Knock out for real money games in India? Is the game over for real-money games in India?

India is tightening the noose around the real-money online gaming industry with a new legislation.

On Wednesday, India's Electronics and Information Technology Minister Ashwini Vaishnaw tabled 'The Promotion and Regulation of Online Gaming Bill, 2025' in the Lok Sabha. The bill, however, needs to get cleared by the upper house to become a law.

As it implies, the bill aims to promote and regulate the online gaming sector including e-sports, educational games and social gaming in India. It also envisages the appointment of an "authority" for coordinated policy support, strategic development and regulatory oversight of the sector, among other things.

Interestingly, the bill makes a clear distinction between usual games and real-money games.

According to the bill, online money game "means an online game, irrespective of whether such game is based on skill, chance, or both, 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…"

The government is going tougher on such online gaming firms as the bill says, "No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service."

"No person shall make, cause to be made, aid, abet, induce, or otherwise be involved in the making or causing to be made any advertisement, in any media including electronic means of communication, which directly or indirectly promotes or induces any person to play any online money game or indulge in any activity promoting online money gaming."

It even proposes that "no bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce or otherwise facilitate any transaction or authorisation of funds towards payment for any online money gaming service."

Moreover, there are stringent penalties, including jail terms, on violating these guidelines.

Temptation with risks

Real money gaming firms have been under scrutiny in India for a very long time mainly due to the societal impact such as addiction and financial losses.

The temptation is to make a quick and large amount of money with bare minimum of investments. For instance, you can create your playing XI for a cricket match, and if your players do well in the game, and you rank at the top in a select category, you can get millions of rupees.

This proposition has drawn millions of users to these gaming platforms. One of the top gaming firms Dream 11 (operated by Dream Sports) has more than 220 million subscribers, according to Statista. Similarly, WinZo claims to have more than 200 million users. Games24x7, which runs popular games like RummyCircle and My11Circle, has over 100 million players, according to Databricks.

These real-money games are also extensively advertised during important cricket tournaments. They have also roped in celebrities and former cricketers to endorse these platforms. Recently, Ranbir Kapoor and Aamir Khan featured in a slew of Dream 11 advertisements.

Obviously, a number of people are drawn towards these gaming platforms despite knowing it could be highly addictive and comes with a lot of financial risks.

There are plenty of news reports that highlight everyday people getting hooked on these games and losing a lot of money or falling into debt. Just recently, a teenager in Madhya Pradesh died by suicide after losing Rs 35,000 in an online game.

A man from Maharashtra killed his wife and his two-year-old child citing stress from the heavy financial losses he incurred in online gaming. Last year, a Hyderabad BTech student died by suicide after losing money. There are many more such reports of people suffering from these platforms.

"The Promotion and Regulation of Online Gaming Bill, 2025 is a welcome step toward resolving years of uncertainty in the sector. At present, a mix of state-level restrictions creates inconsistency. This bill helps bring a balance to that. With a central framework in place, we can unlock investment, foster innovation, and drive global competitiveness," Rohit N Jagasia, cofounder & CEO, Revenant Esports, said in a statement.

"The bill also recognises the crucial difference between esports, social gaming, and chance-driven money games. For esports in particular, that clarity is essential for growth and credibility. Once the detailed provisions are made public, we'll have a clearer sense of its implications for esports. But it could well mark the start of India's rise as an international esports leader," he added.

Parth Chadha, CEO & cofounder at STAN, also welcomed the move.

"For India's gaming industry, the government's decision to separate social gaming and competitive esports from real money gaming and to support them with specialised authority and skill building initiatives is historic. This has been our true belief at STAN since Day 1. The true potential in our opinion is found in the competitive esports ecosystem and social gaming communities where studios, creators and players co-exist," he said.

Chadha also said: "That said, it's also a tough day for our friends in the RMG industry. Many have built incredible businesses against the odds, created jobs, and brought gaming to millions. Their contributions shouldn't be overlooked even as the industry transitions."

Too large to shut down?

Back in 2023, the government put real-money games in the highest tax slab of 28%. The move did hurt the industry causing several to shut down or resort to layoffs.

Then, Peak XV-funded Mobile Premier League (MPL) laid off 350 employees, and online poker gaming platform Spartan Poker sacked 125 employees. Kavin Bharati Mittal-led Hike Rush Gaming Universe also gave pink slips to 55 employees. Even as Quizy announced a complete shutdown, Real money gaming app Fantok and crypto gaming app One World Nation (OWN) said they were halting their operations.

