India Prohibits Real-Money Gaming, Threatening $23 Billion Industry
On Wednesday, India’s lower house of parliament passed a landmark online gaming bill aimed at supporting esports and casual gaming without financial stakes, while imposing a total ban on real-money games. This decision could jeopardize billions in investments and significantly threaten the real-money gaming industry, potentially resulting in widespread business closures.
Dubbed the Promotion and Regulation of Online Gaming Bill, 2025, the legislation intends to prohibit real-money games nationwide, regardless of whether those games involve skill or chance. It also aims to ban the promotion of such games and related financial transactions, as previously reported by TechCrunch based on its draft.
“This bill prioritizes societal welfare to tackle a growing issue,” remarked India’s IT minister Ashwini Vaishnaw during the bill’s unveiling in parliament.
The proposed legislation prevents banks and financial institutions from enabling transactions related to real-money games in India. Offenders could face prison sentences of up to three years, fines reaching ₹10 million (approximately $115,000), or both. Additionally, celebrities endorsing such games across any media platform might be subject to a two-year prison term or a fine of ₹5 million (roughly $57,000), as stated in the bill.
Vaishnaw highlighted that the push for the bill arose from various detrimental incidents, including suicides reported to be associated with financial losses in gaming. However, many industry stakeholders attribute these tragic events to offshore gambling apps, which they believe this legislation fails to address.
“This law is likely to face legal scrutiny as it does not meet the proportionality requirement under Article 19(1)(g),” noted Meghna Bal, director of the New Delhi-based think tank Esya Centre. “Instead of safeguarding consumers, it dismantles compliant domestic firms while enabling illegal offshore betting platforms, which are the actual source of financial harm.”
Article 19(1)(g) of India’s Constitution guarantees citizens the right to pursue any profession or engage in any trade or business.
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Prior to the bill’s introduction, industry groups reached out to Prime Minister Narendra Modi, urging his intervention. In a letter reviewed by TechCrunch from the Federation of Indian Fantasy Sports, All India Gaming Federation, and E-Gaming Federation, they expressed concerns that the proposed legislation could favor “illegal offshore gambling operations,” potentially forcing Indian companies out of business. These organizations represent firms like Dream Sports, MPL, WinZO, Gameskraft, Nazara Technologies, and Zupee in the real-money gaming sector.
“By abolishing regulated Indian platforms, millions of players will be directed into illegal networks, offshore gambling sites, and unreliable operators without protections,” the letter stated. (Matka refers to a type of illegal gambling originating in India, involving wagering on random numbers.)
The three industry bodies estimate that real-money gaming startups in India boast a total enterprise value of ₹2 trillion (around $23 billion), generate cumulative revenues of ₹310 billion (approximately $3.6 billion), and contribute ₹200 billion (nearly $2.29 billion) annually in direct and indirect taxes. They anticipate a compound annual growth rate of 28%, which could double the industry’s size by 2028. Industry representatives cautioned that the blanket prohibition could lead to over 200,000 job losses and the shutdown of more than 400 companies.
A similar appeal was made to Indian Home Minister Amit Shah by the same associations. Moreover, some Indian and international investors are weighing their reactions, according to a source who spoke on the condition of anonymity, as plans remain undisclosed.
Nazara Technologies, which previously invested in real-money gaming platforms like PokerBaazi and Classic Rummy, saw its stock price drop by 12.84% on Wednesday, closing at ₹1,220 (about $14). However, the company clarified in a stock exchange filing that it has “no direct exposure” to real-money gaming enterprises, with these platforms generating no revenue for it.
Both Dream Sports and MPL, leading real-money gaming startups, opted not to comment, and WinZO, another significant player, did not respond.
The bill was passed by voice vote in a bustling lower house in under seven minutes after its discussion began. It now requires approval from the upper house and presidential assent to become law.
In contrast, some companies in casual gaming and esports have expressed support for the legislation.
“We commend this decision as it enables us to focus on our core business aspects — monetization, retention, and, most importantly, building exceptional IP for India and the global market, instead of needing to clarify our identity to our audiences,” said Sumit Batheja, CEO and co-founder of Ginger Games, which is part of Krafton’s Indian gaming incubator focused on creating hyper-casual games.
Krafton is the South Korean gaming company known for the immensely popular battle royale game PUBG.
Akshat Rathee, co-founder and managing director of esports company NODWIN Gaming, a subsidiary of Nazara Technologies, emphasized the need for the law to clearly differentiate between esports, online gaming, online social gaming, and online money gaming in a universally accepted manner.
“The ambiguity surrounding the term ‘esports’ has often led to misunderstandings. Such overlaps could create confusion among regulators, players, teams, investors, and organizers striving to develop this sector,” he remarked.
Bal further informed TechCrunch that the bill “decimates esports,” noting that a government-established authority would determine what constitutes legitimate esports.
“The implications extend beyond real-money gaming, affecting the broader ecosystem of businesses reliant on it, posing significant risks for the AVGC [Animation, Visual Effects, Gaming, and Comics] sector as a whole,” she clarified.
In 2023, the Indian government revised the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to reduce “user harm” from real-money games, initiating self-regulatory bodies to restrict illegal betting and gambling while allowing for legitimate games. However, the self-regulation method faltered due to disputes among industry stakeholders concerning enforcement and standards.
In 2023, New Delhi imposed a 28% tax on online gaming to limit real-money play, leading to substantial backlash from industry stakeholders. Prominent investors — including Tiger Global, Peak XV Partners, and Kotak — urged Modi to reconsider, warning of potential losses amounting to $2.5 billion and the risk of one million job cuts. Nonetheless, the tax remained, despite companies challenging its retrospective application in the Supreme Court. Recent reports indicate that this could be increased to 40% under new guidelines.
Rohit Kumar, a founding partner at the New Delhi-based public policy firm The Quantum Hub, commented to TechCrunch that the real challenge posed by the new bill lies in the lack of due process.
“While regulation is essential, abrupt measures like this can harm India’s reputation as a stable and reliable investment destination. If concerns existed, the government should have communicated them clearly from the outset,” he concluded.
