The New Gaming Act of India : Promotion and Regulation of Online Gaming Act, 2025

If you are into online money games like Poker Baazi or Dream11, here is news for you, the Central Government (Government) has recently passed a bill, called the Promotion and Regulation of Online Gaming Act, 2025 (the Act), in August, 2025. This Act not only aims to prohibit and penalise online money games, but also supports skill-based games (like e-sports or social and educational online games) for the growth of the online gaming industry.

Why did we need the Act ?

With the rise in technology, today online gaming has become a primary pastime for India’s youth. This growth has boosted the economy and created jobs, making India a significant player in the global gaming market.

However, the online gaming industry’s rapid growth has also exposed it to serious social and medical risks, including gambling addiction, financial losses and family distress. In Karnataka, for example, 32 suicides were linked to gaming addiction over a 31 month period. As per Mr. Ashwin Vaishnaw, the Union Minister for Electronics and Information Technology, “an estimate of 45 crore people have been affected and middle-class families have already lost savings worth nearly Rs 20,000 crore because of online money gaming”. Apart from these risks, some games have even become hubs for money laundering, tax evasion, and even terrorism financing.

It is not that we didn’t have any regulations. However, most of these regulations only authorises and register games, and prevent illegal or unauthorised games (betting or wagering) that may cause harm to people. And thus the online sector of the gaming industry remains largely unregulated by a recognised central authority.

What does the Act bring in?

The Act (under Section 1), aims to cover all of India and applies to online money gaming services offered or accessed from anywhere, whether within the country or from abroad.

Defined terms and categories of games: The Act (under Section 2) aims to categorise the online gaming industry into three segments, which includes:

Online money game –Any online game (based on skill, chance, or both) where users pay or stake money or equivalents for a chance to win monetary or valuable rewards.
E-sports – An online registered game recognized as a sport (by the National Sports Governance Act, 2025), played competitively with fixed rules, where outcomes depend solely on player skill. Entry fees and prizes won’t make it a money game, unless it involves betting.
Online social game -An online game solely for entertainment, recreation, or skill development. Such games do not count as online money games, even if players pay a subscription or one-time access fee.

The Act also covers non-monetary stakes, by defining other stakes as anything equivalent to or convertible into money (like credits, coins, tokens, or virtual objects) obtained by paying money or in connection with an online game.

Promotion of Online Games: To promote games like e-sports, the Act (under Section 3) empowers the Government to set standards, establish organisations for training and research, and promote through campaigns and policies, for e-sports. The Government (under Section 4) is also empowered to develop online social games for recreation and education, support age-appropriate content and digital literacy, and work with states and educational bodies to promote safe gaming.

Prohibition on providing, advertising, and financing any online money game’s: The Act imposes a strict ban, punishment and penalties on online money games and services from every format, including:

Providing or supporting such games (under Section 5), with a punishment (under Section 9) of 3 years imprisonment or a fine of ₹1 crore, or both. And repeat offenders, may face up to 3–5 years imprisonment plus a fine of ₹1–2 crore.
Advertising such games (under Section 6) with imprisonment (under Section 9) of 2 years or a fine of ₹50 lakhs, or both. And repeat offenders may face up to 2–3 years imprisonment plus higher fines.
Financing or authorising any transactions linked to such games (under Section 7) with imprisonment (under Section 9) of 3 years imprisonment or a fine of ₹1 crore, or both. And repeat offenders, may face up to 3–5 years imprisonment plus a fine of ₹1–2 crore.

Such offences under this Act are to be treated as cognizable and non-bailable. Moreover, in case companies come under the ambit of such offences, then (under Section 11) those who are actually responsible, will be held liable unless they prove due diligence or lack of knowledge. Independent directors are exempt if not involved.

Establishing a Regulatory Authority : The Act also empowers the Government to establish a regulatory authority having the power to register and categorise games, issue guidelines, decide which games are prohibited, and handle user complaints. Any violation of such Authority’s directions (under Section 12) can lead to a fine of up to ₹10 lakhs, suspension or cancellation of registration, or a ban on offering games, but only after giving the accused a chance to be heard. And if the directions are set by the Government – regarding online money gaming services, then (under Section 13) every person needs to follow it as well.

In addition to this, any violation of the provisions of the Act (including Section 5,6 and 7) can lead to blocking of the access to online money gaming content.

Enforcement Powers: For enforcement, (under Section 15) the Government is also empowered to appoint officers to investigate offences under the Act. These officers have the power (under Section 16) to search premises, seize evidence, and arrest offenders without a warrant, whom they must promptly present before a magistrate or police officer, as per the Bharatiya Nagrik Suraksha Sanhita, 2023 (BNSS 2023).

Powers and Obligations of the Government: The Act, along with empowering the Government to make rules (under Section 19) and implement the provisions of the Act (under Section 17), also protects the Government from liability for its actions, if taken in good faith. However, the Government must present all rules before Parliament, and it must adopt any modifications that Parliament suggests. The Government may issue special orders within 2 years of the Act’s commencement to resolve any difficulties in its application, as long as these orders do not contradict the Act.

Overiding Effect: While the Act operates alongside other laws, in case of any inconsistency, it will have an overriding effect (under Section 18).

Conclusion

Though not yet enforced, the Act undoubtedly introduces significant and landmark regulatory changes to India’s gaming sector, affecting millions of people and substantial financial interests. It is only in the coming years, with the enforcement of the Act, we will truly understand the real change brought by this legislation.