually under the Gaming Act 2025.
3.1.3 RMG operators in India or offshore offering online games to users in India would have to move to alternate free-to-play models or subscription fee models without prize pools contributed to by users. It should also be noted that any money that is deposited or stakes that are paid directly or indirectly to an online platform can also be deemed a prohibited online RMG, where any expectation of winnings is involved. The sweeping prohibition language means that, say, any virtual points that are offered as a free bonus when a user pays a subscription and which may be used to enter a free game with prizes, may also be up for debate to be a prohibited online RMG. Another broad application of this prohibition would be that any virtual objects or tokens (such as in-game objects, skins, etc.) which can be traded between the platform or house or with other players can also be deemed a stake inadvertently in a game which offers rewards for winning. However, games which ultimately do not offer any rewards to players that may be linked to winning, trading of such virtual objects for the purpose of gameplay (i.e., for moving to the level or unlocking a new character/feature) should be permissible. RMG operators may have to be wary of such risks once the Gaming Act 2025 is in force.
3.2 Game Studios, Federations, and Gaming Tournament Operators
3.2.1 The Gaming Act 2025 gives e-sports legal recognition and legitimacy. For the e-sports industry, the Gaming Act 2025 allows for positioning e-sports as a high-skill, competitive sport instead of a mere gambling or entertainment product. With e-sports set for its debut in the 2027 Olympic Esports Games,20 the legislation offers the industry formal recognition, marking a new era for gaming in India.
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Footnotes
1. India's online gaming sector may cross $9 billion by 2029: Report (Economic Times, March 19, 2025), available at https://economictimes.indiatimes.com/tech/technology/indias-online-gaming-sector-may-cross-9-billion-by-2029- report/articleshow/119209014.cms?from=mdr (Last accessed on September 16, 2025).
2. Enactment of the Gaming Act may also be subject to constitutional challenges that are currently pending before Indian courts. Please see paragraph 5.1 below for more information.
3. Section 1(2), Gaming Act 2025.
4. Section 5, Gaming Act 2025.
5. Section 2(1)(j), Gaming Act 2025.
6. Section 2(1)(c), Gaming Act 2025.
7. To be established under Section 8, Gaming Act 2025.
8. Section 2(1)(c)(iii) read with Section 3(1), Gaming Act 2025.
9. Section 2(1)(h)(i), Gaming Act 2025.
10. The definition of "advertisements" under the Gaming Act has been adopted from the Consumer Protection Act, 2019, which defines "advertisements" to mean any audio or visual publicity, representation, endorsement or pronouncement made by means of light, sound, smoke, gas, print, electronic media, internet or website and includes any notice, circular, label, wrapper, invoice or such other documents.
11. Section 6, Gaming Act 2025.
12. Section 7, Gaming Act 2025.
13. Section 13, Gaming Act 2025.
14. Section 14, Gaming Act 2025.
15. Section 15, Gaming Act 2025.
16. Section 16, Gaming Act 2025.
17. Section 15 and Section 16, Gaming Act 2025.
18. Introduced vide Income-tax (No. 2) Bill, 2025, which was passed by the Parliament on August 12, 2025. The Income Tax Act, 2025, will come into force on Aril 1, 2026.
19. Section 261(j), Income Tax Act, 2025.
20. Inaugural Olympic Esports Games to be held in Riyadh in 2027 – Road to the Games to start this year (International Olympic Committee, September 11, 2025), available at https://www.olympics.com/ioc/news/inaugural-olympic-esports-games-to-beheld-in-riyadh-in-2027-road-to-the-games-to-start-this-year (Last accessed on September 16, 2025).
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