TLDR: According to reports, the Union Cabinet has passed the Promotion and Regulation of Online Gaming Bill 2025 (Bill). The Bill will apply to all online money gaming services offered in India, whether by domestic providers or foreign operators. The Bill outrightly prohibits all online money games, ads related to them and any facilitation by financial institutions for the transfer of funds within/through such games. This is irrespective of whether they are games of skill or games of chance. There is no licensing or registration process for online money games to operate in India within the ambit of the Bill.
Next Steps: Importantly, the law is not yet in force. Having been cleared by the Union Cabinet, the Bill will now be introduced in Parliament, first in the Lok Sabha and then in the Rajya Sabha. The current session is scheduled to end on 21 August. After the Bill passes in Parliament it will require Presidential assent and notification in the Gazette to take effect (Section 1(3)). This sequence can move quickly, meaning the law could come into force soon after the session concludes. Since there are no transition provisions in the text of the Bill at present, it appears that once notified, the prohibition provisions will apply immediately, effectively banning all online money games overnight.
Highlight of the Bill:
• Categorisation: The law creates a framework that both prohibits and regulates different forms of online gaming. The Bill formally recognises three categories of online games (Section 2). The first is e-sports (Section 2 (c)), which are explicitly exempted from the ambit of prohibition and will be promoted by the Government through measures such as guidelines, training academies, research centres, and integration into broader sports policy. The second category is online money games, defined to cover any online game-whether based on skill, chance, or both, where a user pays fees, deposits money, or plays for stakes with an expectation of winnings which can entail other enrichments in return for money or stakes (Section 2 (f)). The third is online social games, defined under Section 2 (i), which do not involve monetary stakes or rewards but may allow access through a one-time subscription or access fees, provided these payments are not wagers; these games are intended purely for entertainment, recreation, or skill development.
• Prohibition of Online Money Games: The Bill places a complete prohibition on online money games (Section 5). It bans any person offering, aiding, abetting or inducing the offering of such games, and prohibits any advertising (Section 6). It also prohibits any financial institution or entity from facilitating or authorization of funds towards payments in online money games (Section 7). Importantly, there is no process of registration or licensing that will enable any online money game to operate in the country. This is a departure from the framework under the IT Rules which allowed for recognition of “permissible online real money games”
• Penalties: Offering or providing access to online money games can attract imprisonment of up to three years or fines of up to INR 1 crore (Section 9 (1)). Publishing or causing advertisements of such games can result in up to two years’ imprisonment or fines up to INR 50 lakh (Section 9 (2)). Facilitating fund transfers for these services can draw up to three years’ imprisonment or fines up to INR 1 crore (Section 9 (3)). Repeat offences carry harsher punishment, for operators and facilitators, three to five years’ imprisonment and fines between ₹10 to 20 lakh (Section 9 (4)); and for repeat advertising offences, two to three years’ imprisonment and fines between INR 5 to 10 lakh (Section 9 (5)).
• Establishing oversight and blocking: The central government may establish an authority to assist it in performing the functions under the Act and overseeing the sector. This may either be a new authority or an existing authority or agency could be given this charge. (Section 8). At the discretion of the central government, this Authority may be empowered to decide, either on applications or on its own motion, whether a particular online game is categorized as an online money game and hence must be prohibited (Section 8 (2) (a)). It will also be responsible for recognising, categorising, and registering online games (Section 8 (2) (b)). The details of these processes will be framed by the Central Government through rules (Section 19(2)(c). The Central Government may also empower the Authority through rules to encourage e-esports and online social games (Section 19(2)(a) – (e)). The Bill expands the scope of Section 69A and allows for any online money game that is prohibited to be blocked using Section 69A powers under the IT Act. The Union Government is empowered to make rules to operationalise the law.
• Official rationale provided for the Bill: Through this Bill, the Government of India aims to harness India’s immense IT talent, encourage Indian creativity and innovation, and support potential participation in global tournaments (e.g., e-sports), while also tackling the presence of bad actors such as offshore betting platforms, and the possible harms (e.g., addiction, financial loss leading to suicides) of unchecked online money gaming in India. The Draft Bill acknowledges that unregulated use of money and cryptocurrencies poses financial and national security risks, adding that entities are circumventing Indian data protection, tax and other legal obligations. The Bill also acknowledges the employment generation potential for the online gaming industry, if it is passed. The government has also addressed its legislative competence over the subject on grounds of public interest, risks to public health, consumer safety, public morality and financial sovereignty.
Emerging Questions and Implications:
1. How does this Bill impact the offering of online games in India?
If you are offering online games that involve staking or wagering of money, coins, or other items of value (whether real or virtual), where users can expect to win or be enriched, you will no longer be able to offer your games in India. This is irrespective of whether your game is considered a game of chance or game of skill. The Bill prohibits banks and other organizations from facilitating payments and prohibits you from advertising your games online or on other media platforms. If you do not stop offering your game in India, the government can issue a blocking order to prevent access to your game and pursue prosecution against you and responsible officials in your company.
If you are an online game that is subscription based, or allows game play with a tournament fee, or is a game considered by the Bill as an e-sport, you can continue to offer your game. You can offer your game if it does not involve monetary stakes or rewards and can be accessed through a one-time subscription or access fees where the games are intended purely for entertainment, recreation, or skill development. Such games are considered as “online social games” according to the Bill.