Despite the highest taxation and a few game firms calling it a day, the real-money gaming industry remains massive.

According to a Lumikai report released in November 2024, real-money gaming remains the largest revenue contributor to the overall gaming industry, which was pegged at USD 3.8 billion in FY2023-24. Real-money games accounted for USD 2.4 billion of the total revenues. The report estimates that the gaming industry will be worth USD 9.2 billion by FY29.

The All India Gaming Federation (AIGF) says that the "online skill gaming" industry is a sunrise sector with over INR 2 lakh crore valuation and over INR 31,000 crore in revenue. The industry supports 2 lakh direct and indirect jobs.

These real-money games platforms have also grown immensely in size in recent years. For instance, Dream Sports reported a revenue of INR 6,580.84 in FY23 whereas WinZo had INR 690.71 crore in the same period, according to the Kredible. Games24x7 had a revenue of INR 2,023 crore in FY23.

"We acknowledge the Government's decision to ban real money gaming and fully respect that this step has been taken after careful consideration of the social and regulatory concerns associated with the sector. As responsible stakeholders, we recognise the government's priority to safeguard consumer interests, prevent harm, and ensure that innovation aligns with national well-being," said Shweta Rajpal Kohli, President and CEO, Startup Policy Forum.

"At the same time, we believe India's gaming industry holds significant potential for innovation, entrepreneurship, and job creation. We are committed to working constructively with the government to explore regulatory frameworks within and outside this legislation by enabling stakeholder consultations with an aim of balancing responsible innovation with robust consumer protection," she added.

Opposition and what next?

Opposition leader and member of Parliament Karti P Chidambaram urged the government to send the bill to the select committee and hold public hearings to ensure a balanced and informed approach.

"The proposed online gaming bill, The Promotion and Regulation of Online Gaming Bill, 2025 is being introduced without industry consultation, is a knee-jerk reaction that could prove counterproductive. It risks creating significant national security concerns by driving financial transactions offshore and pushing users toward the dark web," he said in a tweet.

"The bill threatens to eliminate 400,000 jobs, erase ₹20,000 crore in GST and TDS revenue (2024 data), and wipe out $6 billion in investments, while stifling future funding opportunities for game developers and related sectors," he added.

Another opposition leader Shashi Tharoor took to social media to seek a wider discussion on the bill.

"It's a pity that the government seems to have derived no lessons from the experience of other countries that have considered this issue. The bill could at least have been referred to a committee of Parliament to consider all the pros and cons before rushing it into law," he said in a series of tweets.

"The proposed gaming bill is a concern. The industry has attracted significant capital and created thousands of jobs. The legislation may reverse that progress.

This could lead to widespread job losses. It could also stifle innovation in a sector that has been flourishing for a while," said a senior VC based out of Mumbai on the condition of anonymity.

"I hope the government reconsiders this move and instead opts for a regulatory mechanism that brings responsible growth. A balanced approach is needed to secure the industry," the VC added.

Rouble Chhabra, an advocate and entrepreneur, suggests that these firms can file writ petitions before the high courts or the Supreme Court.

"If a State government imposes a ban or restrictive regulation, real-money gaming operators can promptly file writs (under Articles 226 or 32)," she said, adding they can emphasize the lack of legislative competence, excessive restrictions, and failure to distinguish skill vis-a-vis chance.

Real-money gaming firms can also consider seeking interim relief while new legislation is pending by applying for stay orders against enforcement under legislations conflicting with constitutional protection until the new law comes into effect, Rouble further explained.

Dream Sports declined to comment on the development. Entrepreneur has reached out to Meity, AIGF and WinZo for comments. We will update the copy with their statements as soon as they reach us.

For real money gaming firms, a relatively muted opposition from the political parties and a possible confrontation with the government hint at the tough road ahead for them. For now, the best they can hope is that the bill gets stalled or returns later in a newer manner that regularizes them.

Ultimately, the future of real money gaming in India appears to be bleak. Even as the government has come down hard and considering the stigma of poor societal impact, they can look at pivoting to a different business model which is more sustainable and, most importantly, responsible.

Overall, unfettered growth of the online gaming industry will definitely take a hit in terms of revenue and investments made by VCs, if the bill becomes a law. Additionally, typical gamers have long wanted to disassociate themselves from these real-money gaming platforms.