Online gaming companies prepare for legal battle against new bill
Empower your mind, elevate your skills
In the aftermath of the Lok Sabha passing the Promotion and Regulation of Online Gaming Bill, 2025 , senior executives of companies in this space are huddling together and deciding on next steps, which will include approaching the courts against the proposed law.Executives and lawyers told ET that the legal challenges will look to test the Supreme Court 's stance on skill-based gaming against the proposed law.As per the bill, the definition of online real money gaming looks to lump together skill-based games and chance-based games under a single regulatory net, and this could endanger skill-based operators, which have so far survived legal scrutiny.'The Punjab and Haryana High Court was actually the first to say back in 2017 that fantasy sports should be treated as a game of skill. Since then, the Supreme Court has repeatedly turned down review petitions challenging that view. But the new law has changed the game completely…acting almost like a killswitch for the industry. Plans are being finalised to challenge the bill in court,' a senior executive said.The proposed law, which also seeks to set up a regulator to decide which games can legally operate, risks stripping that protection from fantasy sports, rummy, e-poker, and other skill-led formats offered by companies such as Dream11, Gameskraft, Games 24x7, Pokerbaazi, Rupee, and Winzo Games, people said.'While typically any new statute passed by parliament gets tested on its own merits, in this case, given past protections, especially in the context of games of skill, there could be a degree of overlap that gets tested,' said Mihir Rale, partner, Cyril Amarchand Mangaldas.On whether real money gaming companies will have constitutional protection, Rale said, 'This appears to be virtually an existential question for the sector. That factor alone demands a degree of care and scrutiny to be applied to its passage and judicial oversight that will likely follow.''The key question is whether this is the only way that public interest can be served and no other measure that preserves businesses or jobs while effectively remedying public harm is possible,' he said.In a letter to home minister Amit Shah on Tuesday, India's leading online gaming industry associations urged his intervention in the government's move to introduce legislation to ban real-money games, warning that it could cripple the sector, cost the exchequer nearly Rs 20,000 crore annually, and drive millions of users to unsafe offshore operators.In a joint letter to the home minister, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) said the bill, which seeks to prohibit all online games with a monetary component, including those based on skill, would 'strike a death knell' for the industry.'While an Act of Parliament can override earlier Supreme Court rulings by changing the definition of gambling, such a law must still survive constitutional scrutiny, and a blanket prohibition is open to being struck down as disproportionate and arbitrary,' Nazneen Ichhaporia, partner, ANB Legal, said.The online gaming industry employs more than 200,000 people, has attracted Rs 25,000 crore in foreign direct investment (FDI), and contributes over Rs 20,000 crore in annual tax revenues, they said.The bill also seeks to curb online real money gaming by declaring any advertisement or promotion of such games as an offence, while also banning the facilitation of any transaction or authorisation of funds by banks or financial institutions for such games.With a central legislation, the government has moved away from fragmented state regulations on gambling and betting – by looking to ban real money games in one fell swoop.'Gaming is a state subject under the Constitution, and there could be an argument that prohibiting an entire sector that has been in existence for years and contributes revenue is a violation of Article 19(1)(g) (which accords the right to trade). However, the Union government seems to have relied on…its power to regulate the internet and interstate commerce. We will certainly see this being debated in the courts on constitutional grounds,' said Aprajita Rana, partner at corporate law firm AZB & Partners.
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