Free-to-play games are not affected by this Bill. In-app purchases may be allowed if they are for use within the game (i.e., for purchasing in-app gear for playing the game) but not for use outside of the game (e.g., real money winnings that can be withdraw, or vouchers to be re-imbursed on e-commerce platforms).
2. Does the outright prohibition on online money games mean there is no possibility of licensing or exemptions in the future?
Yes. As the Bill reads currently, online money games will be banned outright. Online money games cannot be offered, aided, abetted, induced, or otherwise by any person.
The Central Government or the Authority created under the Bill can on its own or when applied to by any person, determine if a game is an online money game or not.
3. Will games that are currently marketed as “skill-based” but involve entry fees be banned immediately upon notification?
If the game does not involve winnings for the users, and staking or wagering by the users, but has an entry fee, it may be permitted. But if users pay an entry with an expectation of winning, this is prohibited even for skill-based games.
4. What is the appeal or review mechanism if the Authority categorises a game as an “online money game”?
There is no explicit appeal/ review mechanism. It is possible that this mechanism is created through subsequent rules. In the absence of an explicit appeal/review mechanism, it would be possible to approach courts in their writ jurisdiction.
5. How do I know if my game is an “e-sport” under the Bill?
To be considered an e-sport, you must meet all six criteria laid out in the Bill. The criteria are (a) your game is played as part of a multi-sports event; (b) your game involves organized competitive events between individuals or teams and are conducted in multiplayer formats governed by pre-defined rules; (c) your game is registered with the authority or agency under the National Sports Governance Act 2025; (d) the outcome of game is determined solely by factors such as physical dexterity, mental agility, strategic thinking, or other similar skills of users; (e) your game may include payment of registration/ participation fees for the purpose of entering the competition or covering administrative costs including prize money; and (f) your game does not include wagering, staking, or betting.
If your game is not part of a multi-sport event, then it may not be considered an e-sport. Therefore, if there are competitions organized for a single game (e.g., Chess), the game may not be considered an esport under the Bill.
6. What happens to opinion trading platforms?
Opinion trading platforms will likely be prohibited by the Bill, because they will be treated as online money games and there is no carve-out for games of skill.
7. Will the Authority be an independent regulator?
The Bill does not establish the Authority as an independent statutory regulator. Instead, it empowers the Central Government to either create a new authority or designate an existing agency to assist in implementing the law. The functions, powers, and scope of the Authority are left to the discretion of the Central Government, which will be prescribed through rules or notifications (Section 19(2)(d)). This means the Authority will operate as an extension of the executive, rather than as an autonomous regulator.
8. Will the Authority’s registration framework for social games and e-sports be available before prohibition takes effect, or will there be an interim period of uncertainty?
If an online game falls within the definition of e-sports or online social games, it can continue to operate. There is currently no mandatory registration requirement with the Central Government, although such a requirement could be introduced later through rulemaking. Importantly, the Central Government or the Authority on its behalf, can examine the classification of a game either suo motu or in response to a user complaint to determine whether it is an online money game.
9. How will the Bill impact foreign operators providing online gaming into India without a local presence?
The Bill applies (Section 1(2)) to both Indian companies and foreign companies offering online games within the territory of India, irrespective of whether they have a local presence in India.
10. Does the Bill impact any other games?
The Bill empowers the Authority to respond to complaints about online games which are prejudicial to the interests of users. It is unclear what “prejudicial to the interests of users” will entail, but the preamble and statement of objects to the Bill indicate that it will also tackle harms such as addiction, and suicides because of financial losses. It is likely that these harms will play a role in determining whether the online game is prejudicial to users.
11. How does this Bill impact the applicability of other relevant laws?
The Bill does not have a repeals and savings clause. However, it does state that the Bill will be in addition to existing laws, and where there are conflicts between the Bill’s provisions and a state law, the Bill will prevail.
This will lead to closure of online money gaming businesses in states (e.g., Tamil Nadu), which allow businesses who comply with the state’s law (e.g., The Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022) to provide online money games.
12. How quickly after Gazette notification will companies need to cease operations? Is there any grace period for winding down?
The Bill does not reference a grace period. Therefore, in the current version of the Bill, companies offering online money games will have to cease their operations on the date the Bill is notified in the Official Gazette.
13. What happens to existing user balances (wallet money, credits, or prizes) once prohibition applies?
The current version of the Bill does not provide a timeline for ceasing operations of online money games. Therefore, the treatment of existing user balances remains unclear, and as such can be an opportunity to engage with the government on an appropriate grace period for winding down operations or pivoting business models.
14. How will platforms and advertisers know whether a game is prohibited?
The Bill bans advertisements of online money games, creating a proactive obligation on advertising and marketing companies, as well as platforms running ad programs, to ensure such ads are not carried. Since there is no licensing or classification system for permissible online money games, these entities will need to undertake their own due diligence to assess whether a game falls within the prohibited category. In effect, no advertising campaigns for online money gaming can be created, accepted, or delivered, and advertisers, marketers, online platforms, and influencers will bear responsibility for staying updated on the Central Government or Authority’s classifications and decisions.
15. How will penalties apply to influencer marketing or endorsements of online games?
The Bill penalises people for making or causing to make advertisements of online money games with fines up to INR 50 Lakh, up to 2 years prison sentence, or both. This will impact celebrities and influencers’ marketing and endorsements as the Bill applies to “any person” who is involved in the making of such ads.
Author Credits: This post has been authored by Ikigai Law Team
Image credits: Shutterstock
