The Promotion And Regulation Of Online Gaming Rules, 2025: A Comprehensive Analysis

1. Introduction & Background

India's digital gaming landscape has undergone a transformative shift with the enactment of the Promotion and Regulation of Online Gaming Act, 2025 (PROG Act) in August 2025.¹ This landmark legislation, complemented by the Draft Promotion and Regulation of Online Gaming Rules, 2025, represents the government's decisive response to address the complex challenges surrounding online gaming while fostering legitimate sectors of the industry.

The Indian online gaming sector had emerged as a significant economic force, with over 488 million gamers making India the world's second-largest gaming market after China [3]. The industry was valued at approximately ₹35,000 crore in 2024, with real-money gaming (RMG) contributing 85-86% of total revenue. However, this rapid growth came with substantial challenges including gaming addiction, financial losses, money laundering concerns, and potential threats to national security.²

The regulatory vacuum that previously existed in India's online gaming space created fragmented state-level approaches and legal ambiguity. The PROG Act was introduced to establish a uniform national framework that could effectively distinguish between legitimate gaming activities and harmful money-based games.³ According to government estimates, nearly 450 million Indians were adversely affected by money-based games, with cumulative losses estimated at around ₹20,000 crore.⁴

The legislation emerged from pressing concerns about public health and safety, with reports of 47 suicides linked to gaming addiction in Tamil Nadu alone over five years. Additionally, investigations revealed that some gaming platforms were being used for terror financing, money laundering, and illegal messaging, effectively compromising national security.

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2. Recent Developments and Market Reaction

The passage of the PROG Act triggered immediate and widespread reactions across India's gaming ecosystem. Major real-money gaming platforms including Dream11, Mobile Premier League (MPL), Zupee, WinZO, and PokerBaazi suspended their money-based operations immediately following parliamentary approval.⁵

Industry Response and Immediate Impact

Dream11, India's largest fantasy sports platform valued at $8 billion, completely shut down its real- money gaming business, with CEO Harsh Jain informing employees that there was "no legal pathway to continue operations once the law takes effect". The company pivoted to focus on its other businesses including FanCode, DreamSetGo, and Dream Game Studios.

MPL, with approximately 120 million registered users globally, announced the immediate suspension of all gaming offerings involving money while assuring users that existing wallet balances could be withdrawn seamlessly.⁶ Similarly, other major platforms including Zupee, PokerBaazi, and My11Circle implemented similar measures, prioritizing user fund safety while discontinuing paid contests.⁷

Financial Market Impact

The stock market reaction was swift and severe. Shares of listed gaming companies experienced significant declines, with Nazara Technologies falling over 10% to ₹1,253 and Delta Corp sliding 6.75% to ₹86.61 on the day of the bill's introduction. The market capitalization losses reflected investor concerns about the industry's future viability under the new regulatory framework.⁸

Economic Ramifications

The ban is estimated to impact a sector that generated over ₹31,000 crore annually and contributed approximately 40% in taxes. The real-money gaming industry had attracted foreign direct investment exceeding ₹25,000 crore and supported over 200,000 jobs across 400+ companies. Industry projections suggest the ban could result in the closure of approximately 400 companies while rendering the workforce of online money game companies unemployed .⁹

Recent Regulatory Developments

On October 2, 2025, the Ministry of Electronics and Information Technology (MeitY) released the Draft Promotion and Regulation of Online Gaming Rules, 2025, inviting public consultation until October 31, 2025.¹⁰ This represents a significant shift from the government's initial plan to issue rules without consultation, following stakeholder requests for participatory rulemaking.¹¹

3. Key Provisions

The Draft Rules establish a comprehensive regulatory framework organized into eight distinct parts, creating a structured approach to online gaming governance [1] [20] .

Establishment of the Online Gaming Authority of India (OGAI)

The centerpiece of the regulatory framework is the Online Gaming Authority of India, established as a statutory body corporate with perpetual succession and civil court powers [1] [20] . The Authority will be headquartered in the Delhi National Capital Region and may function as a digital office, conducting proceedings without requiring physical presence while retaining powers to summon and examine individuals under oath.

