India Bans Real-Money Gaming: $23 Billion Industry at Risk

India Enacts Sweeping Online Gaming Legislation, Banning Real-Money Games

India’s lower house of parliament has approved a comprehensive online gaming bill. This legislation promotes esports and casual gaming experiences that do not involve monetary wagers. However, it simultaneously establishes a nationwide prohibition on real-money games, potentially disrupting substantial investment and significantly affecting the real-money gaming sector.

Bill Details and Restrictions

The legislation, formally known as the Promotion and Regulation of Online Gaming Bill, 2025, seeks to outlaw real-money games across the country. This ban encompasses games based on both skill and chance. Furthermore, the bill aims to prohibit the advertising of these games and restrict related financial transactions.

India’s IT minister, Ashwini Vaishnaw, emphasized the bill’s focus on societal well-being during its introduction to Parliament. He stated the legislation prioritizes protecting the public from emerging societal harms.

Financial institutions, including banks, will be restricted from processing transactions related to real-money games within India. Individuals offering these prohibited games could face imprisonment of up to three years, a fine of up to ₹10 million (approximately $115,000), or a combination of both penalties.

Penalties for Promotion and Concerns Regarding Offshore Platforms

The bill also outlines penalties for celebrities who promote real-money games on any media platform. Such endorsements could result in imprisonment for up to two years or a fine of ₹5 million (roughly $57,000).

Vaishnaw explained that the legislation was prompted by reports of harm, including instances of suicide linked to financial losses incurred through gaming. However, industry representatives contend that these incidents are primarily associated with offshore betting and gambling applications, which they believe this bill may not effectively address.

Legal Challenges and Constitutional Concerns

Legal experts anticipate challenges to the bill’s validity. Meghna Bal, director of the Esya Centre, a New Delhi-based think tank, argues the law is likely to fail the test of proportionality under Article 19(1)(g) of India’s Constitution.

Article 19(1)(g) guarantees Indian citizens the right to practice any profession or engage in any trade or business.

Bal suggests the legislation dismantles compliant onshore companies while inadvertently facilitating the growth of illegal offshore betting platforms, which are the primary source of financial risk.

Industry Response and Concerns

Prior to the bill’s introduction, industry bodies – including the Federation of Indian Fantasy Sports, All India Gaming Federation, and E-Gaming Federation – collectively appealed to Prime Minister Narendra Modi to intervene. A letter reviewed by TechCrunch warned that the proposed legislation could inadvertently benefit illegal offshore gambling operations and force legitimate Indian businesses to cease operations.

These organizations represent prominent real-money gaming companies such as Dream Sports, MPL, WinZO, Gameskraft, Nazara Technologies, and Zupee.

The letter highlighted the potential for millions of players to be driven towards unregulated matka networks, offshore gambling websites, and unreliable operators lacking safeguards, consumer protections, or tax compliance. (Matka refers to an illegal gambling practice originating in India, based on random number betting.)

Economic Impact and Job Losses

The industry bodies estimate the combined enterprise valuation of real-money gaming startups in India at ₹2 trillion (approximately $23 billion). They report cumulative revenues of ₹310 billion (around $3.6 billion) and annual contributions of ₹200 billion (roughly $2.29 billion) in direct and indirect taxes.

They project a 28% compound annual growth rate, potentially doubling the industry’s size by 2028. However, they warn that the blanket ban could lead to the loss of over 200,000 jobs and the closure of more than 400 companies.

Investor Reactions and Stock Market Impact

Similar concerns were communicated to Indian Home Minister Amit Shah by the three industry associations. Additionally, investors, both domestic and international, are reassessing their strategies, according to a source familiar with the matter who requested anonymity.

Nazara Technologies, a publicly listed company with prior investments in real-money gaming platforms, experienced a 12.84% decline in its share price on Wednesday, closing at ₹1,220 (about $14). The company clarified in a stock exchange filing that it has no direct exposure to real-money gaming businesses and that these platforms do not contribute to its current revenues.

Company Responses and Legislative Process

Dream Sports and MPL declined to provide comments. WinZO, another significant real-money gaming startup, did not respond to inquiries.

The bill was passed by voice vote in the lower house of Parliament in under seven minutes after its introduction for debate. It now requires approval from the upper house and the president to become law.

Support from Casual Gaming and Esports Sectors

Some companies within the casual gaming and esports sectors have expressed support for the legislation.

Sumit Batheja, CEO and co-founder of Ginger Games, a company incubated by Krafton, stated the decision allows them to concentrate on core business concerns like monetization, retention, and intellectual property development.

Esports Concerns and Need for Clear Definitions

Krafton is the South Korean gaming company renowned for the battle royale game PUBG.

Akshat Rathee, co-founder and managing director of esports company NODWIN Gaming, emphasized the need for clear distinctions between esports, online gaming, online social gaming, and online money gaming. He argued that precise definitions are crucial for uniform understanding.

“The absence of precise definitions has often led to ambiguity and conflation around the term ‘esports’,” Rathee stated. “Such overlaps can create confusion not just for regulators, but also for players, teams, investors, and organizers.”

Bal also noted that the bill “decimates esports,” as an authority established by the Indian government will determine the validity of esports activities.

Previous Regulatory Attempts and Tax Implications

“The impact goes beyond real money gaming to the broader ecosystem of businesses that depend on it and indeed presents grave implications for the AVGC [Animation, Visual Effects, Gaming, and Comics] sector as a whole,” she said.

In 2023, the Indian government amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to address “user harm” from real-money games and proposed self-regulatory bodies. However, this self-regulation approach failed due to disagreements among industry stakeholders regarding enforcement and standards.

New Delhi implemented a 28% tax on online gaming in 2023 to curb real-money play, prompting criticism from the industry. Leading investors urged Prime Minister Modi to reconsider, warning of potential write-offs and job losses. Despite these concerns, the tax remained in effect, even as companies challenged its retrospective application in the Supreme Court. Reports suggest a potential increase to 40% under new regulations.

Concerns Regarding Due Process and Investment Climate

Rohit Kumar, a founding partner at The Quantum Hub, a New Delhi-based public policy firm, expressed concerns about the lack of due process in the bill’s enactment.

“Regulation is necessary, but abrupt moves like this undermine India’s reputation as a stable, predictable investment destination. If concerns existed, the government should have signaled them clearly from the outset,” he said.