Gaming ban backlash grows but it unlocks credit health, jobs and spending

Opposition to the gaming ban is not without reason, but the gains are far greater

The press and social media are questioning the wisdom of the real money gaming ban. Argument No 1 being proffered is that a recent report from the Securities and Exchange Board of India (Sebi) found that 93 per cent of individual traders in the equity futures & options (F&O) segment incurred losses between financial year 2021-22 and 2023-24, with aggregate losses exceeding ₹1.8 trillion over the three years. Only 7.2 per cent of traders made a profit, and just 1 per cent of them earned more than ₹1 lakh in profit after accounting for costs. The study also noted that many traders, particularly young and new investors, continue to trade despite significant losses, highlighting the speculative nature and high risk of the F&O market.

 

On the other hand, nearly 450 million people lost “only” an estimated  ₹20,000 crore annually in the past few years due to real money gaming. This “extensive and widespread financial loss”, however, was a primary driver for the Indian Parliament's decision to pass the Promotion and Regulation of Online Gaming Bill, 2025, which bans all forms of real-money gaming to shield citizens from the menace of online money games. This legislation, according to the government, “is designed to curb addiction, financial ruin and social distress caused by predatory gaming platforms that thrived on misleading promises of quick wealth”. The new law reflects the government’s “resolve to safeguard families while guiding the digital economy towards safe and constructive growth”.

 

So, the question being repeatedly asked is why F&O trading — with three times the losses — should be allowed to flourish while real-money gaming is banned. The ban, industry pundits say, will further ignite and propel the illegal market, currently estimated at over $100 billion annually. It also poses significant risks to tax collections (GST revenues had apparently touched ₹25,000 crore) and threatens national security by incentivising deviants to exploit payment channels such as UPI mule accounts, hawala networks, and cryptocurrencies. Moreover, the ban on real-money gaming will likely drive players to offshore or dark web platforms, increasing the risk of fraud, malware, and addiction.

 

Argument No 2: Prohibition has failed, and failed miserably wherever enforced by law. Banning alcohol has only driven its consumption underground. Failure of effective implementation gives rise to bootlegging (the illegal production, transport and sale of liquor). Liquor mafias emerge, supplying illicit liquor (with no quality checks) to the masses. This defeats the very purpose of prohibition and gives rise to organised crime. By the same logic, banning real-money gaming will only strengthen gambling. All these objections may well be valid. And partially true. But the ban’s many direct benefits are not getting the publicity and public understanding they deserve:

 

l About ₹1.2-1.5 trillion is likely to get unlocked by the ban into the consumption economy, which has much higher multipliers compared to game playing. Coupled with the expected GST relief, this may, in fact, show up in a visible upswing in this year’s festival spends itself. 

 

l No one has talked about this so far but the ban will surely lead to cleaner credit for non-banking financial companies. About ₹30,000-₹50,000 crore annually was getting funnelled by players into real-money gaming via low-ticket payday advances, and other short-term loans. It was making the books of the lenders look quite unhealthy. The new law will surely help in this.

 

l But the biggest benefit of the ban is going to be the meaningful productivity unlock — nearly 100 million gamers were spending upwards of 8.5 hours per week on the real-money gaming menace.

 

Honestly, yes, the key is to ensure that a grey/black/overseas domiciled ecosystem does not emerge to replace what the government has outlawed. But it is highly unlikely that any offline or overseas grey ecosystem will ever reach even 10-20 per cent of the current size of the fantasy business.

 

Back to the prohibition argument. A study in Bihar found that 40 per cent of ever-married women aged between 15 and 49 reported that they experienced physical, sexual or emotional violence by their husbands. There has been a 28.9 per cent reduction in crimes against women in Bihar between 2016 and 2019, after prohibition. The reduction in alcohol consumption has also reduced crime significantly, and visibly. The Bihar study also noted a 66.6 per cent dip in cases of kidnapping for ransom, a 28.3 per cent decline in murder cases, and a 2.3 per cent fall in dacoity. So, bans do work. Minister Vaishnaw: More power to you. Take a well-deserved bow. 

The author  is chairman of Rediffusion