Online Gaming Legislation in India

The Promotion and Regulation of Online Gaming Bill, 2025 has been enacted into law, responding to the growing concerns over online gaming in India. 

Key Aspects of the Act

• Classification of Online Games:
  • The Act categorizes online games into three segments: e-sports, social gaming, and Real Money Games (RMGs). 
  • All forms of RMGs are banned, including related advertisements.
  • An online money game is defined as one involving fee-payment or monetary stakes.
• Impact on Industry:
  • The RMG industry warns of potential job losses affecting over two lakh jobs across 400+ companies.
• Punitive Measures:
  • Offering or promoting online money games could lead to imprisonment (up to three years) and/or fines (up to ₹1 crore).
  • Unlawful advertisement of these games could result in imprisonment (up to two years) and/or fines (up to ₹50 lakh).
• Regulatory Framework:
  • The government can constitute a regulatory authority to oversee online games.
  • The IT Ministry has amended rules to treat gaming firms as intermediaries, requiring KYC compliance.

Concerns and Challenges

• Financial Concerns:
  • Government data suggests Indians lose around ₹15,000 crore annually due to RMGs.
  • Reports of tax evasion and financial fraud linked to online gaming firms.
• Social and Psychological Impact:
  • WHO links gaming to compulsive behavior and psychological distress.
  • 32 reported suicides in Karnataka over 31 months due to gaming addiction.
• Legal and Regulatory Challenges:
  • Gaming companies may use VPNs to bypass restrictions.
  • State List entries in the Constitution place betting and gambling under State jurisdiction, creating inconsistencies.

Judicial and Constitutional Aspects

• Supreme Court Involvement:
  • The SC has stayed notices issued to gaming companies regarding tax evasion.
  • The Court is yet to decide if games like Rummy and Fantasy Sports are skill-based or gambling.
• Constitutional Concerns:
  • The Act's lack of distinction between games of skill and chance is considered a violation of Article 19 (1) (g).