"Concerns that a ban on real money gaming in India will push users towards unregulated platforms are realistic and significant"

India’s online gaming industry, once celebrated for attracting billions in investment and generating thousands of jobs, now faces one of its most disruptive legal changes in recent memory. A new bill, which quickly passed through Parliament and received Presidential approval over the last few weeks, has upended the regulatory sector by imposing a complete ban on real-money online games.

The new law, formally titled the Promotion and Regulation of Online Gaming Act, 2025 (PROGA), sweeps away the longstanding distinction between games of skill and games of chance that courts had recognized for decades. With strict penalties for operators, advertisers, financial intermediaries, and even celebrities who endorse such platforms, PROGA has raised questions about its economic consequences, its impact on India’s digital innovation ecosystem, and whether prohibition will curb or merely displace gaming activity.

To understand the legal and commercial ramifications of this sweeping policy shift, Yogonet spoke with Vidushpat Singhania, Managing Partner at Krida Legal, who shared his insights on the law’s implications, the likely fallout, and the road ahead for India’s gaming and e-sports sectors.

The Promotion and Regulation of Online Gaming Bill, 2025, marks a complete shift in India’s gaming policy. From a legal perspective, how do you interpret this move, especially in light of earlier judicial recognition of skill-based games? 

The Promotion and Regulation of Online Gaming Bill, 2025, was passed by both Houses of Parliament, received Presidential assent, and was published in the Official Gazette on 22.08.2025, thereby becoming the Promotion and Regulation of Online Gaming Act, 2025 (“PROGA”/ “the Act”). The PROGA indeed represents a stark change of stance in India’s gaming policy by imposing a complete ban on online money games.

Previously, by virtue of various judicial pronouncements, games of skill being offered for stakes had been protected as a legitimate business activity under Article 19(1)(g) of the Constitution of India. However, contrary to the previous regime, the distinction between chance and skill-based games has been entirely discarded under the PROGA, with all forms and manners of online money gaming services in India being outrightly prohibited and violators being liable to hefty penalties.

The PROGA centralizes regulatory control and treats all online money games alike, based on the Government’s view that social harms like gambling addiction and financial ruin far outweigh the skill-chance debate.

This shift in regulatory stance through the PROGA, while noteworthy for seeking to prevent gambling-related social harm and evil, will have to be tested against the established judicial principles on gaming and the right to offer skill-based gaming services for stakes that have been laid down over the years through a catena of judgments. It is to be noted that as of this moment, the matter is currently sub-judice before the Hon’ble Supreme Court of India, which will decide upon the validity of the PROGA. 

The law imposes strict penalties on operators, advertisers, and even celebrities. Do you see these measures as proportionate safeguards or as overreach that could stifle legitimate industry activity? 

As indicated earlier, under the provisions of the PROGA, any and all forms of online real-money gaming services are now prohibited in India, as is their advertising or financial facilitation in any manner whatsoever. The strict penalties imposed on operators, advertisers, financial intermediaries, and even celebrities who may seek to promote such online money games or gaming services in India reflect the Government’s firm deterrence strategy aimed at eliminating prohibited activities entirely.

In such a scenario, the penalties prescribed under the PROGA will certainly act as a deterrent for any stakeholder who seeks to either be involved in offering, aiding or abetting prohibited forms of online gaming; creating or disseminating advertisements for such services or is otherwise involved in such services from a financial perspective (i.e. either facilitating transactions or authorising funds for online gaming services) in India.

The large quantum of fines, coupled with imprisonment, is among the harshest penalties globally. These are rigid sanctions designed to send a clear message that involvement in banned online money games will not be tolerated. This definitely stifles any possibility of businesses seeking to operate within the banned category because of the high risks attached. It is, of course, important to note that other forms of gaming, such as e-sports and free-to-play social games, along with their advertising, continue to remain lawful and that the Central Government is desirous of promoting the same. 

