New Delhi: The Lok Sabha and then the Rajya Sabha passed the Promotion and Regulation of Online Gaming Act, 2025, establishing the country’s first national-level legal framework for online gaming.
The Act establishes a twin-track approach — while actively promoting e-sports, educational games and social gaming, it completely prohibits online money games and their related services.
The legislation marks a turning point for India’s rapidly growing digital gaming sector, which has been expanding in the absence of a dedicated legal framework. It comes amid concerns about addiction, financial losses, manipulative algorithms and links between real-money gaming platforms and illegal activities such as money laundering and terrorism financing.
The Act provides clear classifications for different forms of online games:
E-sport: Recognised as a legitimate form of competitive sport, played in organised multiplayer formats, governed by rules, and registered under the National Sports Governance Act, 2025. Importantly, e-sports may include participation or registration fees and prize money but cannot involve betting or wagering.
Online Social Game: Games that do not involve stakes or monetary returns. They may be accessed through subscriptions or one-time access fees, provided these are not wagers and are intended for recreation, education, or skill development.
Online Money Game: Any game played by paying money, fees, or stakes with the expectation of monetary or equivalent return. Crucially, the Act makes no distinction between games of skill and games of chance. Any staked game involving financial returns is prohibited.
The law applies to all online money gaming services within India and those operated from outside India but accessible in India.
Prohibitions
The Act sets out three core prohibitions:
- Ban on Online Money Games and Services: No person may offer, aid, or engage in any online money gaming activity.
- Ban on Advertising: Advertisements, promotions, or endorsements of online money games are strictly prohibited across all media, including influencer or celebrity campaigns.
- Ban on Financial Facilitation: Banks, financial institutions, and intermediaries are barred from processing transactions linked to online money games.
These provisions target not only domestic operators but also foreign real-money gaming (RMG) platforms.
Authority on Online Gaming
To oversee the sector, the Central Government will establish an Authority on Online Gaming. This body will: Determine whether a game qualifies as an online money game; Register, categorise and regulate e-sports and online social games; and Handle complaints and issue directions to operators.
The Financial Memorandum estimates an initial capital expenditure of Rs 50 crore and an annual expenditure of Rs 20 crore for the Authority’s functioning.
Penalties and Offences
The Act prescribes tough punishments:
Offering/facilitating online money games: up to three years imprisonment or Rs 1 crore fine, or both.
- Advertising: up to two years imprisonment or Rs 50 lakh fine, or both.
- Financial facilitation: up to three years imprisonment or Rs 1 crore fine, or both.
Repeat offenders face mandatory minimums, with terms rising to five years imprisonment and fines up to Rs 2 crore. In this Act, there are offences which are cognizable and non-bailable. Companies are liable for violations, with directors and managers held personally responsible if offences occur with their knowledge or consent.
Enforcement Powers
The Act gives enforcement agencies extraordinary powers:
- Blocking Access: Any online money gaming service can be blocked under Section 14 via IT Act provisions.
- Investigation: The Centre may authorise officers to investigate offences.
- Search and Seizure: Officers may enter any place, physical or digital, and conduct searches and arrests without a warrant. This extends to computer resources, servers, electronic storage and virtual digital spaces, including overriding access controls.
Promotion of E-Sports and Social Gaming
While the prohibitions dominate headlines, the Act also provides a framework to promote non-monetary gaming. The Act talks about the establishment of training academies and research centres for e-sports; Incentive schemes, awareness campaigns and integration of e-sports with national sporting policy; and registration and facilitation of online social games for recreational and educational purposes.
This dual strategy reflects the government’s attempt to curb harms while supporting innovation and global competitiveness.
From the Legal Lens
Following the passage of the Act in both Houses of Parliament, APAC Media reached out to legal experts to assess its aftermath.
Rahul Hingmire, Managing Partner, Vis Legis Law Practice
“The Promotion and Regulation of Online Gaming Bill, 2025 leaves no carve-out for fantasy or other skill-based apps. Section 3 prohibits offering, aiding or engaging in any ‘online money game.’ Clause 2 defines such games as those where users deposit money with the expectation of a monetary or equivalent return. This definition makes no distinction between skill and chance. Accordingly, fantasy platforms like Dream11 or MPL fall within the prohibition, since they involve monetary stakes and returns, and are legally treated at par with betting or gambling apps.
The Bill expressly extends its scope to offshore operators. Section 1(2) applies its provisions to services offered from outside India but accessible within India.’ Sections 6–7 prohibit advertisements, sponsorships and financial facilitation, while Section 14 authorises blocking of platforms through IT Act, 2000 (s.69A). Contraventions under Sections 5 and 7 attract up to three years’ imprisonment or fines of Rs 1 crore, with offences declared cognizable and non-bailable under Sections 9–10. Sections 15–16 empower search, seizure and arrest, even in virtual digital space, thereby creating an enforceable framework to curb international RMG operators.”
Rohit Jain, Managing Partner, Singhania & Co.
“The Bill defines an ‘online money game’ as any online game where a user pays fees or deposits money with the expectation of winning money in return, irrespective of whether such a game is based on skill, chance, or both. This definition is crucial because it removes the ‘game of skill’ argument that fantasy gaming platforms have historically used to operate legally. By making the skill-or-chance distinction irrelevant, the Bill categorises any pay-to-win monetary game, including fantasy sports, as a prohibited ‘online money game’. The only exception provided in this category is for e-sports.
