Online Gaming Bill 2025 explained: What’s allowed, what’s banned, and who faces penalties

The Rajya Sabha on Thursday passed the Promotion and Regulation of Online Gaming Bill, 2025, paving the way for ban on online money games while promoting eSports and online social gaming.

The bill was passed by the Lok Sabha a day earlier.

What is the Bill about?

The bill proposes the establishment of an authority to regulate the sector, categorise different types of games, and ensure compliance.

It distinguishes between e-sports, online social or educational games, and online money games.

While the first two categories will be recognised and promoted, online money games will be banned outright.

What's banned, what's allowed

The Promotion and Regulation of Online Gaming Bill, 2025, defines online money game as an “online game, irrespective of whether such a game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning, which entails monetary and other enrichment in return for money or other stakes.”

“No person shall offer, aid, abet, induce or otherwise engage in the offering of online money game and online money gaming service,” the Bill states.

It also prohibits advertisements promoting such games and bars banks and financial institutions from processing or authorising related transactions.

Platforms like Dream11, My11Circle, MPL, Winzo, GamesKraft, KheloFantasy, Pokerbaazi, and Rummy are likely to be impacted.

The bill, however, does not criminalise anyone playing online money games, to avoid any harassment.

The idea is to treat them as victims, rather than perpetrators of crime, reported PTI, citing a person familiar with the matter.

Who faces penalties

The draft law prescribes stringent penalties for violations. Any person offering money gaming services will face imprisonment of up to three years or fines extending to ₹1 crore, or both.

Advertising such platforms could attract up to two years’ imprisonment and fines of up to ₹50 lakh. Those enabling financial transactions may face up to three years in jail and fines of ₹1 crore. Repeat offences invite harsher punishment, with jail terms of three to five years and fines ranging from ₹1 crore to ₹2 crore.

The bill also provides for blocking of online money gaming services under the Information Technology Act.

The government will take steps to formally recognise e-sports as a legitimate form of competitive sport in India. It may frame guidelines for organising tournaments, set up training academies and research centres, and coordinate with states and sporting federations.

Social and educational games will also be encouraged through awareness campaigns, safe content mechanisms and integration with educational and recreational institutions.

The financial memorandum attached to the Bill estimates an initial expenditure of ₹50 crore and recurring annual costs of ₹20 crore to run the proposed regulatory authority.

Rationale behind the Bill

Ashwini Vaishnaw, in the statement of objects and reasons, said that the proliferation of online money games has led to financial ruin, mental health concerns and links to unlawful activities such as money laundering and tax evasion.

"A significant number of young persons and economically vulnerable individuals have been adversely impacted by the seamless availability of these games, driven by the low cost of internet access, the ubiquity of mobile and computing devices, and the ease of app-based participation," Vaishnaw said.

"This problem is further exacerbated by aggressive promotional campaigns, including the use of celebrity endorsements, which enhance the appeal and reach of such platforms," he added.

The Bill, it notes, seeks to safeguard users and ensure a structured, innovation-friendly digital environment by clearly differentiating between permissible and prohibited forms of gaming.

Gaming bodies urge intervention

Industry bodies representing India's online skill-gaming sector have written to Union Home Minister Amit Shah, seeking his "urgent intervention" against the Bill.

In a joint letter, the federations warned that such a blanket prohibition would be a "death knell" for the industry, destroying jobs and pushing crores of users towards illegal offshore betting and gambling platforms.

The letter stated that the online skill gaming industry is a "sunrise sector" with an enterprise valuation of over ₹2 lakh crore and annual revenue exceeding ₹31,000 crore. It contributes over ₹20,000 crore in direct and indirect taxes annually and is projected to grow at a 20% compound annual growth rate (CAGR), doubling by 2028.

Responding to the industry concerns, Vaishnaw said the government would launch programmes to spur growth and create new opportunities in the broader gaming industry.

"Two of the three segments, e-sports and online social gaming, will be promoted and encouraged. And we will be creating programs which help the growth of the gaming industry, per se. And the people who are employed in the gaming industry will find new opportunities. Online money gaming...there is a demonstrated significant negative impact on society," he said.