India rolls out new online gaming framework, establishes oversight body

India’s Ministry of Electronics and Information Technology has notified a new regulatory framework for online gaming, including the creation of a central authority to oversee the sector, with rules set to take effect on May 1, 2026.

The framework, issued under the Promotion and Regulation of Online Gaming (PROG) Act, 2025, aims to curb online money games while supporting the growth of e-sports and online social gaming.

Under the rules, the government will establish the Online Gaming Authority of India, which will maintain a list of online money games, handle complaints and appeals, issue directions to service providers, and coordinate with financial institutions and law enforcement agencies.

India enforces tighter oversight

The move comes as India seeks to tighten oversight of the rapidly growing gaming sector and address risks linked to online money gaming platforms.

The framework sets out a structured process to determine whether a game qualifies as a “real money game”, based on factors including the payment of fees or deposits, expectation of monetary rewards, revenue models, and the monetisation of in-game assets.

Under the new legal regime, real money games will be effectively banned nationwide, while e-sports and most online social games will be allowed to operate subject to compliance requirements. Certain categories of games will require mandatory registration.

User protection measures introduced

The rules also introduce a range of user protection measures, including age verification mechanisms, parental controls, time restrictions, reporting tools, and grievance redressal systems, as well as counselling support and fair-play monitoring.

A two-tier grievance redressal framework will allow users to first raise complaints with service providers and then appeal to the gaming authority within 30 days. A final appeal can be made to an appellate authority, identified as the IT Secretary, which will aim to resolve cases within a further 30 days.

Service providers will be required to clearly display terms of service, designate points of contact, and comply with data retention and payment-related directives.

The government said the rules are designed to protect users from financial and social harm while providing regulatory clarity for industry participants.

Taxation rules remain unchanged, with income from online gaming treated as “Income from Other Sources”, subject to a 30% tax under Section 115BBJ and tax deducted at source provisions under Section 194BA.

Regulatory relief meets lingering uncertainty

"The 'regulation-light' approach under the PROG Rules, 2026 is a pragmatic acknowledgement that a uniform compliance burden across all gaming formats would have been commercially unworkable," Vidushpat Singhania, Managing Partner at Krida Legal, tells Yogonet. "Allowing online social games to operate without mandatory registration is a sensible concession, but for operators in the real-money gaming space, this relief is largely academic."

The legal expert points out that the more consequential reality stemming from the changes is that significant discretion will continue to rest with the Online Gaming Authority of India to determine compliance on a case-by-case basis, and any format involving direct user staking can be reclassified as a prohibited money gaming type.

That degree of regulatory unpredictability can make long-term business planning extremely difficult for current operators.

"Three structural gaps remain unresolved: the absence of an independent appellate mechanism outside MeitY, the lack of defined thresholds for re-examination of games, and the broad scope for rule-making through codes of practice," says Singhania.

"Until these are addressed, the 'regulation-light' label risks being a surface-level assurance rather than a substantive one. India's gaming ecosystem deserves regulatory coherence, not merely selective lightness."