The ban on online gaming quickly moved through the Indian parliament last month

India’s real-money gaming industry attracted billions in investment and created over 200,000 jobs. What do you see as the immediate and long-term economic fallout of this prohibition? 

The Act took most industry stakeholders by surprise, with its rapid introduction before Parliament and almost immediate receipt of Presidential assent. It forced many operators to halt their real-money gaming platforms almost overnight. In the immediate aftermath, the promulgation of the Act has led to substantial loss of revenue for private gaming companies, while the government faces a significant reduction in GST and tax revenue that was paid by such operators. It is well documented that the taxes paid by such operators amounted to thousands of crores in the past. 

The thousands of jobs generated by the real money gaming sector are also at risk, with a real threat of loss of livelihood for many individuals employed directly and indirectly by gaming companies. As operators pivot to permissible business models, job cuts and revenue declines are inevitable and will affect not only the operators themselves, but also ancillary sectors like media, technology, and fintech. 

This loss is not restricted to the gaming companies, as the long-term impact of this change in policy will impact India’s global presence in the digital gaming space. In the past few years, the industry has been witnessing large amounts of investors, both domestic and international.

This shift in policy will inevitably affect India’s global digital profile, possibly stifling technical and creative innovation in the field, and may cause migration of capital and specialised professionals to jurisdictions that permit such online money gaming activities. 

Critics argue that bans rarely eliminate gaming but instead drive users toward unregulated offshore platforms. How realistic is this concern in the Indian context? 

Concerns that the ban on real money gaming will push users towards unregulated offshore platforms are realistic and significant. Despite the stringent prohibition on providing any form of online money gaming services in India, on domestic as well as foreign operators, it is well documented that users with addictive tendencies are likely to seek alternatives through various means available. 

However, it is to be noted that the PROGA also targets financial facilitation/authorising funds for online gaming, criminalizing payment processing and authorization related to such gaming. This can affect the feasibility of offshore platforms for Indian users, since depositing amounts and withdrawing winnings would become a significant challenge. While the prohibition completely restricts domestic online money gaming, the shift towards offshore platforms, though likely, will also face certain challenges. 

With a 28% GST and a 30% tax on winnings already in place, do you believe India missed an opportunity to regulate and monetize this sector rather than prohibit it outright? 

While considering opportunities to regulate, it is important to realize that a well-regulated market requires both user discipline and stakeholder compliance. India does have a robust taxation framework in place and definitely has immense potential to benefit from the regulation and taxation of the online money gaming industry.

There is an equal opportunity to use taxation to curb existing issues, such as gambling addiction. Singapore forms a prime example wherein its framework ensures that the taxes received from the gaming industry are utilised for the benefit of the industry itself through responsible gaming initiatives, aiding gambling addiction, and more such initiatives. 

Regulation and taxation could, therefore, be used to build a safer gaming environment as opposed to the blanket ban. It would also allow the government to benefit from a growing industry. 

The bill introduces a National e-Sports Authority to support competitive and educational gaming. How transformative could this be for India’s e-sports ecosystem, and what safeguards will be necessary to ensure fair play and integrity? 

E-Sports is a field witnessing immense growth on a global scale, sometimes forming a viable career for elite players and a large operation for game developers and operators. The support to competitive and educational gaming that has been extended through the Act has strong transformative potential for the e-sports ecosystem of the country, which has already been witnessing an upward growth trend. 

The introduction of the National e-Sports Authority could help formalize training and talent grooming as well as development, helping India to emerge as a strong global contender in e-Sports. The success of this initiative will, however, depend on safeguards and maintaining fair play and integrity. Concerns such as cheating and doping that exist in traditional sports have also found their way to e-Sports, forming some of the many fair play concerns that can come forward.

Safeguarding is also necessary as these games allow social interaction and therefore have scope for untoward activities. The Authority would therefore be required to form robust regulations against cheating, match-fixing, doping, and more, along with feasible access to justice through a dispute resolution system for any issues that arise. Data privacy and cybersecurity regulations would also become a necessary aspect to ensure that e-Sports, educational, and social gaming can thrive within the nation. 

