India’s Government Poised to Propose Complete Ban on Real-Money Gaming

Real-money gaming firms are grappling with major challenges as India considers a sweeping ban on their operations through new legislation.

The Indian government plans to prohibit real-money games—regardless of skill or chance—under a draft online gaming regulation shared with TechCrunch. This information was validated by three sources, including a consultant from the Indian IT ministry and two individuals tied closely to the Indian government and the real-money gaming industry.

Tentatively named The Promotion and Regulation of Online Gaming Act, 2025, this proposed legislation aims to limit online games with real-money stakes and prohibit their advertisements and financial transactions.

“No bank, financial institution, or any person facilitating financial transactions or fund authorizations shall engage in, allow, support, or otherwise facilitate any payment for any online money gaming service,” the draft states.

Real-money gaming has become the main revenue driver for India’s online gaming sector, which reported $3.8 billion in revenue for the financial year 2023–24—a 23% rise year-over-year, according to a recent study from gaming-focused VC firm Lumikai. Of this total, real-money gaming accounted for $2.4 billion.

Despite its growth, the sector is under increased scrutiny due to public concerns over harm occurrences—including reports of individuals taking their lives after losing substantial amounts in games. Industry representatives primarily link these issues to offshore betting and gaming applications, which continue to thrive despite consistent enforcement actions by federal and state authorities, such as website blocks and account suspensions.

In 2023, the Indian government imposed a 28% tax on online gaming to reduce real-money participation—a move the industry has condemned as “catastrophic” and “unconstitutional.” Notable investors like Tiger Global and Kotak urged Prime Minister Modi to reconsider the tax, warning of $2.5 billion in potential losses and a million job cuts. While the tax remains, companies have contested its retroactive application in the Supreme Court, with reports suggesting it could be increased to 40% under new regulations.

The draft legislation indicates that real-money gaming companies could face up to three years in prison, a fine of up to ₹10 million (approximately $115,000), or both. Celebrities endorsing these games on any platform could face up to two years of imprisonment or a fine of ₹5 million (around $57,000). The bill also empowers the Indian government to establish a regulatory body to oversee its implementation.

“If this legislation passes, many companies will close down,” remarked the founder of a notable Indian real-money gaming startup, who requested anonymity due to the draft’s confidentiality.

Investors share similar worries regarding the impending legislation, which is expected to be put forth in the Indian parliament for discussion shortly.

“All unicorns in this sector will be significantly impacted if this comes to fruition,” stated an investor involved with Indian real-money gaming startups, who preferred to remain anonymous until the government publicly discloses the proposal.

Leading Indian real-money gaming startups like Dream Sports, Games24x7, and WinZO have collectively raised billions and generate substantial revenues from millions of users. According to Tracxn, India holds the top position in the global count of real-money gaming startups, followed by the U.S. and the U.K.

While many of these firms also offer non-monetized games, one founder revealed to TechCrunch that over 85% of their total revenue is derived from real-money gaming. They chose not to be quoted on the record due to the draft’s confidentiality but were willing to share insights anonymously.

Furthermore, some startups are considering options outside of India to sustain their operations amid regulatory pressures, though these initiatives have yet to yield success, as they currently rely on the Indian market for nearly all their revenue, as noted by the aforementioned founder.

This is not the first occasion that New Delhi has sought to regulate real-money gaming. In 2023, the Indian government updated the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to address “user harm” associated with real-money games. They proposed creating self-regulatory organizations to certify legitimate games while banning illegal betting and gambling. However, the self-regulation framework stalled due to disagreements among industry stakeholders about enforcement and standards.

Local reports on Tuesday indicated that India’s Cabinet had approved the proposed bill for introduction in the lower house of parliament as soon as Wednesday, although this development has not been officially confirmed by the Indian government.

The Indian IT ministry has not responded to requests for comments.