The Authority's composition includes a Chairperson at the rank of Additional Secretary from MeitY (or Joint Secretary in absence), three ex officio Joint Secretary-level members representing Information and Broadcasting, Youth Affairs and Sports, and Financial Services ministries, and two additional Director-level members with at least one having legal expertise.¹²

Powers and Functions of the Authority

The OGAI possesses extensive regulatory powers including determining whether games qualify as online money games, recognizing and registering legitimate games, maintaining the National Online Social Games and E-sports Registry, investigating complaints, issuing directions and penalties, and coordinating with financial institutions and law enforcement agencies

The Authority has the same powers as a civil court under the Code of Civil Procedure, 1908, including summoning witnesses, receiving evidence on affidavit, requiring document production, and issuing commissions for examination. All proceedings are deemed judicial proceedings under the Bharatiya

Game Classification Framework

The Rules establish three distinct categories of online games:

1. Online Money Games: Games involving financial stakes, fees, deposits, or winnings convertible to money, which are completely prohibited.
2. Online Social Games: Games forming part of everyday recreation, primarily skill-based and designed for entertainment, learning, or social interaction, which may operate with or without registration.
3. E-sports: Competitive digital sports requiring strategy, coordination, and advanced decision- making skills, which must obtain recognition under the National Sports Governance Act, 2025.¹⁴

Determination Criteria for Money Games

The Authority will assess games based on specific parameters including whether they involve payment of fees or stakes, whether payments are used as consideration for participation or winning, whether participation requires prior deposits, and whether winnings are redeemable or convertible to money. Any game determined to be a money game faces immediate cessation orders, advertising prohibition, and inclusion in the prohibited games list.¹⁵

Registration and Certification Process

Online social game providers may voluntarily apply for registration, while e-sports providers must apply mandatorily. The Authority processes applications within 90 days, issuing Certificates of Registration valid for up to five years. The registration process requires detailed information including applicant details, game descriptions, target age groups, revenue models excluding stakes or wagers, user safety features, and internal grievance mechanisms.¹⁶

Penalty and Enforcement Framework

The Rules establish a comprehensive penalty structure for non-compliance with directions issued under the Act. Penalties consider factors including quantifiable gains from non-compliance, losses caused to users, repetitive nature of violations, gravity and duration of non-compliance, number of affected users, mitigation efforts, and proportionality requirements. Unpaid penalties are recoverable as arrears of land revenue and credited to the Consolidated Fund of India.¹⁷

Grievance Redressal Mechanism

The framework establishes a three-tiered grievance redressal system. Registered game providers must maintain functional grievance mechanisms for users. Dissatisfied users may appeal to the Grievance Appellate Committee within 30 days, which must resolve appeals within 30 days [20] .

Further appeals may be made to the Online Gaming Authority within 30 days of the Committee's decision.¹⁸

4. Recommendations

While acknowledging the government's legitimate concerns about public welfare and national security, several recommendations emerge for consideration to ensure effective implementation while minimizing adverse economic impacts.

Enhanced Stakeholder Consultation

The current public consultation period until October 31, 2025, represents an important opportunity for comprehensive stakeholder engagement. However, extending this consultation period and creating structured dialogue mechanisms with industry participants, consumer groups, and technology experts could enhance rule quality and implementation effectiveness. Regular review mechanisms should be built into the regulatory framework to adapt to technological evolution and market dynamics.¹⁹

Graduated Implementation Approach

Consider implementing a phased transition period for existing platforms to pivot their business models, potentially reducing unemployment and business closure impacts. This could include grace periods for registered companies to demonstrate compliance with new requirements while maintaining employment levels during transition.²⁰

Economic Impact Mitigation

The government should consider establishing support mechanisms for affected workers and companies transitioning to compliant business models. This could include reskilling programs for industry professionals, tax incentives for companies investing in legitimate gaming development, and support for startups developing e-sports and social gaming platforms.²¹

Regulatory Clarity and Consistency

Provide detailed guidelines and frequently asked questions regarding game mechanics, revenue models, and compliance requirements to reduce regulatory uncertainty. Clear definitional boundaries between permitted and prohibited activities would encourage investment in legitimate gaming sectors while ensuring effective enforcement.²²

Technology and Innovation Focus

Leverage the regulatory framework to position India as a global hub for legitimate gaming development, particularly in e-sports and educational gaming. This could include investment promotion schemes, research and development incentives, and international collaboration frameworks for gaming technology development.²³

Consumer Protection Enhancement

While prohibiting harmful gaming practices, strengthen consumer protection mechanisms for permitted gaming categories through mandatory user verification, spending limits, addiction prevention tools, and robust data protection measures. This balanced approach could address welfare concerns while preserving innovation opportunities.

