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The Union government’s draft bill to ban online real-money gaming (RMG) platforms, tabled in the Lok Sabha on Wednesday, grants authorities the power to search any premise and arrest, without a warrant, any person under suspicion of violation.
The Bill aims to promote and regulate esports, educational games, and social games, while completely prohibiting the offering, operation, facilitation, advertisement, promotion, and participation in online money games. “No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service,” It states.
However, there have been concerns raised by industry gaming bodies, claiming that the move would strike a “death knell” for a legitimate, fast-growing sector that has been contributing significantly to the economy.
Also Read: Online Gaming Bill introduced in Lok Sabha: From penalty to punishment, a summary of key provisions
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The industry highlighted that online skill gaming is a sunrise sector with an enterprise valuation of over Rs 2 lakh crore, generating Rs 31,000 crore in annual revenue and contributing more than Rs 20,000 crore in taxes.
E-sports and social games to get legal backing
According to sources, the Online Gaming Bill, 2025 seeks to clearly distinguish between real-money games and other forms of online gaming.
Under the Bill, no legal action will be taken against individuals who play online games. However, strict provisions will apply to those who operate real-money gaming platforms or endorse them, making them liable for legal action.
For the first time, e-sports will be brought under a legal framework. Until now, there was no regulation governing e-sports, but with this law, they will be formally recognised and regulated. Similarly, online social games will be legalised and promoted, with the government introducing schemes to support their growth. Authorities believe these games can help improve mental health and foster creativity.
At the same time, the Bill takes a tough stance against online money games, which have been linked to fraud, cheating, money laundering, and even terror financing. Those who provide such services, facilitate fund transfers, or endorse real-money games will face prosecution.
Also Read:Online Gaming Law: Rs 2 lakh crore online gaming industry flags 3 concerns as Centre tables new Bill
The central government has expressed concern that millions of families have suffered financial harm due to online money games. In contrast, two-thirds of the broader online gaming sector—comprising e-sports and social games—will be encouraged to expand.
The government had earlier held consultations with online gaming companies, asking them to form a self-regulatory organisation (SRO) with no conflict of interest. However, the industry failed to come together to establish such a body.
Now, a dedicated authority—on the lines of the National Highways Authority of India (NHAI)—will be created to regulate online gaming, sources said.
According to sources, the Online Gaming Bill will be implemented by states. Nearly 45 crore people across the country have lost money in online gaming, while the annual losses from such platforms are estimated at around Rs 20,000 crore.
To oversee implementation, the Bill also calls for the establishment of a dedicated regulator. For game developers, this regulatory clarity is expected to unlock new opportunities and safeguard jobs. Additionally, Google and Apple will be directed not to list real-money gaming apps on their platforms.
Explained: What bill empowers authorities to do
The bill, titled ‘the Promotion and Regulation of Online Gaming Bill 2025’, focuses on curbing online money games, where players stake money with the expectation of financial returns, regardless of whether they are skill-based or chance-based. Consequently, the bill aims to promote e-sports and social gaming, which are more skill-based.
Further, the draft bill bans online money gaming services and their advertisement and restricts banks and financial institutions from transacting with these platforms.
The draft bill allows any officer appointed by the central government to “enter any place” and “search or arrest without a warrant any person” reasonably suspected of committing or about to commit an offence under this Act. The Bill defines “any place” as any premises, building, vehicle, computer resource, virtual digital space, electronic records, or electronic storage device.
The Bill reads, “The officer may access computer resources, virtual digital spaces, electronic records, or storage devices by overriding any access control or security code if such code is unavailable.”
Tax revenue at stake, penalties proposed
As RMG platforms were already under a 28 per cent GST on deposits (introduced in 2023), with proposals of increasing it to 40 per cent, the bill’s ban could erode tax revenue worth over Rs 20,000 crore.
The government, however, seems determined to curb the rise of online money gaming, which has led to addiction, financial loss, and crime. Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, stated in an appendage to the bill, “These platforms often promote compulsive and addictive behaviour, resulting in financial ruin, mental health disorders, and increasing incidents of fraud and exploitation.”
The bill proposed three years of imprisonment and Rs 1 crore in fines for those found offering, helping, abetting, inciting, or indulging in RMG. Further, the bill proposed 2 years in prison or a Rs 50 lakh fine for advertising, promoting or sponsoring such games.
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