Draft Legislation on Online Gaming
The Ministry of Electronics and IT (MeitY) has proposed draft legislation, ‘The Promotion and Regulation of Online Gaming Bill, 2025’, aimed at imposing a blanket ban on all online gaming services where users deposit money to play games with the hope of earning more.
Key Concerns and Objectives
- Addressing allegations of money laundering through online gaming platforms.
- Mitigating national security concerns related to digital wallets, cryptocurrencies, and potential communication channels for terror organizations.
- Preventing offshore entities from evading Indian tax and legal obligations.
Proposed Penalties
- Prohibition on offering online games in India, with a penalty of up to three years imprisonment and a fine of Rs 1 crore for violators.
- Social media influencers promoting such platforms may face two years imprisonment and a penalty of Rs 50 lakh.
- Banks and financial institutions may be banned from facilitating transactions on these platforms.
Industry Impact
- If implemented, it could severely impact the projected $9 billion market of the online gaming industry by 2029.
- The industry is already facing a 28% GST, with potential increases to 40%.
Promotion of E-Sports
- The government aims to promote e-sports as a legitimate competitive sport, distinct from real money gaming.
Regulatory Developments
The Bill envisions the creation of a central authority to promote competitive e-sports, ensure compliance, and support the development of online social games for recreation and education. Online social games may accept payments via subscription or access fees, provided they are not stakes or wagers.
