Online Gaming and Its Regulation in India

With cheap data and smartphones, online gaming exploded in India. Millions played casual games, e-sports and real-money games, such as fantasy sports, rummy and poker, where players deposit money hoping to win more.

The boom

Real-money gaming companies attracted large investments, sponsored cricket teams and advertised heavily. The industry claimed hundreds of millions of users.

Concerns

• Financial losses: many players, including young people, lost significant sums.
• Addiction: frequent, fast play with money at stake can become compulsive.
• Skill versus chance: companies argued their games required skill, which courts had often accepted, but critics said outcomes involved large elements of chance.
• Fraud and money laundering risks.
• Suicides linked to gaming debts were reported in several states.

Tax changes

From October 2023, India imposed 28 percent GST on the full value of deposits in online real-money games, rather than just the platform fees. This sharply raised costs for the industry.

The 2025 law

In August 2025, Parliament passed the Promotion and Regulation of Online Gaming Act, 2025. It:

• Banned online money games, whether based on skill or chance.
• Banned advertising and financial transactions related to such games.
• Set out to promote e-sports and online social games without money stakes.

Major real-money gaming companies shut down or changed their business models, and the industry challenged the law in court.

The economics debate

• Supporters argued the ban protects vulnerable people from losses and addiction.
• Critics argued it would destroy jobs and investment, push players to illegal offshore sites, and that regulation, such as spending limits and age checks, would have been better.