India bans real-money online games, moves to recognize esports as a sport

India’s Parliament has approved the Promotion and Regulation of Online Gaming Bill, 2025, imposing a nationwide ban on real-money online games while paving the way for esports to be formally recognized as a competitive sport. The legislation, which now awaits presidential assent, introduces some of the most restrictive measures the country’s digital gaming sector has faced.

The bill prohibits online games involving monetary stakes—whether based on chance or skill—and bans related advertising, promotions, and financial transactions. Banks and financial institutions will be barred from processing payments linked to such platforms. Individuals who continue to operate or promote real-money games could face up to three years in prison or fines as high as ₹10 million ($115,000). Celebrities endorsing these services may also be penalized with imprisonment or fines.

Federal IT Minister Ashwini Vaishnaw told lawmakers the ban was necessary to address “social evils,” citing financial harm and psychological distress linked to money-based gaming, including reported suicides tied to gambling losses.

The sudden move has sent shockwaves through India’s real-money gaming sector, which industry groups estimate to be worth ₹2 trillion (about $23 billion) and employing over 200,000 people. Startups such as Dream11, Mobile Premier League (MPL), WinZO, and Games24x7—backed by global investors including Tiger Global, Peak XV Partners, and Sequoia—face an uncertain future.

Companies argue that the ban unfairly targets regulated Indian operators while leaving space for illegal offshore betting platforms, which are often linked to greater financial harm. In a joint letter to Prime Minister Narendra Modi and Home Minister Amit Shah, industry bodies warned that the legislation could dismantle compliant domestic businesses while driving users toward unregulated operators.

Publicly listed Nazara Technologies, which has indirect exposure to real-money platforms, saw its shares fall sharply after the bill’s passage. Venture capital firms are also reassessing investments in the sector, raising concerns about India’s reputation as a predictable market for digital businesses.

Industry groups are preparing to contest the law in the Supreme Court, arguing it violates the constitutional right to conduct business under Article 19(1)(g). Policy experts also criticized the abruptness of the measure, noting that prior government efforts—such as self-regulation frameworks and a 28% gaming tax introduced in 2023—had already placed significant pressure on companies.

“This move undermines India’s image as a stable investment destination,” said Rohit Kumar, founding partner at public policy firm The Quantum Hub. “Concerns should have been addressed through consultation and clear regulatory frameworks rather than sudden prohibitions.”

Unlike money-based games, esports has been singled out for recognition and promotion. The government plans to coordinate with sports federations to support esports through incentives, infrastructure development, and awareness programs. However, betting on esports remains prohibited.

Industry leaders welcomed the distinction but called for clearer definitions to prevent regulatory ambiguity. “The absence of precise terminology has often blurred the lines between esports and online gaming,” said Akshat Rathee, co-founder of Nodwin Gaming. “Uniform standards are essential for growth and global competitiveness.”