Critics warn that the move could jeopardize sponsorships in sports and other areas

One of the toughest questions regulators face is drawing the line between games of skill and games of chance. Where do you expect disputes to arise under this new framework? 

The Act does not differentiate between games of skill and games of chance in terms of the prohibition and places a blanket ban on any form of online money gaming. The legal distinction itself is not erased. The “preponderance test” applied by courts to classify games either as games of skill or chance still stands and will continue to be used for the classification of games.

It is also to be noted that any rules/regulations under PROGA that may shed clarity on the classification of games are awaited as of this date. Operators are still free to offer free-to-play versions and social gaming formats of skill-based games that do not involve stakes, keeping the skill-chance distinction relevant. 

Disputes will probably arise over specific games that have traditionally fallen into the skill category, such as rummy, fantasy games, and poker, as operators push back against blanket restrictions. The skill vs. chance debate will, therefore, continue to remain valid till the point the position is completely and finally settled with no room for change. 

Global markets like the UK have opted for regulation rather than prohibition. What lessons could India have taken from international models before moving forward with this approach? 

Established global regimes such as those of the UK, Malta, and Curacao form valuable examples that India could have considered emulating. For instance, the UK’s Gambling Commission provides a robust framework through centralized licensing, strict compliance requirements, and levies taxes on operators to fund addiction support services.

Malta has similarly demonstrated that a unified licensing system covering all games—whether skill, chance, or hybrid—creates clarity for operators, prevents forum shopping, and safeguards players. This also significantly brings down the risks associated with domestic users seeking to play on offshore, unregulated platforms.

India’s pre-existing framework, with states regulating betting and gambling, led to regulatory uncertainties. A centralized authority established through the Act is definitely beneficial. However, in place of the blanket ban, licensing would have formed a favourable option as seen in various global frameworks.

Further, measures such as self-exclusion, spending caps, responsible gaming awareness, age-verification, and more could alleviate many concerns that led to the prohibition on online money gaming in India. Evidently, ample regulatory measures are available for consideration and could have been preferred over a blanket ban on the activity. 

Flutter Entertainment and other firms have warned of lost revenue, job cuts, and declining investor confidence. How do you see this decision affecting India’s startup and investment climate? 

While I cannot comment on a company, the Act will significantly disrupt the otherwise growing start-ups and investments in the online gaming sector. The Indian real money gaming industry witnessed exponential growth in both domestic and international investment over the past few years, with partnerships ranging from software development, marketing, entertainment, and more.

Online gaming companies alone contributed to crores in revenue and taxes, alongside providing employment to thousands across various operational roles. However, the Act’s prohibition of real-money gaming in India has admittedly compelled operators to cease operations abruptly. This will naturally lead to substantial job losses as businesses move towards permissible and viable alternatives. The uncertainty caused by the ban also affects investor enthusiasm, thereby reducing domestic venture capital and foreign direct investment flows. 

Do you anticipate constitutional or judicial challenges to this law? And in your view, is there still a pathway for a more balanced regulatory model to emerge in the future? 

The Act has already faced constitutional challenges in various High Courts across the country, all of which have now been clubbed and moved to the Supreme Court of India in the case of Union of India vs. Head Digital Works Private Limited and Anr. (T.P. (C) No. 002484-002486/2025). The Supreme Court is set to begin hearing the matter soon, as the time for transferring all relevant documents from the High Courts has elapsed this week. 

The Government has also shown willingness to engage with industry stakeholders and consider amendments to the present version of the Act. This creates optimism about a future where a more balanced regulatory framework can emerge in a manner that upholds social welfare and consumer protection while permitting legitimate skill-based gaming under necessary oversight. I am confident that cooperation between the government and the industry will be able to form a viable way forward, allowing regulation of permissible online money games with necessary regulation.