Decoding the Promotion and Regulation of Online Gaming Act 2025: A First Look at Indias New Gaming Law

The prohibition of real money gaming is a reflection of India’s strategy to managing its digital economy and goes beyond simple regulatory policy. The Bill aims to address growing concerns about addiction, financial losses, and societal damage by enacting a blanket prohibition on all money-based games, regardless of whether they involve skill or chance. By acknowledging e-sports, educational, and social gaming as safe and valid forms of enjoyment and economic development, it creates a new future for these industries. To create a vibrant, regulated environment around these industries, the government has committed to funding awareness campaigns and infrastructure.

The Indian Act aligns closer with the UK model, emphasising licensing, consumer protection, and AML compliance. Most Indian laws which regulate gaming in India were enacted before the advent of virtual / online gaming. However, in practice, the application of the general provisions in relation to prohibition of games of chance have been extended to online gaming as well. There is ongoing discussion regarding the legality of many online games, as some of them mix skill and chance. Despite the need for further clarification, online gaming laws in India are essential in differentiating between these two areas. A major obstacle in gaming law in India is figuring out the difference between internet gaming and online gambling.

Conversely, games of pure chance fell within the ambit of “gambling”, a subject reserved to states under Entry 34 of List II, Seventh Schedule of the Constitution. As per the Lotteries (Regulation) Act, 1998, lotteries are schemes for distribution of prizes by lots or by chance to persons participating in the chances of a prize by purchasing tickets for the same. In India, lotteries have specifically been excluded from the ambit of gambling and are regulated by the central legislation as well as similar state specific laws. Lotteries in India can only be carried out by Government authorities or by its agents appointed for the purpose. The state governments may appoint individuals or corporates as distributors or selling agents for the purposes of the lottery through an agreement to market and sell lotteries on behalf of the respective state government. With the gaming industry expected to expand exponentially, robust legal frameworks will become increasingly important to ensure a secure, fair environment.

The Gaming Act aims to prohibit online money gaming and promote and regulate e-sports and casual non-money gaming. Its provisions extend across India and also apply to online money gaming services offered from outside the country but made available within its territory. There has been a spate of public interest litigations (“PILs”) recently that seek directions from courts to instruct the state governments to act against online gaming and gambling (in some cases even against games of skill such as poker and rummy).

How Does This Contradict Previous Government Policy?

Deficiency in services is a subjective concept as no fixed criteria for such determination can be laid down. In India, responsible gaming means encouraging safe gambling habits, protecting players, avoiding addiction, and informing players about the dangers through tools like age verification and self-exclusion options. Since each Indian state has the authority to control gambling within its borders, there are considerable differences in the legislation governing gaming across them. Both federal and state regulations influence the gambling industry in India, occasionally causing conflict or misunderstanding. Legally sound foundations aren’t just “nice to have”—they’re essential for sustainable growth and success in India’s increasingly regulated and dynamic gaming market. Real Money Gaming (RMG) accounts for more than 80% of India’s online gaming revenues.

• The first major reason cited by the government is that it was high time for a legal framework to come into picture, that shall regulate the gaming ecosystem comprising different segments such as casual and social games, online money games etc.
• In India, lotteries have specifically been excluded from the ambit of gambling and are regulated by the central legislation as well as similar state specific laws.
• Many experts have highlighted the challenges of excessive regulation in online gaming, citing heavy taxation and legal uncertainties and urged the government to allow them to operate with greater freedom.
• A consistent approach to gaming law in India is required as the industry grows, with a focus on player protection, moral gaming, and avoiding exploitation, particularly when it involves children.
• C) Increased compliance requirements (registration, KYC, data handling, audit, etc.) for non-monetary platforms.

Federal legislation including the Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006 creates certain restrictions, while individual states maintain primary authority over gambling regulation within their borders. Registering and running a gaming company in India requires a sharp understanding of complex legal frameworks. The legal landscape touches everything—from gaming laws and taxation to data privacy, advertising standards, and intellectual property rights.

In India, the legislative powers are divided between the centre and the states under the Constitution of India, 1950 (“Constitution”). Under its Seventh Schedule, the Constitution grants each state (province) of the country the exclusive power to enact its own laws on “betting and gambling” for its own territory. The Public Gambling Act, 1867 (“Public Gambling Act”), a colonial-era statute still in force, has been adopted by several states including Uttar Pradesh, Madhya Pradesh, and Punjab & Haryana, with some states making their state amendments to it too. Other states have enacted their own pieces of legislation to regulate gaming/gambling activities within their territories under their State Gaming Laws.

