OTT players, broadcasters could lose Rs 2,000 crore annually
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Indian Express
24 minutes ago
- Indian Express
Online gaming companies move to shut paid operations as gaming Bill gets Rajya Sabha nod
The Rajya Sabha's approval of the online gaming Bill Thursday has drawn the final curtain on India's booming real-money gaming industry. What was once a bustling digital arena of wagers and winnings now stands eerily silent, as leading platforms suspend paid play and others fold entirely. Lawmakers hail the measure as a shield against harm, but to thousands of workers and millions of players, it feels like the lights have dimmed on a once-thriving stage. Opinion trading platform Probo, in a message displayed on its app, said that 'in light of recent developments, we have paused all recharge activities in your best interest,' while requesting users to withdraw funds. Dream11, the country's biggest fantasy sports app and the Indian cricket team's main jersey sponsor, also communicated to its employees that it will wind down its real money operations. Zupee, another gaming platform, said it was discontinuing paid games, with users able to play free titles. 'Everyone will shut down paid operations for now, as the industry prepares a legal roadmap to challenge the law,' a senior gaming industry executive said. The Promotion and Regulation of Online Gaming Bill, 2025, now passed by both houses of Parliament, outlaws online money gaming services and penalises their celebrity endorsers. The Bill has been drafted over national security concerns related to online gaming platforms, including the use of digital wallets and cryptocurrencies for money laundering and illicit fund transfers, these platforms serving as potential messaging and communication grounds for terror organisations, and offshore entities circumventing Indian tax and legal obligations, among others. The government will prohibit any person from offering online games in India, failing which they could be imprisoned for up to three years, and penalised Rs 1 crore. Those promoting such platforms, such as social media influencers, will also face jail time of two years, and a penalty of Rs 50 lakh. The government will also prohibit banks and financial institutions from facilitating financial transactions on such platforms. The Bill applies to all online money gaming platforms irrespective of whether they are games of skill or chance, a distinction the industry had lobbied hard for in the past. The Bill said that the unchecked expansion of online money gaming services has been linked to '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'. The parallel proliferation of online money games accessible through mobile phones, computers and the internet, and offering monetary returns against user deposits has led to 'serious social, financial, psychological and public health harms, particularly among young individuals and economically disadvantaged groups,' it said.
Hindustan Times
24 minutes ago
- Hindustan Times
Online Gaming Bill can damage India's digital economy: K'taka IT minister
The Union government's decision to impose a blanket ban on real money gaming (RMG), with the passage of the Promotion and Regulation of Online Gaming Bill in the parliament, has drawn sharp criticism from Karnataka IT minister Priyank Kharge, who called it a 'knee-jerk reaction' that could damage India's digital economy. Online Gaming Bill can damage India's digital economy: K'taka IT minister The online gaming sector has grown rapidly in recent years, generating close to ₹20,000 crore annually through GST and income tax. Over 2,000 gaming startups operate in the country, many of them providing coding, design, and backend services for global platforms. Industry estimates suggest that more than two lakh jobs in IT, AI design, and the creative economy are linked to this ecosystem. The sector has also attracted around ₹23,000 crore in foreign direct investment (FDI) over the past five years, said Kharge. Kharge warned that the ban threatens this entire ecosystem. 'Thousands of people will be unemployed, the gaming talent pool will shrink, and allied sectors like data centres, advertising, and cybersecurity will be hit. If the government is talking about building a $10 trillion digital economy, how does shutting down this vertical send the right signal to global investors?' he said. A senior government official had told HT that the Centre weighed the revenue from online money games against their social costs and concluded that the latter outweighed the financial gains. The official added that 45 crore players have lost ₹20,000 crore to online money games. The government is also of the view that these money games not only create a financial burden but also contribute to behavioural changes like addiction and related suicides among youth. Beyond jobs and revenue, Kharge argued that prohibition will push users to unregulated offshore platforms. Industry observers have also raised similar concerns, pointing out that platforms based in China and Eastern Europe often operate without mechanisms like KYC or tax compliance, raising risks of money laundering, data theft, and even terror financing. The minister said the industry itself has been demanding regulation, not prohibition. 'Addiction won't end by banning platforms. Instead, users will flock to offshore servers where no safeguards exist. If they lose money there, who will they complain to?' he asked. Estimates suggest that India could lose nearly ₹8 lakh crore annually to unregulated foreign operators if players migrate en masse. Government officials have acknowledged that the ban will affect the industry but maintain that companies can reorient themselves towards recreational and casual games that do not involve monetary stakes. Kharge, however, drew a comparison with India's earlier attempt to block pornography websites, saying such bans only drove users to VPNs and unregulated domains. He also criticised the timing of the Online Gaming Bill, describing it, along with other recent pieces of legislation like the the Constitution Amendment Bill, 2025, the Government of Union Territories (Amendment) Bill, 2025, and the Jammu and Kashmir Reorganisation (Amendment) Bill, 2025, as a 'diversion' from the Election Commission's ongoing scrutiny of electoral rolls. 'It is common sense that illegal markets will threaten national security. How many URLs can you block? They will just reappear under different domains. And if servers move abroad, they go beyond India's ambit,' Kharge said. HT reached out to IT ministry officials for a comment but did not immediately receive a response.
