The Hindu: Published on 26 August 2025.
Why in News?
The Promotion and Regulation of Online Gaming Bill, 2025 was passed by the Lok Sabha (Aug 20), Rajya Sabha (Aug 21), and received Presidential assent on Aug 22, becoming law.
The law bans Real Money Games (RMGs) while promoting e-sports and social gaming.
Triggered by rising concerns of financial losses (~₹15,000 crore annually), addiction, suicides (32 in Karnataka in last 31 months), and financial fraud linked to RMG platforms.
Key Provisions of the Act:
Three Categories of Online Games:
- E-sports → Recognised under the National Sports Governance Act, competitive, skill-based, with prize money.
- Social Gaming → Casual, recreational, or educational games for fun, without financial stakes.
- Real Money Games (RMGs) → Games involving fee payment with expectation of monetary gain (Poker, Rummy, Fantasy Cricket, Ludo, etc.) → Banned completely.
Penalties:
- Offering RMGs: 3 years jail + ₹1 crore fine.
- Advertising RMGs: 2 years jail + ₹50 lakh fine.
- Offences: Cognisable and non-bailable under BNSS, 2023.
Regulation:
Central government to set up a regulatory authority for online games.
CERT-IN empowered to block/disrupt illegal apps, with help from Interpol if foreign operators are involved.
No punishment for players, only operators/advertisers.
Funds can be allocated from the Consolidated Fund of India for promoting e-sports/social gaming.
Why has the Government Brought this Act?
Consumer Protection: Growing complaints of massive financial losses by users.
Public Health: WHO links RMGs to compulsive behaviour, psychological distress, suicides.
Financial Integrity:
Money laundering & terror funding through gaming portals (Parliamentary Panel, 2023).
Tax evasion → ₹2,000 crore evaded (Financial Intelligence Report, 2022).
GST fraud → ₹30,000 crore under-reported.
Chinese app frauds (FIEWIN scam of ₹400 crore).
Opaque Algorithms: Games rigged to ensure players cannot emerge net winners.
Law Enforcement Challenge: Offshore companies operating outside Indian law.
WHO’s Position
WHO warns RMGs cause:
- Compulsive gaming addiction.
- Mental health issues.
- Financial ruin.
- Family/social breakdown.
Industry Concerns:
2 lakh jobs at stake across 400+ companies.
Loss of investments in gaming start-ups.
Celebrities endorsing platforms (Dhoni, Ranbir Kapoor, Aamir Khan, Hrithik Roshan, Sourav Ganguly) may face brand damage.
Industry argues that “skill-based” games (Fantasy Cricket, Rummy, Poker) should not be equated with gambling.
Judicial & Constitutional Issues:
Federalism: Betting and gambling fall in State List (Entries 34 & 62). Several States (Telangana, Andhra Pradesh, Tamil Nadu) have already banned RMGs earlier. Centre’s intervention may be contested.
Supreme Court Precedent: Earlier said Rummy & Fantasy Sports involve skill → not gambling.
Current SC Status:
Granted stay on GST notices against gaming firms.
Yet to decide if “skill-based” games can be equated with gambling.
Awaited ruling on 28% GST classification for online gaming.
Article 19(1)(g): Critics argue Act violates the right to trade/occupation by not distinguishing between skill & chance games.
Differences Between Segments:
E-sports: Recognised as sport, competitive, structured, regulated, prize-based.
Social Games: For fun/education, non-monetary, casual.
RMGs: Monetary stakes, addictive, manipulative algorithms → banned.
Possible Loopholes:
Gaming companies may bypass ban using:
- VPNs.
- Virtual tokens & in-game credits converted later to money.
- Offshore servers.
- The Act lacks specific provisions to prevent minor participation in social gaming or e-sports.
Impact:
Positive: Consumer protection, financial integrity, checks on addiction-driven suicides, curb tax evasion & money laundering.
Negative: Job losses in gaming sector, loss of innovation & investment, potential constitutional challenges, enforcement difficulties with offshore platforms.
Summary:
The Online Gaming Act, 2025, seeks to ban Real Money Games citing addiction, suicides, fraud, and tax evasion, while promoting e-sports and social gaming. However, it faces challenges over constitutional validity, economic impact, and enforcement feasibility. The Supreme Court’s forthcoming decisions on GST and “skill vs. chance” will critically shape the future of India’s gaming industry.