One constitutional question is whether Parliament may legislate comprehensively in a field traditionally reserved for states. While gambling falls under the State List, the Union has justified the Act under Entry 31 (communications) and Entry 97 (residuary powers), given the online and cross-border character of gaming. Operating without a licence, offering prohibited games, or violating consumer safeguards attract significant penalties, including imprisonment up to three years and fines up to ₹50 lakh. Gaming regulations are handled at the state level, such as through the Goa Gaming Act. At Lex Confiance India, we are dedicated aviator game to offering professional legal solutions that assist businesses in effectively managing the complexities of the gaming sector.

For this, the OGI first needs to become a member of any SRB registered by the MeitY under the Online Gaming Rules, adhere to the due diligence and other obligations under the Online Gaming Rules, and submit its game format to the relevant committee of the SRB. The process that the SRB will follow to assess and verify the game format will depend on the charter and governing documents of the SRB. At the time of writing, no SRB has been registered by the MeitY and hence there is no information available on the exact process of verification. The content in the corresponding cell applies except the point on Nagaland, which would only apply to online games. In the absence of monetary or equivalent stakes, most State Gaming Laws are unlikely to be triggered.

As per the ITA, the person responsible for paying to any person any such income for an amount exceeding INR 100 is obliged to withhold the said tax, on net winnings, at 30% (plus applicable cess). The term “person” has been defined under the ITA to include, inter alia, an individual, foreign company, etc. The Supreme Court has held betting on horse racing to be a game of skill and consequently entitled to the skill games exemption under the State Gaming Laws. In addition, there is a specific exemption for betting on horse races in most State Gaming Laws too. Legal challenges to the amendments done to the Andhra Pradesh Gaming Act, 1974 (“Andhra Pradesh Act”)iii and the Telangana Gaming Act, 1974 (“Telangana Act”)iv are pending before the regional High Court and the Supreme Court, respectively. Betting on horse races has been judicially recognised as a game of skill and many State Gaming Laws also expressly exclude it from their prohibitions – subject to certain conditions.

The Gaming Act also delegates significant powers to the Central Government to define key aspects of its implementation through future rules. The manner of recognising, categorising, and registering other online games is left to be prescribed later, which is a major source of uncertainty for the industry. In October 2022, the CCPA issued notices to six offshore betting and gambling websites that were advertising themselves through surrogate advertisements. In October 2022 and in February 2023, MeitY imposed blocking orders against a total of more than 150 mobile apps and websites, including those of foreign betting and gambling operators. While this does not fall within the ambit of a “licence”, an OGI offering an “online real-money game” is required to obtain a verification from an SRB in order to offer its online game to users in India.

The following states and union territories are the only exceptions to this general rule as far as the State Gaming Laws are concerned. The draft rules also extend legal protection to officers or authorised persons conducting searches and seizures under the Act, shielding them from lawsuits or legal proceedings arising from such actions. The Authority is required to register an online social game or an e-sport within a reasonable time not exceeding 90 days from the date of first application (subject to limited exclusions for e-sport recognition timelines). Practical enforcement—particularly against offshore platforms targeting Indian players remains uncertain. Lessons may be drawn from cases involving foreign betting sites, where Indian regulators resorted to blocking orders under Section 69A of the IT Act.

India’s gaming industry is booming—thanks to the rapid rise in smartphone users, affordable internet, and a young, digital-savvy population. From casual mobile games to competitive e-sports platforms and real-money fantasy leagues, the ecosystem is vibrant and constantly evolving. C)    “Online social games” and “e-sports” are excluded from the scope of prohibition, but are brought under a registration and compliance framework, reflecting regulatory deference to entertainment, education, and skill-based activities. Where the income of a resident includes income by way of winnings from online games of any sort, including in the nature of betting, gambling, etc., such income would be liable to tax in the hands of such taxpayer, at 30% (plus applicable surcharge and cess).

Gambling Laws and Regulations India 2025

The French model demonstrates how jurisdictions can permit certain forms of online gambling while prohibiting others based on detailed risk assessments and policy priorities. The constitutional challenges raise fundamental questions about the balance between state power and individual rights in India’s federal democracy. Petitioners argue that a complete ban on an entire sector where many games demonstrably require skill violates Article 19(1)(g)’s guarantee of the right to carry on legitimate business, exceeding permissible “reasonable restrictions” under the Constitution. They contend the law is “ultra vires” and vague under Articles 14 and 21, failing to delineate between skill-based activity and chance gambling while lacking adequate procedural safeguards. The Indian Parliament passes the Online Gaming Bill of 2025 that bans all real-money online games with the objective of curbing addiction and financial harm while promoting e-sports and social gaming.

Legislative Journey and Comprehensive Provisions

“Mere skill” has been judicially interpreted to mean games preponderantly of skill. However, instead of laying down an objective criterion to distinguish games of skill from games of chance, courts in India have arrived at their determination based on the facts and circumstances of each case. The state of Nagaland has a licensing regime for skill games, with the Nagaland Act also including a list of recognised games of skill. Sikkim has a licensing regime for all online games – whether of chance or a combination of skill and chance.