AN OVERVIEW OF THE PROMOTION AND REGULATION OF ONLINE GAMING BILL, 2025: HIGHLIGHTS AND POTENTIAL DISADVANTAGES

Introduction

The Promotion and Regulation of Online Gaming Bill, 2025 (“Online Gaming Bill, 2025”) is a comprehensive and forward-looking framework to regulate and promote India’s expanding online gaming sector. The Online Gaming Bill, 2025 was introduced in the Lok Sabha on 20^th August 2025, where it was passed on the same day.

The Online Gaming Bill, 2025 promotes e-sports, educational, casual, and social games as part of India’s innovation-driven digital economy, acknowledging their potential for employment generation, technological advancement, cognitive development, and global competitiveness. Furthermore, it also addresses the harms associated with money games—addiction, financial distress, manipulative algorithms, and aggressive marketing—while also tackling risks of fraud, money laundering, tax evasion, and offshore operations that undermine enforcement. By categorising different forms of online games and tailoring regulation accordingly, it seeks to balance innovation and growth with consumer protection, public health, financial integrity, and national security.

Upon enactment, the Online Gaming Bill, 2025 is expected to foster a structured, secure, and innovation-friendly digital environment that safeguards individuals, families, and society at large while enabling India to take a leadership role in the global online gaming value chain.

Highlights of the Online Gaming Bill 2025:

• Categorization of Online games under the Online Gaming Bill, 2025

The Online Gaming Bill, 2025 classifies online games into 3 (three) main categories.

Under Section 2(c) E-sports are defined as competitive online games played in organised events, recognised under the National Sports Governance Act, 2025, where outcomes depend on players’ skill, strategy, or agility, and may include participation fees or prize money but do not involve betting or wagering.

Under Section 2(g) Online money games are defined as games in which users pay fees, money, or stakes with the expectation of winning monetary or other rewards; e-sports are explicitly excluded from this category.

Under Section 2(i) Online social games are defined as games offered for entertainment, recreation, or skill development, may involve subscription or access fees, but do not include betting or financial stakes and are distinct from e-sports and online money games.

• Recognition and Promotion of E-Sports & Online Social Games

The Central Government (“CG”) is empowered to recognise and register e-sports as a legitimate competitive sport, promoting their growth through guidelines, training academies, research centres, incentives, and coordination with States and federations.

Furthermore, the CG will also recognise and regulate online social games for recreational and educational purposes by establishing registration mechanisms, supporting safe development platforms, promoting age-appropriate content, and collaborating with educational and recreational institutions.

• Prohibition of Online Money Games and Related Services

The Online Gaming Bill, 2025 strictly prohibits any person from offering, aiding, abetting, inducing, or engaging in the offering of online money games and online money gaming services. Furthermore, making or facilitating advertisements that directly or in a roundabout way promote or induce participation in online money gaming is prohibited across all media, including electronic communication.

Financial institutions, banks, or any other bodies involved in assisting financial transactions or authorisation of finances are also prohibited from permitting or aiding any transactions related to online money gaming services.

• Establishment and Functions of the Online Gaming Authority

The Online Gaming Bill, 2025 empowers the CG to constitute, by notification, an Authority comprising a Chairperson and such number of Members as it deems fit, or to designate any existing Authority or agency to perform the functions under the Online Gaming Bill, 2025 (“Authority”). The Authority may determine, either upon application or suo motu, whether a particular online game qualifies as an online money game, and may also recognise, categorise, and register online games as prescribed. Every person offering or facilitating an online game is required to comply with the directions, orders, guidelines, or codes of practice issued by the CG or the Authority.

The CG is authorised to prescribe provisions relating to the composition, qualifications, tenure, salary, and disqualifications of Members, as well as the procedures of the Authority, powers of the Chairperson, appointment of officers and employees, and mechanisms for handling complaints and grievances. The Authority or designated agency may also respond to complaints concerning online games prejudicial to the interests of users, whether received in writing or electronically.

If the Online Gaming Bill, 2025 is enacted it is estimated that the setting up of an Authority could cost around INR 50,00,00,000/- (Rupees Fifty Crore only) initially, with about INR 20,00,00,000/- (Rupees Twenty Crore only) needed each year for ongoing expenses from the Consolidated Fund of India.

• Penalties under the Online Gaming Bill, 2025

The Online Gaming Bill, 2025 prescribes stringent penalties to deter violations. Under Section 9 if the Online Gaming Bill, 2025, offers online money gaming services can lead to imprisonment for up to 3 (three) years or a fine which may extend to INR 1,00,00,000/- (Rupees One Crore only), or both, whereas promoting such games through advertisements can lead to 2 (two) years’ imprisonment or a fine of which may extend to INR 50,00,000/- (Rupees Fifty Lakh only). Financial transactions related to money gaming are punishable with 3 (three) years imprisonment or a fine which may extend to INR 1,00,00,000/- (Rupees One Crore only). Repeat offenders face harsher consequences, including mandatory minimum imprisonment of three to five years and fine ranging from INR 1,00,00,000/- (Rupees One Crore only) to INR 2,00,00,000/- (Rupees Two Crore only). Advertisers convicted repeatedly face 2 (two) to 3 (three) years imprisonment and fines between INR 50,00,000/- (Rupees Fifty Lakh only and INR 1,00,00,000/- (Rupees One Crore only).

