Centre may ban all forms of real money games, penalise influencers promoting them

The Bill has been drafted over national security concerns related to online gaming platforms, including the use of digital wallets and cryptocurrencies for money laundering and illicit fund transfers, these platforms serving as potential messaging and communication grounds for terror organisations, and offshore entities circumventing Indian tax and legal obligations, among others.

As per the current version of the draft law, the government will prohibit any person from offering online games in India, failing which they could be imprisoned for up to three years, and penalised Rs 1 crore. Those promoting such platforms, such as social media influencers, may also face jail time of two years, and a penalty of Rs 50 lakh. The government may also prohibit banks and financial institutions from facilitating financial transactions on such platforms.

The IT Ministry did not respond to a request for comment.

A change in approach

The Bill, in its current version, is a sharp departure from just about two years ago, when in April 2023, the IT Ministry had introduced rules for online gaming, which were largely seen as pro-industry. However, those rules proved difficult to implement due to potential conflict of issues, as the rules envisioned creating a self regulatory structure, which could have been influenced by the industry. As such, they remained stuck in limbo, even as national security and socio-economic concerns due to such platforms gained traction.

If the draft Bill is implemented in its current form, it will be a death blow to the online gaming industry in the country, which is projected to be a $9 billion market by 2029. The industry has also faced a 28 per cent Goods and Services Tax (GST), with proposals to increase the tax on these services to as high as 40 per cent, this paper had earlier reported.

According to a report by FICCI and EY from March 2025, online gaming companies in India collectively earned a revenue of close to $2.7 billion in 2024. These companies typically make money by taking a cut from a user’s winnings. As per the report, more than 155 million Indians engaged with real money gaming sub-segments such as fantasy sports, rummy, poker and other transaction-based games in 2024, marking a 10 per cent increase over 2023. On an average, around 110 million people played these games daily.

The Bill is also understood to have envisioned the creation of a central authority to promote competitive e-sports in the country, while ensuring overall compliance with the law. The Centre will also recognise, categorise and register “online social games” with the authority and facilitate the development and availability of online social games for recreational and educational purposes. Online social games may have an option to accept payment in the form of a subscription fee or access fee, as long as it is not in the form of a stake or wager.