India's Online Gaming Bill 2025: Regulation or disguise for prohibition?
It is undeniable that the Bill's intentions are well placed, as it attempts to address problems of addiction, consumer protection and prevention of money laundering. However, in practice, it may inadvertently create an illegal betting economy and encourage the gambling industry. This may undermine India's domestic gaming sector and its digital Make in India ambitions. The areas of concern include: Disadvantages Indian innovator e-Sports and casual gaming sectors are dominated by international giants, whereas India's domestic gaming companies are in the skill-based money games space. Out of India's 488 mn gamer base, more than 155 mn are engaged with real-money gaming (RMG) sub-segments like fantasy sports and other transaction-based games, making it the largest segment in the country's gaming economy. This could distort the market under the guise of consumer protection. Moreover, by equating legitimate businesses with gambling, the Bill risks setting a dangerous precedent that not only undermines judicially recognised distinctions between games of skill and games of chance, but also violates the constitutionally guaranteed right to trade and occupation under Article 19(1)(g), thereby affecting multiple stakeholders who have built a value chain around this sector. Overlooks money mechanics in casual gaming The Bill overlooks real-money mechanics in casual gaming, social gaming and video gaming. If addiction and overspending are the concern, the real danger lies in in-app purchases, microtransactions and loot boxes, which are key features embedded in such games. These monetisation models rely on psychological nudges that resemble gambling mechanics. Players routinely spend on skins, upgrades and loot boxes, which use triggers that encourage repeat spending, as suggested by the 2023 IAMAI report.Belgium and the Netherlands have classified loot boxes as gambling and imposed bans. Meanwhile, Japan enforces strict disclosure norms without prohibiting the mechanic altogether. India should analyse these models and adapt them while keeping in view indigenous ecosystems.
Prohibition doesn't work Instead of reducing harm, prohibitions create black markets that are harder to regulate and far riskier for users. In states where RMG is banned, such as Telangana, over 3,900 betting platform-related violations were documented in 2025. Additionally, 25 celebrities and influencers faced charges for endorsing prohibited betting platforms. Moreover, prohibition risks discounting the judgement of adult gamers. Many view RMG as a form of entertainment or relaxation and should have the right to make that choice under a regulated regime. Regulation must avoid paternalism, providing safeguards without underestimating user agency. Skill vs chance Courts have reiterated that games like rummy and fantasy sports involve a substantial degree of skill and cannot be equated with gambling. By putting all online money games into the same category, the Bill ignores judicial precedent, stifles skill-based industries and chills investor confidence in a fast-growing digital sector. By equating the two, it erases this intelligible difference and treats legitimate skill-based industries as if they were indistinguishable from betting or lotteries. Weak framework While the Bill hints at the creation of a central regulatory authority, this stands in stark contradiction to MeitY's 2023 amendment to the IT Rules 2021, which had envisioned industry-led self-regulatory bodies with GoI oversight. The sudden pivot to a stringent central authority reflects a dichotomous approach. Instead, GoI could have institutionalised responsible gaming measures, mandated transparency and created safeguards for vulnerable groups such as minors. Such a model would align better with global best practices and balance innovation with consumer protection.Going forward, GoI must: Create a transparent system that mandates disclosure of odds, pricing and spending limits on loot boxes and in-app purchases.
Initiate age-appropriate safeguarding protocols with verification mechanisms and parental oversight in cases of minor gamers.
Adopt a self-regulatory model where compliances are monitored by an independent regulator. Together, these measures can construct a transparent, user-friendly and accountable ecosystem. To attain Aatmanirbhar Bharat, GoI must strive to make India a hub of a world-class gaming ecosystem. User protection must go together with technological innovation to uphold the essence of Viksit Bharat. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Swiggy, Tencent backer Prosus gets Rajinikanth fan to script India AI play
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