Gaming Gambit

India has long flirted with the idea of regulating online gaming. For years, the industry has grown in a regulatory grey zone, as state governments squabbled with courts over whether games like poker or fantasy sports constituted skill or chance. In April 2023 the IT ministry even introduced rules widely viewed as friendly to industry. Barely two years later, however, the government has executed a dramatic volte-face with the Lok Sabha now passing the Promotion and Regulation of Online Gaming Bill, 2025 within minutes of its introduction. It proposes sweeping bans on real-money gaming, harsh penalties for platforms and their celebrity promoters, and a central regulator to oversee the sector.

The abrupt reversal is justified by ministers on grounds of national security and social harm. They warn of widespread social costs like addiction, indebtedness and the exploitation of vulnerable young and poor players.

The bill is an awkward hybrid of promotion and prohibition. Its architects tout it as a framework to “regulate and promote” gaming. In reality, its provisions fall unevenly across four categories: esports, educational games, social gaming and real-money platforms. The first three are courted, even celebrated. India’s competitive gamers welcome this as a long-awaited breakthrough that could foster investment and infrastructure.

Real-money platforms, by contrast, are targeted with a legislative sledgehammer. A ‘prohibitions’ clause outlaws offering or even promoting such games. Banks and financial firms are forbidden from processing related transactions. Platforms caught violating the law could face fines of up to Rs. 1 crore and jail terms of three years; advertisers may be punished almost as severely.

Real-money games have been among the most lucrative segments of India’s digital economy. By some estimates, the sector could have been worth $9bn by 2029. Instead, the law risks throttling its growth overnight.

India’s approach stands out globally. Other jurisdictions have sought to regulate rather than criminalise. In America and parts of Europe, licensing regimes, age restrictions and tax frameworks have sought to balance innovation with protection. In China, by contrast, regulators have repeatedly cracked down on both real-money games and time-wasting pastimes.

Gambling, online or offline, is a touchy subject across India’s political spectrum. Ruling-party strategists know that opposition to addictive money games plays well among parents and community groups, particularly when couched in terms of protecting the poor from predation. By marrying populist appeal with warnings of terrorist infiltration, the government has given itself a powerful justification for sweeping prohibitions.

Yet, a blanket ban is unlikely to stamp out real-money gaming. It is more likely to push the activity underground, into murkier offshore platforms beyond India’s legal reach. That would exacerbate the very national-security and tax concerns the bill claims to address.

The bill does get one thing right: it offers long-overdue recognition to esports and other non-monetary gaming. If nurtured wisely, the sector could offer jobs, investment and even national prestige. The legislation may score political points today. Whether it creates a safer, better regulated digital economy tomorrow is another game entirely.