ETtech Explainer: What's the way forward for gaming industry after Lok Sabha clears Online Gaming Bill?
Anyone advertising such services could face up to two years of jail and/or a fine of up to Rs 50 lakh.
Banks and financial institutions facilitating transactions for such games will also face penalties, including up to three years in jail or a fine of Rs 1 crore.
The Lok Sabha on Wednesday passed the Promotion and Regulation of Online Gaming Bill , 2025, seeking a blanket ban on real money gaming in India, minutes after it was introduced in the House.The government says this move addresses the risks of fraud , money laundering, and terror financing and encourages the growth of e-sports and skill-based online games in the country. However, industry stakeholders warn that the outright prohibition could backfire – pushing users to illegal offshore gambling and unregulated platforms.ETtech explains the details of the bill and what happens next.According to the bill, online money games are those played by the user by 'paying fees, depositing money, or other stakes, in expectation of winning in return for money or other stake, irrespective of whether such game is based on skill, chance, or both.'These include popular games such as Poker, RummyCircle , Junglee Rummy, WinZO Ludo, BigCash, Zupee, and Money Clicker, where players put in money with the expectation of cash rewards. In contrast, skill-based games such as chess, card games played without stakes, arcade games, puzzles, and even poker in a non-monetary context are seen as tests of ability and strategy rather than betting and continue to be encouraged under the bill.Meanwhile, it excludes e-sports and online social games in both casual entertainment and skill-based formats, which do not involve any monetary stakes.According to the draft bill, which was cleared in the Lok Sabha today, there will be a complete ban on online money games falling under its definition. As a result:The representatives of the Rs 27,438 crore online money gaming sector fear the prospect of being shut down . Companies such as Dream11, MPL, Games24x7, Winzo, Zupee, and publicly listed Nazara Technologies, which has stakes in Classic Rummy and PokerBaazi, could be among those hit by the legislation.However, legal experts noted that there will be no immediate effect.'There will be no immediate effect, as the bill has only just been passed in the Lok Sabha. It will next move to the Rajya Sabha for discussion and then to the President for assent, so it will take some time before it becomes an Act,' Apeksha Singh, a commercial lawyer at the Bombay High Court, told ET.The online gaming sector currently employs more than 200,000 professionals across over 400 startups and has drawn Rs 25,000 crore in foreign direct investment (FDI).Industry leaders warn that this bill will choke foreign investment and cost the exchequer an estimated Rs 20,000 crore in lost taxes. An allied ecosystem that spends nearly Rs 6,000 crore annually on advertising, technology, and infrastructure could also take a hit.Prior to the bill getting passed in Lok Sabha, the All India Gaming Federation (AIGF), the E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) wrote a joint letter to home minister Amit Shah, saying the draft bill, which seeks to prohibit all real money games, including those based on skill, would 'strike a death knell' for the entire industry.After the bill was passed in the Lok Sabha, IT minister Ashwini Vaishnaw said that online money gaming has become a bigger issue than drugs in the country, and many youngsters have died by suicide after losing their savings in such games.In an interview with ET Now, Vaishnaw said that there are three segments to the bill — e-sports, online social gaming, and online money gaming.'This bill aims to promote the first two segments, wherein an authority will be created. There will be more schemes, employment, and the creator economy grows,' he said, adding that the bill will protect from the harm that the third segment – online money gaming – causes.According to the stakeholders, the outright prohibition could backfire, pushing users to illegal offshore gambling and unregulated platforms.'A restriction will push millions of Indian users toward offshore betting websites, matka operators, and unregulated platforms, exposing them to fraud, addiction risks, and zero consumer protection,' said Rameesh Kailasam, president and CEO of IndiaTech.org, an industry group representing internet startups. 'The bill seems aimed at offshore gambling and betting apps but ends up targeting law-abiding, tax-paying Indian startups.''While the government is pursuing a comprehensive ban on online gaming, its enforcement poses significant challenges,' said Rishi Agrawal, chief executive and cofounder of Teamlease Regtech, a regulatory compliance management company. 'The internet's global accessibility makes it likely that new gaming platforms will emerge worldwide, targeting vulnerable Indian youth and heightening risks such as cyberbullying, identity theft, phishing, and other scams.'Further, industry representatives are urging the government to pursue 'smart regulation' that distinguishes games of skill from games of chance, ensures user safety and responsible gaming, enforces grievance redressal, and clarifies taxation policies.
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