Lok Sabha passed the online gaming bill to ban real money online games, citing instances of gambling addiction, money laundering and financial frauds. The legislation will now go to the Rajya Sabha for approval to become a law. he move affects India’s $3.8 billion gaming industry, which has drawn global investors and fostered fantasy sports apps like Dream11, Games24X7 and Mobile Premier League.
Lok Sabha Passes Bill To Prohibit Online Money Game
Why In News
- Lok Sabha passed the online gaming bill to ban real money online games, citing instances of gambling addiction, money laundering and financial frauds. The legislation will now go to the Rajya Sabha for approval to become a law. he move affects India’s $3.8 billion gaming industry, which has drawn global investors and fostered fantasy sports apps like Dream11, Games24X7 and Mobile Premier League.
Why To Ban
- “The government believes that the harms of addiction, financial loss and even extreme consequences such as suicides associated with online money gaming can be prevented by prevention of such activities,” according to a media statement released by the government.
- “Additionally, online money gaming platforms are often misused for financial fraud, money laundering, terror financing and messaging activity that compromise national security,” it added.
Online Money Games
- Bill applies to all online money gaming platforms irrespective of whether they are games of skill or chance, a distinction the industry had lobbied hard for in the past.
- An “online money game” has been defined as a service 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. This is an expansive definition, and is likely to cover all major gaming platforms like Dream11, Winzo, MPL etc.
5 Important Keypoints
- In Against that backdrop, here’s the Online Gaming Bill explained in five points:
- Promotion and recognition of esports : Under the Online Gaming Bill, esports will be recognised as a legitimate form of competitive sport in India. The Union Ministry of Sports will frame guidelines and standards for conduct of esports events in India, as well as establishment of training academies, research centres and technology platforms. The bill also provides for incentive schemes, awareness campaigns and integration of esports into broader sports policy.
- Promotion of social and educational games : The Online Gaming Bill allows the government to “recognise, categorise, and register” online social games. That will be brought on by building platforms for development and distribution of safe, age-appropriate social and educational games. A special emphasis will be laid on cultural and educational games aligned with Indian values.
- Prohibition of harmful online money games : The Online Gaming Bill proposes a complete ban on offering, operating or facilitating online money games, irrespective of whether based on skill, chance, or both. These games cannot be advertised or promoted on any form of media. Banks and payment systems are barred from processing payments.
- The online money games, which are currently operational in the country, will be blocked under the Information Technology Act, 2000.
- Establishment of an online gaming authority : The bill proposes to set up a national online gaming authority for oversight. Its functions would include:
- Categorisation and registration of online games
- Determination of whether a game qualifies as a money game.
- Handling complaints and grievances related to online games.
- This body will be responsible for issuing guidelines, orders and codes of practice to ensure compliance with the laws of the land.
- Offences & Penalties : The bill proposes imprisonment up to three years and/or fine of up to ₹1 crore for entities involved in or facilitating online money gaming.
- Advertising such games will attract a penalty of ₹50 lakh or up to two years of imprisonment. Any financial transaction related to money games will result in imprisonment of up to three years and/or a fine of up to ₹1 crore. A repeat offence would attract enhanced penalties, including jail for 3-5 years and fine of up to ₹2 crore.
- Indian lawmakers feel an outright ban on online money gaming would be more effective than regulation, considering the financial ruin caused to many households through “manipulative design features and addictive algorithms”, according to the media statement.
What’s At Stake
- If the Bill is implemented in its current form, it will be a death blow to the online real money gaming industry, which is projected to be a $9 billion market by 2029. The industry also faces a 28 per cent Goods and Services Tax (GST), with proposals to increase the rate to as high as 40 per cent. The online gaming industry is a sunrise sector in the country, with a collective enterprise valuation of over Rs 2 lakh crore.
- Official data shows GST revenues jumped sharply after the Council’s decision in July 2023 to impose a uniform 28 per cent levy on online gaming, horse racing and casinos with effect from October 1, 2023. Union Finance Minister Nirmala Sitharaman had said last September that revenue from online gaming “increased by 412 per cent and reached Rs 6,909 crore in just six months… from Rs 1,349 crore before the notification issued on online gaming”. The government has calculated that banning online money games will result in a revenue loss of about Rs 15,000 crore to Rs 20,000 crore.
- As per the industry, it pays over Rs 20,000 crore annually in direct and indirect taxes. The sector has attracted foreign direct investment of over 25,000 crore till June 2022, and currently supports over 2 lakh direct and indirect jobs. According to a report by FICCI and EY from March 2025, online gaming companies in India collectively earned a revenue of close to $2.7 billion in 2024.
- These companies typically make money by taking a cut from a user’s winnings. As per the report, more than 155 million Indians engaged with real money gaming sub-segments such as fantasy sports, rummy, poker and other transaction-based games in 2024, marking a 10 per cent increase over 2023. On an average, around 110 million people played these games daily.
Conclusion
- If passed, the Online Gaming Bill 2025 would mark a significant tightening of regulations for India’s online gaming industry, particularly impacting platforms offering real-money formats.
- Several online platforms were found to have links to “financial fraud, money laundering, tax evasion and terror funding”. Also, with many of the operators based offshore, it becomes difficult to enforce state rules and taxes, the lawmakers said.
