Impact of the New Regulation on Real-Money Online Gaming in India: India’s online gaming sector, once celebrated as one of the fastest-growing digital industries in the world, is now facing its most disruptive regulatory intervention yet. The Promotion and Regulation of Online Gaming Act, 2025, passed by Parliament in August and effective from 1 October 2025, has introduced a sweeping nationwide ban on all real-money online games (RMG). This law, combined with earlier tax reforms such as the 28% GST on deposits introduced in 2023, has shaken the foundations of the industry.
For players, companies, and investors, the implications are immediate and severe. This report explores the new regulation in depth, its background, and its far-reaching impacts on India’s gaming ecosystem.
Background to the Ban: The Rise of Real-Money Gaming
Before 2025, real-money gaming was the dominant segment of India’s gaming market. Fantasy sports platforms like Dream11, rummy and poker apps like PokerBaazi, and multi-game platforms like MPL and WinZO have built user bases in the tens of millions. The sector contributed ~83% of India’s gaming revenues, according to EY, and supported over 100,000 jobs.
The boom was driven by:
- Rapid smartphone adoption (660M+ users by 2024).
- Cheap internet access.
- A cultural affinity for competitive play, card games, and cricket-based fantasy sports.
However, concerns about gambling addiction, financial fraud, and unregulated money flows had grown louder. The 2025 Act represents the government’s attempt to address these concerns decisively.
Key Provisions of the 2025 Online Gaming Act
The Act lays down strict measures:
- Comprehensive Ban: Any online game involving stakes is prohibited, regardless of whether it is a game of skill, chance, or hybrid. This ends the long-standing legal distinction that once allowed skill-based games to operate.
- Ban on Advertising & Promotion: Companies can no longer promote RMG platforms through sponsorships, celebrity endorsements, or online ads.
- Financial Controls: Banks and payment processors are directed to block transactions linked to RMG.
- Online Gaming Authority: A central regulator will license, classify, and monitor permitted gaming activities, such as esports and social/casual gaming.
- Penalties:
- Hosting money games: up to 3 years’ jail / ₹1 crore fine.
- Repeat offences: up to 5 years / ₹2 crore.
- Illegal advertising: up to 2 years’ jail / ₹50 lakh fine.
- Recognition of Esports: Esports are formally recognised as a legitimate sport, opening the door for investment and development in this space.
Earlier Regulation: The 28% GST Shock of 2023
The industry’s troubles began earlier, in October 2023, when India’s GST Council imposed a flat 28% tax on the full value of all player deposits. Previously, tax applied only to the commission (Gross Gaming Revenue).
This sudden shift:
- Increased operational costs significantly.
- Made Indian platforms less competitive compared to offshore operators.
- Triggered user migration to foreign sites offering games without GST or TDS.
Reports suggested that by 2024, 83% of Indian players’ gaming spend was leaving the domestic market (Economic Times). Dream11 projected an 80% drop in EBITDA due to the GST alone (Entrackr).
The GST hike set the stage for the industry’s financial struggles, which the 2025 ban has now compounded.
Immediate Industry Impact of the 2025 Ban
Platform Shutdowns and Pivots
- Dream11 (Dream Sports): Shut down paid contests and is pivoting toward free-to-play formats and sports content.
- My11Circle (Games24x7): Suspended all RMG offerings.
- MPL (Mobile Premier League): Disabled deposits and stopped real-money tournaments immediately after the law passed.
- WinZO: Halted money games but promised to retain employees by shifting focus to free games.
- PokerBaazi (Moonshine): Closed all poker and rummy offerings.
- Junglee Games (Flutter): International operator exited India entirely, incurring losses of ~$200M (Reuters).
Job Losses
- ~2,000 layoffs reported within weeks of the ban.
- Analysts warn that up to 6,000 jobs could be lost across major firms if conditions persist (Economic Times).
- Smaller startups like Gameskraft (A23) are preparing mass layoffs and salary advances to cushion employees.
Investor Fallout
- Pre-ban valuation of top RMG firms was estimated at ₹2 trillion (TechCrunch). That value collapsed overnight.
- Public companies like Nazara Technologies lost over 20% of their market cap within days of the ban.
- Smaller gaming-related stocks (OnMobile, Delta Corp) also slid.
User Migration
- Millions of users are reportedly moving to offshore and unregulated platforms.
- Industry bodies warn that this shift exposes Indian players to higher risks of fraud, money laundering, and predatory practices (India Today).
Government vs Industry Reactions
- Government position: IT Minister Ashwini Vaishnaw defended the ban, citing instances of money laundering and terror funding. PM Modi framed the law as protecting families while promoting esports and innovation.
- Industry position: The All India Gaming Federation (AIGF) described the ban as a “death knell” for the RMG industry. Startups argue that it unfairly equates skill-based games with gambling.
- Consumer groups: Some advocacy groups supported the move, pointing to cases of addiction and suicides linked to RMG platforms.
Legal Challenges in the Supreme Court
The law is being challenged in the Supreme Court, with petitioners raising constitutional concerns:
- Jurisdiction: Gaming is traditionally a State subject under India’s Constitution, but Parliament cited telecom powers to legislate.
- Equality and Business Rights: Critics argue that banning skill games violates Articles 14 and 19.
- Proportionality: The heavy penalties may not meet the standard of proportionality under Article 21.
- Vagueness: The Act lumps skill games with chance-based gambling, creating ambiguity.
The SC has consolidated all cases and will hear the matter post-Diwali 2025 (LiveMint).
Economic Scale of the Sector Pre-Ban
- Revenue: ₹220 billion in 2023, projected at ₹388 billion by 2026.
- Segment share: RMG contributed ~83% of total gaming revenues.
- Gamers: 488 million online gamers in 2024.
- Employment: Over 100,000 direct and indirect jobs supported by the sector.
These numbers highlight the scale of disruption caused by the ban, effectively eliminating the majority of industry revenues.
What Comes Next
With RMG banned, companies are now pivoting to:
- Esports: Recognised by law, esports may receive new investments.
- Free-to-play models: Ad-supported games and cosmetic in-app purchases.
- Content diversification: Short-video platforms, sports-streaming, and community engagement apps.
However, the industry’s future hinges on the Supreme Court’s verdict. If the law is struck down or amended, RMG may find a way back with stricter oversight. If upheld, the sector will need to reinvent itself entirely.
Conclusion
The Promotion and Regulation of Online Gaming Act, 2025, is a turning point for India’s digital entertainment industry. While it intends to safeguard society from the harms of gambling and fraud, its sweeping ban has dismantled a sector that employed thousands, attracted billions in investment, and entertained millions.
For now, the RMG industry in India is in limbo. Esports, casual gaming, and social platforms may rise in their place, but the uncertainty will persist until the Supreme Court delivers its verdict. The outcome will shape not only the future of gaming in India but also the balance between regulation, innovation, and personal freedom in the digital age.