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Why India wants to ban online real-money games like fantasy sports, lotteries
India is planning to ban online games played with money, in a major setback for an industry that has attracted billions in investment but remains controversial. On Wednesday (August 20), Union Minister of Electronics and Information Technology Ashwini Vaishnaw introduced the Online Gaming Bill in the Lok Sabha.
The Promotion and Regulation of Online Gaming Bill, 2025, seeks to prohibit real-money online gaming, imposing stricter penalties on such platforms and their celebrity promoters. It also aims to encourage e-sports and online social games.
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Let's take a closer look.
What's in the Online Gaming Bill?
The Online Gaming Bill seeks to ban online gaming platforms, citing psychological and national security concerns.
It defines 'online money game' as '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'.
If passed, the bill would outlaw all online betting and gambling, including fantasy sports and Poker, Rummy and other card games, as well as online lotteries, the Ministry of Electronics and IT said in a statement, as per ANI.
Section 2(h) of the bill defines 'online money gaming service' as a service offered by a person for entering or playing an online money game.
The proposed ban applies to all money-based online games, whether based on skill or chance, and advertisements for such platforms. The draft bill also prohibits banks and financial institutions from facilitating financial transactions on these gaming platforms.
Violators can face up to three years in prison and a fine of up to Rs 1 crore for offering or facilitating online money gaming.
The Centre's bill proposes to ban all money-based online games, whether based on skill or chance. Representational Image/Pixabay
The bill also proposes punishing those promoting these platforms, such as social media influencers, who can be imprisoned for two years and face a penalty of Rs 50 lakh.
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Major gaming platforms, such as Dream11, Games24x7, Winzo, GamesKraft, 99Games, MPL, KheloFantasy, and My11Circle will be directly hit by the proposed ban.
E-sports to be promoted
The Online Gaming Bill exempts e-sports from the ban. The government wants to recognise e-sports as a legitimate form of competitive sport in the country. To encourage e-sports, the Ministry of Youth Affairs and Sports will set up a dedicated framework.
The government could also mull promoting and recognising 'online social games' for educational and recreational purposes. While these could include a subscription fee for entry, there will be nothing in the form of a stake or wager.
Notably, the Online Gaming Bill empowers authorised officials to conduct search operations at physical and virtual places, even without a warrant.
'…any (authorised) officer…may enter any place, whether physical or digital, and search and arrest without warrant any person found therein who is reasonably suspected of having committed or of committing or of being about to commit any offence under this Act,' the Bill states.
Why ban on online money gaming
The government says it wants to ban such online games as they cause financial harm and are addictive.
As per the Bill, the unregulated expansion of online money gaming services has been associated with 'unlawful activities including financial fraud, money-laundering, tax evasion, and in some cases, the financing of terrorism, thereby posing threats to national security, public order and the integrity of the State'.
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It said the law was needed due to the 'deleterious and negative impact of online money games on the individuals, families, society and the nation and given the technical aspects including the very nature of the electronic medium used for online money games, the algorithms applied and the national and transnational networks.'
Reflecting the Government's commitment to a safe, secure, and innovation-driven Digital India, the Promotion and Regulation of Online Gaming Bill, 2025 strikes a balanced path—encouraging innovation and youth engagement through safe and positive online gaming, while firmly… pic.twitter.com/dhM4LaR2mC — Ministry of Information and Broadcasting (@MIB_India) August 20, 2025
The Statement of Object and Reasons of the Bill read that 'the unchecked and widespread proliferation of online money games which readily accessible through mobile devices, computers, and the internet, and offering monetary returns in exchange for deposited funds has led to grave social, economic, and psychological consequences across the country'.
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'These platforms often promote compulsive and addictive behaviour, resulting in financial ruin, mental health disorders, and increasing incidents of fraud and exploitation', the Bill said, adding such games often use 'manipulative design features, addictive algorithms, bots and undisclosed agents, undermining fairness, transparency and user protection, while promoting compulsive behaviour leading to financial ruin'.
Reactions to the proposed ban
The government's plan to put a blanket ban on online money gaming has sparked criticism from various quarters.
The All India Gaming Federation (AIGF) has warned of a devastating fallout for the industry if the bill is implemented without changes.
Seeking Union Home Minister Amit Shah's intervention, it said there was a need for 'progressive regulation' and not a ban.
'Such a blanket prohibition would strike a death knell for this legitimate, job-creating industry, and would cause serious harm to Indian users and citizens. We firmly believe that progressive regulation and not prohibition is the way forward for the legitimate Indian industry. With your guidance, India can set a global example by building a safe, transparent, and thriving digital gaming ecosystem,' AIGF said.
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An industry insider told IndiaToday.in that the government's approach is 'misguided' and could be more harmful than beneficial. 'A blanket ban will not protect Indians, it will harm them. It will kill jobs, drive users to illegal gambling, and violate the Constitution,' the source said, warning that a ban will only boost illegal offshore operators, which they described as 'one of the biggest national security threats to the country today.'
India's online gaming industry is valued at $3.7 billion today, depending largely on real-money games (RMG). It is expected to further grow to $9.1 billion by 2029.
Industry estimates that it creates Rs 31,000 crores in annual revenue and pays Rs 20,000 crores in direct and indirect taxes. The sector has attracted foreign direct investment of more than Rs 25,000 crore till June 2022. It also supports over two lakh direct and indirect jobs.
E-sports stakeholders have hailed the bill, emphasising the need to draw a line between gaming and betting.
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Speaking to Hindustan Times, Akshat Rathee, Co-founder and Managing Director of NODWIN Gaming, said: 'The government's intent to recognise and promote e-sports, as highlighted in the recent bill, is an encouraging step towards building a structured and globally competitive ecosystem. However, for this vision to truly materialise, it is critical that the terminology used in the bill, particularly the distinctions between e-sports, online gaming, online social gaming, and online money gaming be clearly defined and uniformly understood.'
Congress MP Shashi Tharoor has also criticised the ban on online money gaming, saying it would only push the industry underground and bolster criminal networks.
'I had written a very long article on the argument that by banning online gaming we are simply driving it underground, whereas it could be a useful source of revenue for the government if we legalise it, regulate it and tax it,' he was quoted as saying by PTI.
Tharoor also pointed out that several countries have analysed the issue in detail and concluded that regulation and taxation can generate funds for social causes, while prohibition merely enriches 'criminal mafias'.
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He said on X that the bill should at least have been referred to a parliamentary committee 'to consider all the pros and cons before rushing it into law'.
With inputs from agencies
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