Monitoring and Evaluation Framework

Establish regular monitoring mechanisms to assess the effectiveness of the regulatory framework in

5. Conclusion

The Promotion and Regulation of Online Gaming Rules, 2025, represents a watershed moment in India's approach to digital gaming regulation. The comprehensive framework demonstrates the government's commitment to addressing legitimate concerns about gaming addiction, financial exploitation, and national security while attempting to preserve space for beneficial gaming activities.

The immediate market reaction and industry response underscore the significant economic implications of this regulatory shift. Major platforms' swift compliance with the new framework, despite substantial revenue losses, reflects both the seriousness of the legislative intent and the industry's recognition of regulatory inevitability.

The establishment of the Online Gaming Authority of India as a specialized regulator with comprehensive powers represents a significant institutional innovation. The Authority's civil court powers, multi-ministerial composition, and digital-first operational approach suggest a sophisticated regulatory architecture designed to address the complex challenges of online gaming oversight.

However, the framework's success will depend critically on implementation quality, stakeholder engagement, and adaptive capacity. The current public consultation process provides an important opportunity to refine rule details and address legitimate industry concerns while maintaining the legislation's core protective objectives.

The economic disruption accompanying this regulatory transformation—affecting hundreds of companies and thousands of jobs—highlights the tension between regulatory protection and economic development. The government's willingness to sacrifice substantial tax revenues from the real- money gaming sector demonstrates prioritization of social welfare over short-term fiscal considerations.

Looking forward, the framework's impact on India's broader digital economy ambitions will be closely watched by investors and policymakers. The explicit promotion of e-sports and social gaming provides pathways for continued industry growth, but realizing this potential will require effective implementation, continued stakeholder dialogue, and supportive policy measures.

The international implications of India's approach may also influence global gaming regulation trends, particularly given India's position as the world's second-largest gaming market [3] . The framework's emphasis on distinguishing between harmful and beneficial gaming activities could serve as a model for other jurisdictions grappling with similar regulatory challenges.

Ultimately, the success of the Promotion and Regulation of Online Gaming Rules, 2025, will be measured not only by its effectiveness in curbing harmful gaming practices but also by its ability to foster a sustainable, innovative, and responsible gaming ecosystem that serves India's broader digital economy objectives while protecting consumer welfare and national interests.

Footnotes

1. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
2. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/aug/doc2025821618101.pdf
3. https://www.grantthornton.in/insights/articles/online-gaming-bill-2025-defining-safer-more-transparent-ecosystem/
4. India's Online Gaming Act 2025 Impact | – The Times of India
5. Online Gaming Bill 2025: Dream11, MPL, Zupee, Gameskraft suspend 'cash' games after Parliament's nod | Latest News India
6. Online gaming law: Will users get Dream11, MPL, Winzo wallet cash? – India Today
7. Online gaming bill 2025: What happens to wallet money; Dream11, MPL, PokerBaazi, Zupee and others outline withdrawal process – The Times of India
8. India's Real-Money Gaming Ban Shakes Dream11, MPL & Nazara | PL Capital
9. ndia's Online Gaming Bill 2025: Overview – S.S. Rana & Co.
10. MeitY releases draft rules for online gaming law, seeks feedback till October 31
11. 5 big takeaways from draft online gaming law: penalties, jail and authority powers | Latest News India
12. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
13. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
14. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
15. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
16. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
17. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
18. https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf
19. MeitY releases draft rules for online gaming law, seeks feedback till October 31
20. https://www.plindia.com/blogs/india-real-money-gaming-ban-shakes-dream11-mpl-nazara/
21. Freed from real-money gaming shadow, esports companies seek rules, sops to up game – The Economic Times
22. Summary: Promotion and Regulation of Online Gaming Act, 2025
23. India RMG Ban Impact on Video Game Industry | Niko Partners

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