India Approves Complete Ban on Online Real Money Gaming Platforms

The Union Cabinet has approved the comprehensive Online Gaming Bill, which imposes a complete ban on online games involving monetary stakes, citing concerns over addiction, financial losses, and suicides among users. The legislation, expected to be introduced in the Lok Sabha on Wednesday by Union Minister Ashwini Vaishnaw, represents one of the most decisive regulatory moves in India's gaming sector.

Complete Ban on Money Gaming Regardless of Skill Element

Unlike previous regulatory approaches that distinguished between games of skill and chance, the new legislation brings down a blanket ban on all online money gaming activities, irrespective of whether they are based on skill, chance, or both. The bill specifically targets the Rs 27,438 crore online real money gaming sector.

The government justified this comprehensive approach by noting that the industry had been "playing in the grey area" between skill and chance-based games. According to the Economic Times, one official stated, "If betting and gambling is not allowed in the physical world, how can it be permitted in the online space?"

Severe Penalties and Financial Institution Accountability

The Promotion and Regulation of Online Gaming Bill 2025, drafted by the Ministry of Electronics and Information Technology (MeitY), establishes stringent penalties across the ecosystem:

• Gaming operators: Up to 3 years imprisonment, fines up to Rs 1 crore, or both
• Banks and financial institutions: Same penalties for facilitating transactions for money games
• Advertisers and endorsers: Up to 2 years jail time, fines up to Rs 50 lakh, or both
• Celebrity endorsements: Complete prohibition on promoting betting-related gaming apps

The bill also introduces new blocking mechanisms that expand beyond the existing IT Act's Section 69A, giving authorities broader powers to restrict access to non-compliant platforms.

Exemptions for Esports and Traditional Video Games

The bill clearly defines and promotes two categories of permissible gaming:

Online Social Games: Games that don't involve staking money or participation with the expectation of winning monetary rewards, offered solely for entertainment, recreation, or skill development.

Esports: Organized competitive events between individuals or teams in multiplayer formats with predefined rules, recognized by national Olympic and Paralympic committees.

For these categories, the legislation encourages development of indigenous technologies, responsible game design, and emerging technologies like AI and AR/VR, positioning India as a potential global hub for creative digital gaming content.

The bill also proposes creating a national authority to regulate the gaming industry, addressing challenges in cross-border and inter-state operations that have existed in the current "regulatory grey zone." This move comes as the government argues that inconsistent judicial interpretations have created legal uncertainty and enforcement challenges.

Government's Vision for Gaming Sector

Despite the sweeping restrictions on money gaming, the government maintains strong support for the broader gaming ecosystem. Officials emphasized that "India could become the gaming capital of the world" through legitimate games without monetary components, with the bill actively promoting esports in line with global trends and supporting the animation, visual effects, gaming and comics (AVGC) sector.

The legislation represents a decisive separation between entertainment-focused gaming and wagering-based activities, with the government's clear intent to protect Indian consumers while fostering legitimate gaming innovation and competition.

With the bill now heading to Parliament, the focus will be on how India balances its ambition to become a global gaming hub with stringent safeguards against financial and social risks associated with money gaming.