The online gaming industry has warned that the government’s proposed Bill to prohibit all real-money games, including skill-based formats, could trigger large-scale job losses and force several companies to shut down.
Industry associations have appealed to Home Minister Amit Shah, seeking his immediate intervention to safeguard legitimate Indian gaming platforms operating responsibly.
India’s online gaming industry, one of the fastest-growing sectors of the digital economy, is reeling under shock after the Union government introduced the Promotion and Regulation of Online Gaming Bill, 2025. The draft law, tabled in the Lok Sabha on August 20 by Union Minister of Electronics and Information Technology Ashwini Vaishnaw, seeks to ban all real-money online games—including those based on skill—sparking alarm across the ecosystem.
If passed, the bill could deliver a crippling blow to the industry, which is currently valued at US$ 3.8 billion and projected to grow to US$ 9.2 billion by 2029, according to venture capital firm Lumikai. Industry bodies warn that over 20,000 jobs may be lost, more than 300 companies could shut down, and sponsorships for domestic sports leagues could shrink by 30–40%.
The 14-page bill defines “online money game” broadly as any online game—skill-based, chance-based, or mixed—that requires players to pay fees, deposit money, or place stakes with the expectation of monetary returns. The only exemption is for e-sports.
By grouping skill-based games such as rummy, fantasy sports, and prediction markets with pure games of chance, the legislation has blurred long-standing legal distinctions. “The industry has been consistent in voicing its primary concern: that a blanket ban equates legitimate, regulated, skill-based gaming platforms with predatory gambling models,” noted Ganesh Prasad, Partner at Khaitan & Co.
He warned that abrupt prohibitions without a roadmap could hurt investor confidence: “Predictability and stability in regulation are critical. Sudden prohibitions risk deterring capital and talent from entering India’s gaming ecosystem.”
Ripple effects across sports and media
The online gaming industry is a major advertiser and sponsor for India’s sports economy. Industry representatives argue that the bill could trigger a domino effect far beyond gaming companies.
“Non-cricket and grassroots sports may collapse without real-money gaming advertisers, and around 50% of franchise domestic/national level sports leagues may be closed and sponsorship revenue loss for teams and leagues could range from 30–40%. This will also reduce ad spends and lower media revenues”, according to sources.
For an industry that employs over 130,000 skilled workers, such disruptions could lead to large-scale layoffs and weaken India’s ambitions of building a global gaming hub.
Calls for a differentiated approach
Experts argue that instead of banning the entire spectrum of real-money games, the government should take a differentiated regulatory approach—classifying games of skill separately from gambling and introducing safeguards such as age-gating, spending limits, and strict KYC norms.
Anurag Dhandhi, Business Head at Probo, drew a comparison with the U.S., where prediction markets are regulated as financial markets by the Commodity Futures Trading Commission (CFTC). “At its core, opinion trading is a tool for economic insight, information aggregation, and forecasting. By fostering informed and responsible participation, it goes beyond entertainment,” he said.
He urged the government to recognize such platforms as skill-based activities: “We applaud the intent to build a progressive framework, but a blanket ban would undermine the socio-economic benefits of this sunrise sector, from financial literacy to data-driven decision-making.”
Why the government is pushing the bill
The Centre, however, argues that the rapid growth of online money games has had a “deleterious effect” on families, society, and the economy. The bill cites several concerns:
- Link to illegal activities: Cases of online gaming platforms being used for money laundering, terror financing, and fraud.
- Mental health impact: Studies linking addictive gaming with anxiety, depression, sleep disorders, and behavioural issues among youth.
- Threat to security and sovereignty: Concerns over platforms being exploited by criminal networks and terrorist organisations.
To curb these risks, the bill proposes stringent penalties: a ban on offering real-money games, with violations punishable by up to three years in prison and fines up to ₹1 crore. Promoters and influencers endorsing such games could face two years in jail and a ₹50 lakh fine.
A sector under double pressure
This legislation comes on the heels of another regulatory jolt: the government’s decision to hike GST on online gaming to 40% from 28% around Diwali last year. The higher tax burden had already dented revenues and forced smaller players out of business.
The new bill compounds those challenges, leaving the sector at risk of a regulatory overhang that may stall innovation, drive capital out of India, and shift players to unregulated offshore platforms.
While the government insists the move is necessary to safeguard citizens and national security, industry insiders believe a collaborative policy framework—balancing consumer protection with economic opportunity—would serve better.
The coming weeks will be crucial as the bill is debated in Parliament and industry stakeholders lobby for amendments. Whether India chooses to nurture its gaming ecosystem or impose a sweeping prohibition could determine the trajectory of one of the country’s most promising digital industries.