The Bill unequivocally brings international RMG platforms operating from offshore jurisdictions under its ambit. It states that the law applies to any ‘online money gaming service offered within the territory of India or operated from outside the territory of India’.
The government plans to enforce this through the following mechanisms:
Blocking Access: The government can block public access to any ‘computer resource’ related to online money gaming services. This means websites and apps like Parimatch and Stake can be made inaccessible to users in India.
Prohibiting Financial Transactions: The Bill forbids banks, financial institutions, and any other payment facilitators from processing transactions for any online money gaming service.
Banning Advertisements: It will be illegal to create or distribute any advertisement in any media that directly or indirectly promotes online money games.
Investigation and Seizure: Authorised officers can investigate offences and have the power to enter any place, ‘whether physical or digital,’ search, and arrest without a warrant any person suspected of committing an offence under the Act.
Severe Penalties: Any person who offers an online money gaming service in violation of the law can face imprisonment for up to three years and a fine of up to one crore rupees. Similar penalties apply to those who facilitate funds or advertise these services.”
Ankit Sahni, Partner, Ajay Sahni & Associates
“The new Promotion and Regulation of Online Gaming Bill, 2025, takes a very clear stand. Any online game where players put down money or valuables in return for the chance of a payout is treated as a ‘real-money game.’ This applies even if the format is based on skill, such as fantasy sports. Earlier, courts drew a line between skill-based and chance-based formats, but the Bill has moved away from that test. The deciding factor now is whether money is staked. If yes, it falls within the prohibition.
The legislation is also designed to bring international betting platforms within its net. Services offered from abroad but accessible in India will be treated in the same way as domestic operators. The government has provided multiple levers of enforcement, ranging from blocking financial transactions and advertising to criminal sanctions, including fines and jail terms. In addition, regulators and enforcement officers have been given authority to block access to unlicensed platforms and to act against promoters or endorsers who advertise them. The message appears to be clear – offshore operators that target Indian players with money-based games will be subject to the same restrictions as local firms.”
Alay Razvi, Managing Partner, Accord Juris
“Fantasy gaming apps that are skill- or strategy-based and marketed as ‘games of skill’ do not fall under the prohibited category of ‘online money games’ in the Promotion and Regulation of Online Gaming Bill, 2025, provided they do not involve real-money stakes or returns. The Bill distinguishes these games by allowing them to be registered and regulated as legitimate games, while it bans and regulates games involving monetary stakes or financial returns as online money games.
The Bill does curb the operations of international Real Money Gaming (RMG) platforms like Parimatch and Stake that operate from offshore jurisdictions. The government enforces this through mechanisms including blocking access to such platforms, prohibiting financial transactions associated with them, and granting authorities powers for warrantless searches, seizures, and arrests. It also imposes severe penalties on operators and facilitators, and takes action against surrogate advertisers and intermediaries enabling these offshore platforms to function in India. These measures aim to control and restrict offshore RMG operations despite their foreign base.”
Ashutosh K Srivastava, Partner, SKV Law Offices
“The Promotion and Regulation of Online Gaming Act, 2025, which received parliamentary approval on August 21, 2025, represents a comprehensive legislative framework aimed at dual objectives. The Act seeks to completely prohibit ‘online money games’ defined as any online game involving monetary stakes or returns, irrespective of whether based on skill, chance, or both, while simultaneously promoting legitimate gaming sectors, including e-sports and educational social games. The legislation’s core provisions include establishing criminal penalties of up to three years imprisonment and fines reaching Rs 1 crore for operators, alongside comprehensive bans on advertising and financial transactions related to prohibited platforms.
The cleared bill aims to encourage positive gaming through e-sports and protect citizens from financial and psychological harm caused by online gambling. This move by the Indian government can be seen as one that will support innovation in India’s gaming ecosystem.
With that being said, there is a likelihood that the Act will be challenged in the Supreme Court. The blanket ban on all online money games, regardless of whether they are games of skill or chance, directly conflicts with established Supreme Court doctrine that protects skill-based games under Article 19(1)(g) of the Constitution. Courts have consistently struck down similarly overbroad bans emphasising the right to carry on lawful business activities.
Another factor is that since the regulation of betting and gambling is a matter reserved to states under Entry 34 of the State List in Schedule VII of the Constitution, the central law’s attempt to legislate a comprehensive national ban invites a federalism challenge. In other cases of laws challenged before the Supreme Court—such as the farm laws, which were stayed and later repealed, or the NJAC, which was struck down—even wide-ranging reforms have faced constitutional barriers. There is therefore a realistic possibility that this Act will be challenged before the Supreme Court of India.”
Legal experts broadly agree that the Act takes an uncompromising stance by banning all real-money games, including fantasy sports, removing the long-debated distinction between skill and chance. While some emphasise its strong enforcement mechanisms against both domestic and offshore operators, others warn that the blanket ban may face constitutional and federalism challenges in the Supreme Court.
However, the newly passed act is expected to draw a sharp line between harmful and legitimate forms of online gaming. By criminalising real-money games and simultaneously promoting e-sports and social games, the government has signalled a dual strategy of prohibition and support. Whether this sweeping framework will withstand judicial scrutiny, particularly on constitutional and federalism grounds, remains to be seen.
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