Real money gamers lose over long term, apps did not check massive user losses: Vaishnaw
Union minister for IT and broadcasting Ashwini Vaishnaw said the clampdown on online gaming is not a 'knee-jerk' reaction, but a response to thousands of complaints from users who have lost thousands of crores against companies like Dream11 and RummyCircle.
'Without checks and balances, these companies have time and again refused to safeguard the interest of citizens,' Vaishnaw said in an interview. 'We found irrefutable proof that the algorithms of online gaming firms are built in such a way that no user can ever emerge as a net winner in the long run.'
Lok Sabha on Wednesday passed the Promotion and Regulation of Online Gaming Bill, 2025, approved by the Union cabinet a day earlier. The bill now goes to the Rajya Sabha and further to the President for assent, before it becomes law. Vaishnaw said that if the bill does not go to a special committee for vetting, his ministry will move to notify the bill tentatively 'within the next three months.'
According to three government officials, Indians lose nearly ₹ 15,000 crore every year playing so-called real-money games, where players can win or lose money based on the outcome of the game. Data compiled by two of the top gaming apps shows India has 500 million gamers hooked to fantasy sports, rummy, poker and other competitive games.
The law will likely face legal challenges. It is almost certain to be brought before the Supreme Court, which is already hearing a separate case on the tax liabilities of online gaming companies.
While the government expects a legal pushback, it does not expect the law to go through major changes, Vaishnaw said. 'We're not looking to regulate gambling—we're regulating gaming that leads to users losing money and the quality of our society degrading significantly. This is very much within the Centre's ambit,' he said.
The ban drew sharp criticism from the online gaming industry. Jay Sayta, a lawyer representing multiple gaming firms in the Supreme Court, said the bill would 'destroy the startups' and push users toward unregulated offshore operators.
The gaming industry, which has not yet commented publicly, has been reaching out to the government for intervention. The top four —Sporta Technologies, Gameskraft Games24x7 and Galactus Funware, which run Dream11, RummyCulture, RummyCircle and Mobile Premier League respectively— on Tuesday wrote to Union home minister Amit Shah through industry bodies, seeking intervention in the matter. The companies pleaded that the ban would lead to nearly 400 companies shutting shop and hundreds of thousands of job losses.
Vaishnaw acknowledged the lack of direct industry consultations, but said the law was based on "years of industry conversations" and "robust inter-ministerial discussions." He added that while the ban might lead to a 1% dip in Goods and Services Tax (GST) revenue, protecting citizens remains the government's top priority.
Despite industry warnings of up to 200,000 job losses, Vaishnaw believes the law will ultimately promote esports and casual gaming, fostering a new, safer ecosystem. He hinted that a mechanism may be created for companies to seek recourse if they can prove they have adequately addressed consumer harms.
The ban also deals heavy blow to hundreds of social media influencers long patronized by online gaming platforms. Industry insiders estimate that such endorsements account for 20-30% of the marketing revenues for mid-tier influencers.
There was unanimous agreement across every party involved that this law has been required for a very long time, and we've taken a step in the right direction by cracking down on an industry that for long has harvested financial and physical harm to many users," he said.
Lawyers involved in the representation said that as of Wednesday evening, no stakeholder of the industry received any indication that the Centre was willing to hear from any of the online gaming startups.
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