Offences under Sections 5 and 7 of the Online Gaming Bill, 2025 are declared cognizable and non-bailable under Section 10.

Corporate liability is addressed in Section 11, making directors, managers, or officers responsible if offences occur with their consent, connivance, or neglect, though independent and non-executive directors are protected.

Finally, Section 12 empowers the Government or Authority to impose penalties up to INR 10,00,000/- (Rupees Ten Lakh only), suspend or cancel registrations, and prohibit defaulting entities from offering or promoting games, subject to due hearing.

• Enforcement Powers in the Online Gaming Bill, 2025

The Online Gaming Bill, 2025 vests strong enforcement powers in the CG and authorised officers to curb online money gaming. Any information or content relating to prohibited money gaming services may be blocked for public access under the provisions of the IT Act, 2000. The CG is empowered to authorise officers of the Centre, State, or the proposed Authority to investigate offences under section 15 of the Online Gaming Bill, 2025. Powers of search, seizure, and arrest without warrant, covering both physical and digital spaces such as premises, vehicles, computer resources, or virtual platforms are given under Section 16.

• Online Gaming Bill, 2025 overrides other inconsistent laws

The provisions of this Online Gaming Bill, 2025 are intended to supplement, not replace, any existing laws. If any conflict or inconsistency exists between this Online Gaming Bill, 2025 and any other law currently in force, the provisions of this Online Gaming Bill, 2025 will take precedence to the extent of the inconsistency, ensuring that its rules and regulations have overriding authority.

• CG’s Rule-Making Authority

The CG has the authority to make rules to implement the provisions of this Online Gaming Bill, 2025. Once made, every rule must be presented before both Houses of Parliament for a total of thirty days, either in one session or over successive sessions. Parliament has the power to modify or annul the rule during this period, but any such changes will not affect actions already taken under the original rule.

Potential disadvantages

• Potential Conflict with Judicial Precedents          

The prohibition under Online Gaming Bill, 2025 on the online money games “irrespective of whether such game is based on skill, chance, or both” could conflict with established judicial precedents. Historically, courts have treated games of skill differently from games of chance. For instance, the case of Varun Gumber v. Union Territory of Chandigarh & Ors. (CWP No. 7559 of 2017), which was upheld by the Supreme Court, ruled that online fantasy sports are games of skill. The court established that the participant’s knowledge, judgment, and discretion are the predominant factors in forming teams, making the game a matter of skill rather than chance. This ruling protects such games under Article 19(1)(g) of the Constitution, which guarantees the right to practice any trade, profession, or business.

Another relevant case, Manoranjithan Manamyil Mandram v. State of Tamil Nadu (AIR 2005 MADRAS 261), held that determining if a game is one of skill or chance is a “question of fact” to be decided on a case-by-case basis. The Madras High Court stated that even if a game has elements of chance, it will not be considered gambling if skill is the predominant factor influencing the outcome. The blanket prohibition on online money games, regardless of the skill element, could therefore lead to significant legal challenges.

• Regulatory Uncertainty and Overreach

The Online Gaming Bill, 2025 aims to establish a new legal framework for the online gaming sector, but it gives the CG the authority to create rules to implement the provisions. This delegation of legislative power to the CG and the new Authority could create regulatory uncertainty for businesses and investors.

The Online Gaming Bill, 2025 grants broad powers to authorized officers to search and arrest without a warrant. An authorized officer may enter any “place,” which includes premises, vehicles, and digital spaces like computer resources or virtual digital spaces, to search and arrest anyone reasonably suspected of committing, or about to commit, any offense under the Online Gaming Bill, 2025. If a security code is not available, the officer can override it to gain access to a computer resource or electronic device. This extensive power could be seen as an overreach and may raise concerns about privacy and civil liberties

• Potential Threat to Foreign Investment and Industry Growth

The Online Gaming Bill, 2025 aims to promote a “secure, structured and innovation-friendly digital environment”. However, the broad definition of “online money game” could pose a threat to foreign investment. The Online Gaming Bill, 2025 defines it as any online game played for money with the expectation of monetary gain, irrespective of whether it’s based on skill or chance. This ambiguity could deter international gaming companies, who might fear that their business models could be classified as “online money games”, thereby hindering the sector’s growth and India’s potential to become a global leader in the online gaming value chain.

Conclusion

The Promotion and Regulation of Online Gaming Bill, 2025, marks a decisive step by the Indian legislature to reconcile the dual objectives of fostering innovation in the online gaming sector and mitigating the social, financial, and legal risks posed by money gaming.
By granting formal recognition to e-sports and online social games, the Bill seeks to unlock opportunities for employment generation, technological advancement, and global competitiveness, while ensuring safeguards against addiction, fraud, and financial exploitation. Nevertheless, the blanket prohibition on online money games—irrespective of their skill component—raises serious concerns of constitutional validity and its consistency with established judicial precedents. Equally, the broad enforcement powers conferred on authorities may invite criticism for potential overreach, privacy violations, and regulatory uncertainty. If left unaddressed, such ambiguities could undermine investor confidence and stifle the sector’s growth.
Thus, while the bill represents a progressive attempt to create a structured, secure, and innovation-friendly framework, its success will ultimately hinge on striking a balance between consumer protection and constitutional freedoms, regulatory clarity, and promoting India’s long-term leadership in the global gaming value chain.