Govt set to log out real-money games; Bill to be tabled on Wednesday

The draft bill, however, calls for promoting e-sports and online social games, according to a source

The government has finalised a draft legislation to ban all forms of online real-money gaming (RMG) in India and will introduce it in Parliament on Wednesday.  

 

The draft Bill, cleared by the Union Cabinet on Tuesday, is likely to bar “offering, aiding, abetting, inducing, or otherwise in the offering of any online money gaming service and declares it as an offence”, according to a person in the know.  

 

Aimed at curbing the sharp spike in online gaming addiction among children and youth that has triggered mental health issues and financial losses, the Bill also bans any person and advertisement from promoting online money games.

 

Furthermore, the draft Bill has also proposed that banks, financial institutions, or any other person should not facilitate any transactions related to online real-money games, the sources said.

 

According to the Lok Sabha’s updated list of business for Wednesday, the “Promotion and Regulation of Online Gaming Bill, 2025” is scheduled for introduction. The development has taken the industry by surprise, with several executives terming it a death knell for the online real gaming sector.

 

While cracking down on the RMG sector, the draft Bill calls for promoting e-sports and online social games, according to a source. “Either a new authority is likely to be created, or an existing authority will be designated as the nodal agency to regulate and look after the sector,” a source told Business Standard. 

 

Most gaming company executives Business Standard spoke to, said that they had not been consulted on any aspect of the Bill till date.

 

“The sector was not consulted on the draft of the Bill. It will clearly kill the entire industry that has been built over the past few years. The RMG sector may challenge it, but in the interim, companies will be in a limbo struggling to run operations and pay salaries,” an executive at a leading gaming company said. 

 

“Offshore companies continue to proliferate, and they have not been banned yet. Home-grown entities have ensured compliance with norms, including GST payments and reporting standards. The Bill will wipe out the sector while users will move to offshore gambling sites and any tax revenue will be lost,” a second person added, requesting anonymity.

 

The gaming sector currently pays a 28 per cent GST rate imposed in October 2023, and has contested the levy of the tax as well as its retrospective applicability in the Supreme Court.  

 

Industry executives averred that the Centre’s stance suggests discomfort with games involving cash winnings from tournaments.

 

“We feel that there is encouragement towards e-sports, which involves in-app purchases and ad revenue, but no monetary rewards or wagering. But, that is about 15 per cent of the market size, with RMG dominating the rest,” one of the people quoted above noted.

 

In the past, the RMG sector had sought a centralised regulatory framework amid varying regulations across Indian states. Currently, states such as Tamil Nadu, Karnataka, Chhattisgarh, and Maharashtra, among others, are at various stages of implementing state regulations for the industry.

 

Industry bodies had argued that this patchwork of policies is hurting business and consumers alike, and had called on the Centre to establish nationwide standards for compliance, advertising, KYC norms, and domestic operator whitelisting, among other measures.

 

However, with the real-money gaming sector now facing an existential crisis, companies are hoping for some relief, including better clarity on the future of operations and taxation.

 

A more nuanced approach should have been taken to regulate the online real money gaming industry with the objective of protecting national interests, another industry executive said.

 

“This ban risks killing innovation, losing revenue, destroying jobs, and handing the space over to illegal operators — just when India had the chance to lead the world in this sunrise industry, which employs over 250,000 people directly and indirectly, and contributes over Rs. 20,000 crore annually in GST revenues,” the executive said.

 

(With inputs from Archis Mohan)