Opinion Blanket ban on online money gaming is the wrong answer

With Parliament passing the Promotion and Regulation of Online Gaming Bill, 2025, the online gaming industry has been dealt a fell blow. The government’s rationale for imposing a complete ban on online money games, including both games of skill and chance, and also prohibiting advertising and promotion of such games, rests on a stated desire to address gaming addiction, mental health issues and financial losses. Union minister Ashwini Vaishnaw said in Parliament that, according to an estimate, 45 crore people are affected by such games, facing a loss of more than Rs 20,000 crore. Concerns have also been raised over some of these platforms being used for fraud and money laundering. While there can be no disagreement on the seriousness of these problems, and on the need to tackle them, it must be asked whether a ban is the best way out.

In an interconnected world, a ban would simply drive such activity to unregulated and/or offshore markets, which may be beyond the jurisdiction of Indian authorities. This will make it harder to address some of the concerns. India’s history is replete with examples of how bans, prohibitions and price controls have almost never achieved the stated objectives. The move will also have significant economic implications. As per a report from PwC titled “From sunrise to sunshine”, the real money gaming segment brought in Rs 16,500 crore in revenue during 2023, which was expected to reach Rs 26,500 crore by 2028, accounting for a significant share of the online gaming market in India. A complete ban will affect all companies involved in this segment — several online gaming platforms are said to have already suspended their operations following this development — and this will have implications for jobs, both directly and indirectly. The move will also impact government finances. After the GST Council’s decision to impose a 28 per cent tax on online gaming, revenues from the segment rose by 412 per cent in six months, reaching Rs 6,909 crore, up from Rs 1,349 crore before that. The ban, which also underlines the capricious nature of policy, is likely to make capital, both domestic and foreign, more circumspect — as per a report from EY, total investments from both domestic and foreign sources added up to Rs 22,931 crore between 2019-20 and December 2023.

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A more considered approach was called for. A Niti Aayog draft paper in 2020 had noted that stakeholders were in favour of a “light-touch regulatory framework for the fantasy sports industry”. A prudent approach would veer towards providing greater regulatory clarity, putting in place mechanisms to address the concerns of the government, ensuring adequate checks and balances in the system and establishing efficient grievance redressal mechanisms.