Mint
an hour ago
- Mint
India's Betting-App Ban Will Stoke Money Laundering
(Bloomberg Opinion) -- India has stunned its online gaming industry by moving legislation to ban real-money stakes. At first blush, the reasons for hitting the kill switch appear valid. Rising addiction, money laundering and financial frauds through these apps are all serious problems. However, I wonder if policymakers have thought through the implications. All that prohibition ever does is to push users toward moonshine — in this case offshore casinos. They will take in wagers and pay out winnings via crypto, giving a boost to illegal, two-way money flows. With fantasy sports, putting real money behind players' on-field performance has been elevated to a game of skill, at least in the eye of the law. Add the usual suspects — pandemic ennui, the rise of work from home, and an explosive growth in mobile entertainment — and the world's most-populous nation was starting to emerge as a promising online-gaming market. Even a hefty 28% tax on deposits failed to deter the popularity of apps such as Dream11, Games24X7 and Mobile Premier League. Yet, it still had a ways to go. The $3.8 billion domestic betting industry was nowhere near fulfilling the $100 billion of India's gambling demand that leaks to overseas sites each year, according to analysts' estimates. A bulk of these bets are on cricket, especially during the two-month-long Indian Premier League. By deciding to gut the local industry, the government is saying goodbye to any hope of stanching the outflow. It's also forswearing more than $2 billion in annual tax revenue. Some of the activity, and hence tax collection, will switch to physical venues, such as publicly traded Delta Corp.'s licensed casinos in the tourist destinations of Goa and Sikkim. Those who gamble to just pass the time — as is increasingly the case for a vast army of unemployed youth — might switch to social-gaming options for non-monetary payoffs. Those in-app rewards will get bigger and more sophisticated now as more brands and influencers latch on to them in the absence of other options. E-sports, too, may get a leg up, thanks to the legitimacy accorded to them in the same law that's seeking to ban online gambling. The financial system might also heave a sigh of relief. The local cricket-betting apps were beginning to strain banks' infrastructure by taking wagers in real time from rupee-denominated deposit accounts. As I wrote during this year's IPL season, lenders that hold the accounts of these legitimate money-gaming sites were under pressure from clients to not miss any of the funds coming their way. All of that madness will end. However, new headaches will emerge. Those who got addicted to fantasy-sports betting when the government had no problem with it won't just give up the habit. They will look for their fix elsewhere. Many international sites accept players from India; they don't even insist on rigorous 'know your customer' checks. Just a username, email, and password are often enough. A customer who makes a deposit in Bitcoin or Ether and takes winnings the same way would bypass the banking system altogether. India already has nearly 100 million crypto wallets. The money-laundering menace that the policymakers are trying to address could get worse. These offshore gambling proceeds will become a source of crypto liquidity for residents looking to jump controls on capital outflows. Some of those transfers will be proceeds of illicit activity; nearly all of them will avoid detection. And then local lenders will complain that they are losing precious deposits without really knowing where they're going. The other unintended impact may be felt by kabaddi, a traditional sport popular across the subcontinent. Fantasy-sports apps, which have a self-interest in opening new areas to betting, have been some of the more aggressive sponsors of the annual Pro Kabaddi League, helping to revive enthusiasm for the game over the past decade. Now someone else will have to step up to the plate. The ban will come with a possible three-year jail term for operators in addition to fines. That, too, seems like overkill. It's best to channel an overburdened law-enforcement system toward real scams, like when a gang set up a fake Indian Premier League tournament at a remote farm in Gujarat with laborers acting as players to hoodwink Russian gamblers. According to a report in the Guardian, that 'IPL' went all the way to quarter finals before the racket was busted. Expect more such cases of serious fraud and criminality as precious policing and judicial resources are wasted on shutting down online-betting shops that enjoyed legitimacy until recently. In that respect, too, the ban may resemble the US Prohibition Era. More From Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News. More stories like this are available on
