Adv. Pawan Shukla
State Law Officer
High Court, Lucknow
The Promotion and Regulation of Online Gaming Act, 2025, represents a landmark shift in India’s regulatory approach to the digital entertainment economy. Passed by the Lok Sabha on August 20 and the Rajya Sabha on August 21, and receiving presidential assent on August 22, the Act introduces the country’s first comprehensive statutory framework for online gaming. It responds to years of fragmented state legislation, inconsistent judicial rulings, and mounting public concern over the rise of real-money gaming platforms that have proliferated in India’s rapidly expanding digital ecosystem. At its core, the Act introduces an unambiguous prohibition on “online money games,” defined broadly to include any game where users stake or deposit money, regardless of whether the game involves skill or chance. This definition marks a deliberate departure from longstanding Indian jurisprudence that distinguished between games of skill, which were considered legal, and games of chance, which were not. In practice, this shift erases the legal foundation upon which fantasy sports and real-money skill-based games like rummy and poker operated. By rejecting the skill-chance dichotomy, the Act criminalizes an entire sector that had positioned itself as compliant with earlier judicial precedent. The legislative intent, however, is not grounded in technical debates over skill and chance but in consumer protection. Parliamentarians and ministry officials stressed the severe consequences of money gaming: addiction, indebtedness, family breakdown, and in extreme cases, suicide. Critics have long accused real-money platforms of exploiting behavioral vulnerabilities, particularly among young users, by gamifying risk and fostering compulsive use. In the words of one legislator during debate, “When profit is made at the cost of broken families and ruined futures, the State cannot remain a silent spectator.” This framing situates the Act as a moral intervention, positioning the State as protector of vulnerable citizens against predatory business models. The statute combines prohibition with regulatory institution-building. It establishes the National Online Gaming Commission, a new central regulator tasked with licensing, classification, and oversight of permitted gaming formats. The Commission is empowered to coordinate with state regulators but ultimately retains supervisory authority, creating a centralized model for a sector that had previously been regulated in a piecemeal fashion by different states. The Act also distinguishes permissible categories of gaming: non-monetary social games and e-sports. Social games, including subscription-based models, are subject to consumer protection requirements such as age verification, self-exclusion tools, and grievance redressal mechanisms. E-sports, formally recognized under the forthcoming National Sports Governance Act, are promoted as legitimate competitive and cultural activities, insulated from the stigma attached to money gaming. The punitive architecture of the Act is striking. Offences are classified as cognizable and non-bailable, enabling law enforcement to arrest without warrant and conduct searches without prior judicial approval. First-time violators face imprisonment of up to three years, fines of up to one crore rupees, or both. Repeat offenders may be fined up to two crores and subjected to mandatory imprisonment. The Act further prohibits any form of advertising or promotion of money games and directs financial intermediaries to suspend processing of related transactions. In addition, platforms must refund user wallet balances, a provision that imposes immediate financial obligations on companies exiting the market. The industry fallout was swift and severe. Leading platforms such as Dream11, Mobile Premier League, Zupee, and PokerBaazi suspended or shuttered their money-gaming formats within days of the law’s passage. Reports indicated that Dream11 alone suffered revenue losses of up to ninety-five percent. International investors expressed alarm, with several global firms scaling down operations. Analysts predicted job losses in the tens of thousands and a contraction in a sector previously valued at over two lakh crore rupees, with projections of significant growth by 2029. For entrepreneurs and employees, the legislation was not merely regulation but existential disruption. This disruption raises constitutional and federal questions. Historically, gambling and betting have been matters within the State List under Entry 33 of the Seventh Schedule of the Constitution. States like Tamil Nadu, Kerala, and Karnataka attempted to regulate or prohibit real-money games, though these laws often faltered under judicial review for violating the distinction between skill and chance. By legislating a nationwide ban, the Union government risks charges of legislative overreach, potentially upsetting the constitutional balance of powers between Centre and States. Moreover, by collapsing the skill-chance distinction, the Act invites scrutiny under Article 14 of the Constitution, which protects against arbitrary classification, and Article 19(1)(g), which safeguards the right to trade. For platforms that operated skill-based games under prior judicial sanction, the Act represents a sudden criminalization of previously lawful activity, raising serious questions of proportionality. The first legal challenge emerged almost immediately. A23, a major gaming operator, filed a writ petition in the Karnataka High Court arguing that the Act represents unconstitutional paternalism and unjustifiably criminalizes legitimate skill-based formats. The petition contends that the law infringes both the right to equality and the freedom to practice trade. The High Court scheduled its first hearing for August 30, ensuring that judicial scrutiny will soon test the durability of the statute. Similar petitions from other stakeholders are anticipated, and the matter is likely to escalate to the Supreme Court, where the tension between paternalistic regulation and constitutional freedoms will be tested. Public opinion remains polarized. Parents, educators, and advocacy groups largely welcome the Act, viewing it as a necessary corrective to an industry that had grown unchecked. Many cite cases of children spending family savings or borrowing money to participate in online fantasy leagues, leading to debt and distress. One parent quoted in national media described the law as “a lifeline for children lost to online addiction.” Industry bodies, however, decry the blanket nature of the prohibition, arguing that it conflates responsible skill-based gaming with predatory gambling and jeopardizes a sector that contributed significant tax revenue and employment. They emphasize the potential of regulated models to foster innovation while protecting consumers, urging the government to reconsider its approach. The Promotion and Regulation of Online Gaming Act, 2025, thus embodies a paradox. It reflects a commendable desire to shield citizens from exploitative practices but does so through an uncompromising ban that extinguishes an entire sector. By simultaneously promoting e-sports and social gaming, the law nods to the positive potential of digital entertainment, yet its blanket prohibition of money games risks stifling innovation, deterring investment, and inviting constitutional challenges. The future trajectory of the Act will depend not only on the courts but also on the regulatory capacity of the newly created Commission and the political will to refine the framework in response to judicial and industry feedback. In conclusion, the Act is both a bold assertion of state paternalism and a recognition of the need for structure in a rapidly growing industry. It illustrates the difficulty of balancing consumer protection with economic freedom in a digital age where innovation often outpaces regulation. Whether this legislation endures as a protective shield or is reshaped by judicial and legislative reconsideration will determine the contours of India’s online gaming sector for years to come.