The Promotion and Regulation of Online Gaming Bill 2025

The Promotion and Regulation of Online Gaming Bill 2025

Why in News? 

Recently, the Lok Sabha passed the Promotion and Regulation of Online Gaming Bill, 2025. The Bill addresses both the opportunities and challenges posed by digital gaming in India. It aims to promote e-sports, social gaming, and educational games, while curbing risks associated with gambling and addiction.

Key Provisions: The Promotion and Regulation of Online Gaming Bill, 2025

• Recognition of E-Sports: The Bill officially recognizes e-sports as a legitimate sport in India. It encourages the creation of training centers, research institutes, and professional events for gamers. State Governments and sports federations will coordinate to support tournaments and competitions. The Bill also proposes incentives for players and organizations, including funding for skill development and awareness programs. 

• Ban on Online Real-Money Games: The Bill enforces a total prohibition on online games that involve monetary stakes. No individual or company can offer games of skill or chance requiring entry fees or deposits. Financial institutions, including banks, cannot process payments for these types of games.

• Advertisement Restrictions: Advertisements for platforms offering real-money games are strictly banned under the Bill. Companies and marketers promoting such games may face legal consequences. It also ensures that gaming companies focus on skill and recreational games rather than monetary gains.

• Regulation: All online gaming companies must obtain licenses from a designated regulatory authority. The Bill mandates oversight to track the operations, compliance, and financial transactions of gaming firms. Companies failing to meet standards may have their licenses suspended or revoked.

• Consumer Protection: The Bill emphasizes player safety and fair play. Operators must maintain transparency in prize distribution, algorithms, and game rules. Fraudulent practices will be strictly penalized. Consumers will have access to clear information on game terms, winning chances, and refund policies. 

• Anti-Addiction Provisions: The Bill addresses concerns about gaming addiction. Gaming platforms must introduce controls like session limits, alerts for prolonged play, and self-exclusion features. These steps promote responsible gaming and prevent excessive play.

• Protection for Minors: Strict age verification processes are mandated under the Bill. Minors will be barred from participating in restricted games. Parents will receive tools to monitor their children’s gaming activities. 

• Anti-Money Laundering: The Bill requires regular auditing and transaction tracking to prevent money laundering through online games. Financial intermediaries will report suspicious activities. 

• Penalties: The Bill imposes stringent penalties for non-compliance. Game operators may face penalties of up to ₹1 crore and imprisonment for a maximum of three years. Promoters and advertisers may be fined up to ₹50 lakh and imprisoned for up to two years. Company executives, including directors and managers, are held personally responsible for breaches. 

Reasons for Introducing the Promotion and Regulation of Online Gaming Bill, 2025

• Protecting Players from Gambling: The first reason for the Bill is to prevent financial harm to players. India has witnessed a surge in real-money online gaming, with platforms like Dream11 and WinZO attracting millions of users. In 2024, reports indicated that over 20 million Indians participated in paid fantasy sports, with significant monetary stakes involved. Many players, especially youth, faced losses and financial stress. 

• Addressing Addiction: Another major reason is to tackle gaming addiction and its social impact. Studies in 2023 by the Indian Council of Medical Research (ICMR) highlighted that excessive online gaming affects mental health, causing stress, anxiety, and poor academic performance among students. Approximately 15% of regular online gamers reported addictive behavior in urban India. 

• Safeguarding Minors: The Bill was introduced to protect children and teenagers from harmful gaming practices. Research by the Ministry of Electronics and Information Technology (MeitY) in 2022 showed that nearly 30% of minors under 18 engaged in online games with monetary stakes, often without parental supervision. This exposure increases the risk of gambling, fraud, and inappropriate content. 

• Establishing Accountability: The Bill was introduced to create a legal framework for oversight and corporate responsibility. Online gaming companies previously operated with limited regulation, leading to disputes, unfair practices, and potential fraud. In 2023, SEBI noted that numerous fantasy gaming platforms operated without transparency in financial transactions and prize distributions.

• Encouraging E-Sports: The Bill is introduced to promote e-sports, educational, and social gaming as legitimate career and recreational avenues. India’s e-sports market has grown significantly, valued at approximately ₹3,700 crore in 2024, with professional tournaments attracting global attention. 

Impact of the Promotion and Regulation of Online Gaming Bill, 2025

• Economic and Investment: The Bill may affect foreign investment and revenue generation in the online gaming sector. Companies like Dream11, My11Circle, and WinZO had collectively attracted over ₹25,000 crore in foreign investment by 2024. The ban on real-money games may reduce startup growth and investor confidence. Government revenue from GST and taxes, approximately ₹20,000 crore annually from the sector, could see a decline if operations shift to offshore platforms.

• Employment and Job Market: The Bill influences employment in the online gaming sector. By 2024, the industry employed more than 200,000 professionals, including developers, designers, and marketers. Limiting real-money games could impact employment, particularly in sectors linked to fantasy sports and gambling platforms. However, the promotion of e-sports could create new career opportunities in tournaments, training, and digital content creation.

• Consumer Confidence: Mandatory age verification, anti-addiction features, and strict penalties for violations reduce fraud, gambling, and exposure to financial risk. Surveys in 2023 showed that 15–20% of regular online gamers faced losses due to unregulated platforms. By regulating the sector, the Bill enhances trust and transparency, giving players confidence to engage in e-sports and recreational gaming safely.

How Online Gaming is Regulated in India?

• Legal Provisions: State governments hold exclusive authority over gaming, betting, and gambling under Entry 34 of the State List in the Constitution. Laws vary across states, with some permitting skill-based games while banning gambling. The Public Gambling Act, 1867, exempts skill-based games from penalties, allowing platforms to operate legally in certain jurisdictions. The Prize Competitions Act, 1955 regulates contests and prize-based games, ensuring transparency and fairness. 

• Central Guidelines: The central government regulates online gaming through Information Technology and intermediary rules. The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 define online games, intermediaries, real-money games, and permissible games. The rules require platforms to implement age verification, anti-fraud measures, and consumer protection mechanisms. 

• Taxation: Online gaming is subject to central taxation and financial monitoring. The Central Goods and Services Tax (Amendment) Act, 2023 levies a 28% tax on the total entry amount of online games. Under the Income Tax Act, 1961, winnings above ₹10,000 from skill-based or lottery games are taxed at 30%, excluding surcharge and cess.