1. Ban on Online gaming: The rationale for the ban is the “serious social, financial, psychological and public health harms, particularly among young individuals and economically disaddrevantaged groups” of online money gaming.
These games “use manipulative design features, addictive algorithms, bots and undisclosed agents, undermining fairness, transparency and user protection, while promoting compulsive behaviour leading to financial ruin,” the Act says.
2. Curb on financial fraud and money laundering: The “unchecked expansion” of these games is “linked to unlawful activities including financial fraud, money-laundering, tax evasion, and in some cases, the financing of terrorism, thereby posing threats to national security, public order and the integrity of the State”.
3. Definition of online games: An “online money game” has been defined as a service played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports. This is an expansive definition, and it covers all major gaming platforms like Dream11, Winzo, MPL etc.
4. Recognising esports as sports: Esports is defined in the Act as a multi-player gaming competition governed by pre-defined rules and whose outcome relies solely on factors such as physical dexterity, mental agility, strategic thinking, etc. It permits entry fees and prize money for winning players as long as they do not involve bets, wagers, or any other stakes.
The Centre further looks to promote esports as a legitimate competitive sport by setting up training academies and research centres, launching incentive schemes, awareness campaigns, and collaborating with state governments as well as sporting federations.
5. Creation of a central authority: The Act provides for the creation of a central authority to promote competitive e-sports, while ensuring overall compliance with the law. The Centre will recognise, categorise and register “online social games” with the authority and facilitate the development and availability of such games for recreational and educational purposes.
The authority will also decide whether an online game qualifies as an online money game, effectively determining if it should be banned or not.
6. Power to the authorised authority: The act allows for authorised officials to carry out search operations at physical and virtual places, even without a warrant. “Any place” includes any premises, building, vehicle, computer resource, virtual digital space, electronic records or electronic storage devices and the authorised officer can gain access to such computer resources by overriding any access control or security code.
7. Penalties for violating the law: Offering an online money gaming service can lead to imprisonment up to three years and a fine up to Rs 1 crore. For repeat offences, the jail term can extend to five years, and the fine to Rs 2 crore.
→ Advertising or promoting such games, including by social media influencers and celebrities, can result in a two-year jail term and a fine of Rs 50 lakh.
→ Repeat offenders could face up to three years in prison and a fine of up to Rs 1 crore.
→ Banks and other financial entities are prohibited from facilitating any transactions for online money gaming services. Contravention can lead to a three-year jail term and a fine of up to Rs 1 crore.
BEYOND THE NUGGET: Court on distinction between games of skill and chance
1. Courts have emphasised the difference between the two kinds of games on a number of occasions.
2. They have held that games of skill are a legitimate form of trade and business, which are protected by Article 19(1)(g) of the Constitution. This provision guarantees the right to practise any profession, or to carry on any occupation, trade, or business.
3. In 2021, the Supreme Court upheld the dismissal of a public interest litigation demanding a ban on the fantasy cricket app Dream11 by the Rajasthan High Court. The top court referred to judgments by the Bombay and Punjab and Haryana High Courts that held fantasy sports to be games of skill.
4. According to both these High Courts, success in fantasy sports was not contingent on a particular team winning or losing any one match – rather, it was based on the participants’ knowledge, attention, and judgment of the performance of all athletes playing the sport.
Post Read Question
Consider the following statements about the Online Gaming Act, 2025:
1. It imposes a blanket prohibition on all online games involving money.
2. The act allows for authorised officials to carry out search operations at physical and virtual places, even without a warrant.
3. Banks and other financial entities are allowed to facilitate transactions on online gaming services to keep a check on the use.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
(Sources: Ban on real money games, penalties for endorsements, warrantless searches: What India’s gaming Bill says, Why has the government banned online money games, and what could be the economic impact of the new law?, Online Gaming Act: Despite carve-out, esports industry flags challenges ahead)
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Offering an online money gaming service can lead to imprisonment up to three years and a fine up to Rs 1 crore. (File photo) 
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