India Plans Total Ban on Real-Money Gaming Legislation

The Indian government is preparing to introduce a sweeping prohibition on real-money gaming operations. According to a draft of the “Promotion and Regulation of Online Gaming Act, 2025,” the proposed legislation seeks to outlaw games involving financial stakes, regardless of whether they are classified as games of skill or chance.

The draft, verified by sources including an IT ministry consultant and industry insiders, targets the core infrastructure of the gaming sector. It mandates that banks and financial institutions must cease facilitating any transactions or fund authorizations related to real-money gaming services. Furthermore, the bill aims to criminalize both the advertisements of these platforms and the financial activities supporting them.

The potential impact on the industry is severe, as real-money titles serve as the primary revenue engine for Indian gaming startups. Data from the venture capital firm Lumikai indicates that the sector generated $3.8 billion in the 2023–24 financial year, with real-money gaming alone contributing $2.4 billion of that figure.

Proposed Penalties and Regulatory Oversight

If enacted, the legislation introduces significant legal risks for stakeholders:

• Operators: Companies face potential imprisonment for up to three years and fines reaching ₹10 million (approximately $115,000).
• Promoters: Celebrities or public figures endorsing these games could face up to two years in prison or a fine of ₹5 million (about $57,000).
• Regulatory Authority: The bill empowers the government to establish a specific body to oversee enforcement and compliance.

Industry Concerns and Previous Regulatory Efforts

The gaming industry is already under pressure from a 28% tax imposed in 2023, which firms have challenged in the Supreme Court. Some reports suggest that taxes could eventually rise to 40% under further regulatory changes. Anonymous founders and investors have expressed deep concern, noting that for many startups, real-money gaming accounts for more than 85% of their total revenue.

“All unicorns in this sector are going to be significantly impacted due to the move if it comes true,” one investor remarked. Startups, including major players like Dream Sports, Games24x7, and WinZO, have struggled to find viable business alternatives, as nearly all their revenue is currently derived from the domestic Indian market.

The government’s shift toward a total ban follows increasing public alarm over reports of financial distress and suicides linked to online gaming addiction. While industry leaders argue that offshore betting and gambling apps are the primary source of these harms—and have continued to operate despite government efforts to block websites and freeze accounts—the new legislation appears to adopt a blanket approach to the entire sector.

This initiative follows a failed attempt in 2023 to implement a self-regulatory model under the Information Technology Rules. That framework, intended to distinguish between legitimate games and illegal gambling, collapsed due to internal disagreements over enforcement standards. The Indian IT ministry has not provided a formal comment on the latest draft.