The Online Gaming Act 2025

Blog Credit : Trupti Thakur

Image Courtesy : Google

The Online Gaming Act 2025

The Act, passed by Parliament, encourages e-sports and online social games while prohibiting harmful online money gaming services, advertisements, and financial transactions related to them.

• The act was introduced in Parliament as a Finance Bill under Articles 117(1) and 117(3) of the Constitution,with the President’s recommendation.

What is Promotion and Regulation of Online Gaming Act, 2025?

• About: The Act seeks to create a comprehensive legal framework to regulate, promote, and support the online gaming sector, fostering a responsible digital environment for citizens.
• Ban on Online Money Games: The act completely prohibits offering, advertising, or facilitating financial transactions for real money games.
  • Banks and financial institutions are barred from processing payments for such platforms.
  • Authorities empowered under the IT Act, 2000to block unlawful platforms.
• Key Provisions of the Act:Online games are classified in the following manner:
  • E-Sports: Recognized as a legitimate sport, competitive digital sports played through organized tournaments, requiring skill.
  • Online Social Games: Primarily skill-based games designed for entertainment, or social interaction. Examples: Wordle.
  • Online Money Games: Games involving financial stakes, whether based on chance, skill, or both. Players pay fees or deposit money with the expectation of monetary or other gains. Examples:Dream11, Poker,  Rummy.
• Applicability of the Act: Across India and includes online money gaming services offered within India or operated from outside but accessible in India.
• Promotion of Positive Gaming: 
  • E-Sports: Ministry of Youth Affairs & Sports to frame guidelines, establish training academies, and research centres.
  • Social/Educational Games: Union Government can recognize, register, and promote safe, age-appropriate platforms for learning and recreation.
• Regulatory Body: A national-level regulator to:
  • Categorize and register games.
  • Determine if a game qualifies as a money game.
  • Handle complaints and grievances.
  • The Central Government is authorized to appoint officers with powers of investigation, search, seizure, and arrest (in certain cases even without a warrant).
• Offences and Penalties:
  • Offering online money games: Up to 3 years imprisonment and ₹1 crore fine.
  • Advertising banned games: Up to 2 years imprisonment and ₹50 lakh fine.
  • Offences are cognisable and non-bailable.
• Liability Clause: The Act makes companies and their officers accountable,while independent and non-executive directors are exempt if they can demonstrate due diligence.

Online Gambling

• About: Online games are defined as those played on electronic or digital devices and operated through software using the internet or other electronic communication technologies.
  • It facilitates real-time interaction and competition between players, regardless of their location.
• Classification: 
  • Skill-Based Games: They prioritize skill over chance and are legal in India. E.g.,  Game 24X7, Dream11, and Mobile Premier League (MPL).
  • Games of Chance:Their outcome depends mainly on luck rather than skill and are Illegal in India. g., Roulette, which attracts players primarily for monetary rewards. 
• Market Size:In 2023, India became the world’s largest gaming market with 568 million gamers and 9.5 billion app downloads. 
  • The market, valued at USD 2.2 billion in 2023, is projected to reach USD 8.6 billion by 2028.

What are the Key Growth Drivers of India’s Gaming Industry ?

• Economic Drivers: India’s vibrant start-up ecosystem, supported by Start-up India and Atmanirbhar Bharat framework, has fostered the growth of numerous gaming companies and platforms.
  • These startups are driving innovation and catering to the diverse gaming preferences of Indian consumers, contributing to the expansion and evolution of the gaming industry in the country.
  • India has produced numerous gaming unicorns, including Games24X7, Dream11 and Mobile Premier League.
  • In the last few years, gaming companies raised USD 2.8 billion from domestic and global investors,amounting to 3% of total startup funding in India.
  • NVIDIA has announced the launch of its cloud gaming service in India in November 2025.
• Technological Enablers;
  • Initiatives such asBharatNet and the National Broadband Mission (NBM) are focused on providing high-speed internet to rural and remote regions.
  • The 5G rollout has further boosted internet speeds and lowered latency, crucial for a smooth gaming experience.
  • A recent survey by MoSPI reveals that over 85% of Indian households now own smartphones, with internet access available within the premises for 86.3%.
  • Mobile phones contribute to 90% of the gaming market in India as compared to about 37% and 62% in the US and China, respectively.
• Policy & Cultural Shifts:
  • IT Rules 2021, self-regulatory bodies, and the AVGC Task Forcecreated a framework for safe growth.
  • Gamers honored in the Content Creators Award; Create in India Campaignpromotes content creators.
  • Covid-19 lockdown drove 50% industry growth, with average gaming time rising from 5 to 4.1 hrs/day, turning gaming into a legitimate career path.

How is the Gaming Industry Regulated in India?

• Information Technology Act, 2000 & Rules
  • The IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, amended in April 2023, set standards for online gaming platforms.
  • Intermediaries must prevent the circulation of unlawful/illegal content.
  • Platforms offering money games must register with Self-Regulatory Bodies (SRBs), which determine if a game is permissible.
  • Section 69Aempowers the government to block illegal sites/apps — 1,524 betting and gambling platforms blocked (2022–June 2025).
• Bharatiya Nyaya Sanhita, 2023:
  • Section 111: Penalises unlawful economic activities and cybercrimes.
  • Section 112: Punishes unauthorised betting/gambling with 1–7 years imprisonment and fines.
• Integrated Goods and Services Tax (IGST) Act, 2017:
  • Extends to illegal/offshore gaming platforms.
  • Online money gaming suppliers must register under the Simplified Registration Scheme.
  • The DG of GST Intelligencecan direct blocking of unregistered/non-compliant platforms.
  • Ensures digital gaming entities follow the same taxation norms as physical businesses.
• Consumer Protection Act, 2019
  • Prohibits misleading/surrogate advertisements.
  • The CCPAcan investigate, penalise, and initiate criminal proceedings.
  • Advisories issued to restrict celebrities/influencers from endorsing betting platforms.

What are the Key Concerns of India’s Online Gaming Industry and Suggest Measures to Strengthen It?

Concerns	Measures
Regulatory Ambiguity – Fragmented state laws; no clear distinction between skill-based gaming and gambling.	Establishment of a national regulatory body; strengthen self-regulatory bodies (SRBs) for clarity.
Illegal Gambling & Money Laundering – Offshore sites thriving; risks of terror financing, misuse of remittance routes.	Collaborate with banks & payment gateways to block illegal transactions; real-time monitoring; global anti-money laundering cooperation.
Addictive Behaviour – Excessive play leads to stress, financial ruin, suicidal tendencies (23% youth affected).	Introduce age-gating, spending limits, self-exclusion tools; integrate mental health support; run public awareness campaigns.
Cyberattacks – Data breaches (11 mn accounts in 2024); risks from VPN/geo-blocker bypass.	Strengthen cybersecurity with audits, encryption, intrusion detection; comply with data protection norms.
Financial Risks – Vulnerable users overspend (₹17 lakh PUBG case); Indians lose ₹20,000 cr annually.	Promote responsible gaming practices; enforce parental controls; ensure consumer protection mechanisms.
Lack of Innovation Support – Limited infrastructure and mentorship for developers.	Develop dedicated gaming hubs & incubators (models: Montreal, Singapore, South Korea) for innovation and talent growth.

 

Blog By : Trupti Thakur