TL;DR – (1) Fantasy apps like Dream 11, MyRummyCircle etc. are proposed to be banned, (2) there are three types of games – i. E-sports, ii. Online Social Games and iii. Online Money Games, the first two shall be regulated, third one shall be banned; (3) major penalties on contravention – complete ban on offering, advertising and facilitation of online money games; (4) Constitutionality – gambling is res extra commercium, whereas game of skill can be challenged under Article 19(1)(g); (4) Economic and philosophical thoughts on the bill explored (can be skipped).
The monsoon session of Lok Sabha witnessed the swift passing of The Promotion and Regulation of Online Gaming Bill, 2025, marking a pivotal moment in the country’s digital economy. This sweeping legislation, introduced by Union Minister Ashwini Vaishnaw, represents one of the most significant regulatory interventions in India’s booming gaming sector—an industry projected to more than double from $3.7 billion in 2024 to $9.1 billion by 2029. The bill’s blanket ban on real money gaming or Online Money Games (RMG/OMG) will fundamentally alter the landscape of an industry that employs over 200,000 people and contributes more than ₹20,000 crore in annual taxes.
In synopsis, there are three types of games – (1) Esports, i.e. the games played globally, generally in multiplayer modes like DOTA 2, (even BGMI/PUBG), (2) Online Social Games, i.e. games like solitaire, chess, etc and (3) Online Money Games, i.e. games which involve real money and stakes, PERIOD – irrespective of whether such game is based on skill, chance, or both, which means a nail in the coffin of Dream11, MyCircle11, etc.
Somewhere in a country where the securities market regulator, SEBI, enforces strong guardrails for individuals entering the Futures & Options market due to the heavy losses they often incur, there has been criticism from prominent figures in the securities market. They argue that a parallel should be drawn between people trading in F&O and those creating teams on Dream11, and that the latter cannot be completely exempt from regulation, while a market that operates on globally accepted mathematical models like Black-Scholes remains restricted. The brokerage industry, in the past, has witnessed a sharp decline in revenues; however, the gaming industry here might face an even steeper fall—potentially down to nothing.
Part 1 and 2 are subjects that shall be promoted and regulated, to support growth by the government, and RMG/OMG shall be completely banned in all forms – in multi-pronged approach, such as ban on offering, advertising and facilitating such games, with serious punishments. Further, rightly observed by Hon’ble Minister, some of these games cause huge losses, and eventually lives of youngsters, and often, they are a conduit for terror financing, money laundering etc. [In an observation, it’s noted that the platform “Stake”, which is a pure play gambling app, not even diluted by game of skill or chance, uses multiple random UPI ID’s while a gambler intends to load money on the platform, many a times, these are random names of persons apparently holding Indian bank accounts].
The Financial Memorandum estimates initial capital expenditure at ₹50 crore and annual recurring costs at ₹20 crore for the Authority. Delegated legislation is confined to procedural matters.
The SOR rationalizes the ban by citing addiction, fraud, and offshore operations bypassing state laws, deeming prohibition more efficacious than regulation.
Key Definitions of the bill and their impact:
- E-sports; means an online game which–– (i) is played as part of multi-sports events; (ii) involves organised competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules; (iii) is duly recognised under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3; (iv) has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players; (v) may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and (vi)shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes;
E-sport would mean something which is “played” between individuals/teams. Which means, games like DOTA 2, BGMI etc, but this playing would not consider placing bets on gaming apps, outcome of which is determined by other people involved in action of playing, either a virtual or physical game.
- “Online money game” means an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports;
The said definition completely ousts the fantasy gaming apps, which have, by virtue of Supreme Court deeming such apps as Game of Skill in Avinash Mehrotra v. State of Rajasthan, by drawing an overarching ban on the same, I believe the said definition, intends to, by all means cover these apps without any legal lacunae.
- Online Social Game, means any game neither an e-sport nor an online money game, and which does not involve any money.
Beyond the elephant in the room – a big win for e-sports in India
The global esports market’s projected growth from $2.13 billion to $7.46 billion by 2030 presents significant potential for Indian stakeholders. The Bill mandates the Central Government to recognize and promote e-sports and online social games through, Guidelines for events and competitions, Establishment of training academies, research centers, and incentive schemes, Coordination with State Governments and federations for integration into national sports policies, Mechanisms for registration, distribution platforms, and awareness campaigns to enhance digital literacy and recreational access. But alongside the law, while framing guidelines, it would be necessary that we learn from countries pioneering e-gaming, like China and South Korea.
OMG: The Three Nails to Death
The Bill criminalizes violations with stringent penalties:
- Section 9(1): Offering online money gaming services – Imprisonment up to 3 years and/or fine up to ₹1 crore.
- Section 9(2): Advertising contraventions – Up to 2 years imprisonment and/or ₹50 lakh fine.
- Section 9(3): Financial transaction facilitation – Up to 3 years and/or ₹1 crore.
Notes on Constitutionality
In all likelihood, the gaming industry shall approach the apex court for relief. The broad questions to spark the conversation would be:
Is gambling protected under Article 19(1)(g)?
No; the Supreme Court of India in R.M.D. Chamarbaugwalla v Union of India (“Chamarbaugwalla”) has held that Gambling is gambling is not trade but res extra commercium, and that it does not fall within the purview of those articles.
Is game of skill protected under Article 19(1)(g)?
In Chamarbaugwalla, the court also delved upon what is game of skill, and held that in game where skill is involved, due consideration to aspects of constitutionality can be conferred to the case.
However, even games like Poker, by virtue of State Of Andhra Pradesh vs K. Satyanarayana have been held as game of skill, so broadly the question of reasonableness would be left for the Hon’ble Supreme Court to answer.
Economics & Morality of Banning the Games
In a memo, Howard Marks, the founder of Oaktree Capital posed a simple yet profound question. “Can the state choose the winners and losers in an economy?”. Here, the Indian state wishes to decide what’s right for its citizens, and what’s morally wrong.
However, gambling is a zero sum game, you need a Yudhistir to loose, in order for Duryodhan to win. But the moral question is, can you stop either of them from gambling? Or merely because Duryodhan wins, is he wrong?
Here, the companies like Dream11, Delta Corp, Nazara, do provide jobs to lakhs of people, in simple terms, just because millions of people lose money, another million run their homes. So, perhaps there is no easy right answer. This is similar to Phillip-Morris’ Public Finance Balance of Smoking, which said that smokers help in economy, by contributing in taxes (and dying early).
Yes – the dark patterns, luring consumers, the nudge for making you easy millionaire, all is broadly wrong, which I believe can be strongly regulated, however, a blanket ban may not stand the test of reasonableness.
However, gambling is a recognized psychological disorder and causes compulsive behaviour. Undoubtedly, when one gambles, and is in a trap, no amount of taxation or a disclaimer deters him, as its said “जब नाश मनुज पर छाता है, पहले विवेक मर जाता है”, so in a broad based thought, deterrence is anyways tough, moderation is utopian, and after all, India is “socialist”.
[To be continued with further developments]