Saturday, 11 Oct, 2025
Source: Freepik
India’s booming online gaming industry, once seen as a driver of digital growth and jobs, is now at a crossroads. A sweeping ban on money games has reshaped the sector, raising questions of regulation and revenue loss.
India’s online gaming industry, once regarded as a high-potential digital sector, is now facing a major disruption following the government’s blanket ban on online money games. The decision has stalled growth, raised questions about regulation, and left thousands of professionals and startups grappling with uncertainty.
Staffing firm CIEL HR reported that over 2,000 professionals from gaming companies are now seeking new opportunities after the ban. One of the biggest impacts was seen at Mobile Premier League (MPL), which announced plans to cut nearly 60% of its workforce—around 300 of 500 employees—across functions like marketing, finance, engineering, and legal.
In an internal note, MPL CEO Sai Srinivas said the decision was taken “with a heavy heart,” as India, which once contributed half of MPL’s revenue, will no longer generate meaningful income. Rival Dream11, valued at $8 billion, has shut down its fantasy cricket offering, while several poker and rummy platforms have also suspended operations. This setback comes just as the industry was projected to reach $3.6 billion by 2029, after attracting investments from major firms such as Tiger Global and Peak XV Partners.
The sector, with over 400 startups, contributed around $2.3 billion in taxes annually and supported more than 200,000 jobs. Even Dream11 had been a sponsor of India’s national cricket team, underscoring the industry’s growing presence before the recent policy reversal.
The turning point came with the passage of the Promotion and Regulation of Online Gaming Act, 2025, which received presidential assent on August 22. The Act promotes esports and social gaming while prohibiting all online games involving monetary stakes.
The government cited financial, psychological, and social harms as key reasons behind the ban, pointing to addictive features and manipulative algorithms that encourage excessive play and monetary losses.
Under the law, “online money games” are defined as any activity where users deposit stakes or pay fees with the expectation of monetary rewards, irrespective of whether the game is skill- or chance-based. In contrast, esports and social games without monetary stakes are recognized as legitimate forms of digital recreation.
The Act prescribes tough penalties. Offering or facilitating online money games can invite up to three years’ imprisonment and a fine of ₹1 crore. Repeat offenders face jail terms of up to five years and fines of ₹2 crore.
Advertising such games may result in a two-year jail term and fines up to ₹50 lakh, while banks have been barred from processing transactions for money games. Violations could attract a three-year sentence and ₹1 crore fine.
This sweeping ban represents a sharp reversal in policy. Only two years earlier, in April 2023, the government had introduced IT Rules amendments to regulate “permissible” real-money games—a move widely seen as industry-friendly. The new Act removes the long-standing legal distinction between “games of skill” and “games of chance.”
This is significant because several high court rulings had previously classified fantasy sports and other real-money games as skill-based activities, not gambling. In 2022, the Supreme Court upheld a Punjab and Haryana High Court decision recognizing fantasy sports as games of skill.
The financial impact is considerable. India’s online gaming market was worth $3.7 billion in 2024 and projected to exceed $9 billion by 2029, according to a report by WinZO Games and the Interactive Entertainment and Innovation Council (IEIC).
The industry directly employed over 1 lakh people, with expectations of 1.5 lakh jobs by 2025. Real-money gaming contributed 86% of industry revenues. The government estimates that the ban could lead to an annual GST revenue loss of ₹15,000–20,000 crore.
Beyond economics, authorities have also highlighted national security concerns. The misuse of gaming platforms for money laundering, tax evasion, and even terror financing has been well documented.
Overall, India reportedly lost around ₹25,000 crore between 2022 and 2024 to scams involving gaming platforms.
Industry players argue the law was pushed through without sufficient consultation. Gaming lawyer Jay Sayta described it as a “setback” for investors who had backed startups under earlier favourable court rulings. Others fear that banning regulated platforms could drive players towards unregulated offshore gambling sites. “Without these apps, things might get worse,” said Vishal Gondal, co-founder of nCore Games, highlighting that legitimate platforms provided at least some safeguards.
India continues to be a major gaming market, with 591 million gamers—nearly 20% of the global total. Mobile gaming dominates, making up 90% of the domestic market, while overall downloads grew from 5.65 billion in 2019 to 9.5 billion in 2023.
While the government stresses the risks of addiction and financial exploitation, it has also chosen to support esports, educational gaming, and social gaming, aiming to balance consumer protection with innovation.
The online gaming sector in India is undergoing a major transition. From being a fast-growing contributor to jobs, tax revenues, and digital innovation, it now faces uncertainty as businesses restructure or move abroad. The challenge ahead lies in striking the right balance—protecting citizens from harm while harnessing the economic and technological promise of the sector.
