View: The New Online Gaming Act Is a Win for Families and Digital Innovation
India's new gaming law bans real-money games, fostering innovation and safeguarding families.
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(On 21 August, 2025, India's Parliament approved the Promotion and Regulation of Online Gaming Bill, 2025, to prohibit online games involving monetary stakes. The move has been met with contrasting reactions with some hailing it as a move to contain online gambling. Critics have raised concerns over the significant threat to the thriving fantasy gaming industry.
In this view, Subimal Bhattacharjee argues that the Act marks a watershed moment in the country's digital governance journey and how it's most significant achievement lies in its unflinching stance against real-money gaming platforms that have wreaked havoc on Indian families.)
Last week’s passage of The Promotion and Regulation of Online Gaming Act, 2025 marks a watershed moment in the country's digital governance journey.
This legislation represents more than regulatory housekeeping. It's a strategic recalibration that prioritises societal welfare while positioning India as a global leader in legitimate digital gaming and esports. By drawing clear lines between harmful gambling and constructive gaming, India has taken a bold step toward protecting its citizens while fostering innovation.
More alarmingly, suicide rates among problem gamblers aged 20-49 are 19.3 times higher than the general population, while countless young Indians have fallen prey to predatory gaming apps that masquerade as skill-based platforms while functioning as sophisticated gambling operations.
India and its Growing Gambling Addiction
The psychological manipulation inherent in these platforms—with their intermittent reinforcement schedules and debt-inducing mechanics—has led to financial ruin, family breakdowns, and in extreme cases, suicide among vulnerable youth.
By prohibiting online games involving monetary stakes and outlawing their advertisements, the Act addresses what had become a public health crisis. The legislation recognises that the human brain, particularly in young adults, is poorly equipped to resist the carefully engineered addiction mechanisms built into these platforms.
With gaming addiction affecting 3-4 percent of gamers globally and mental health professionals reporting "three to four cases of gadget and gaming addiction every week," real-money gaming had begun undermining traditional values around earned income and financial responsibility, creating a generation that confused gambling with legitimate economic activity.
The Act's emphasis on protecting youth from "predatory money-gaming apps" acknowledges that society has a collective responsibility to shield its most vulnerable members from exploitation.
The National Security Angle
From a national security perspective, the unregulated real-money gaming sector had created significant vulnerabilities that the new Act systematically addresses. These platforms often operated with minimal oversight, creating potential channels for money laundering, terrorist financing, and foreign interference. The lack of transparency in ownership structures and the cross-border nature of many operations posed risks that extended far beyond individual addiction.
The Act's provision for a National Online Gaming Authority represents a crucial step toward comprehensive oversight. This centralised body will ensure that gaming platforms operating in India meet strict security standards, maintain transparent ownership structures, and protect user data from foreign interference.
Moreover, the prohibition on financial transactions related to money-based games eliminates a significant avenue for illicit financial flows. The previous system allowed massive sums to move across borders with minimal scrutiny, creating opportunities for currency manipulation and tax evasion that threatened economic stability.
What the Act Gets Right
The Act's genius lies not in its prohibitions but in its simultaneous promotion of legitimate gaming sectors. By explicitly encouraging esports and educational games, the legislation creates space for an industry renaissance built on skill development rather than financial exploitation. This distinction between gambling-based and skill-based gaming is crucial for India's technological future.
The Act's support for this sector acknowledges that gaming, when divorced from monetary wagering, can be a force for positive youth engagement.
The emphasis on educational and social games opens new frontiers for India's software industry. Rather than competing in the morally questionable real-money gaming space, Indian developers can now focus on creating globally competitive products in legitimate gaming categories. This shift from rent-seeking gambling platforms to value-creating gaming solutions represents a maturation of India's digital economy.
What the Critics Get Wrong
Critics argue that the Act's blanket ban on real-money gaming eliminates a significant industry valued at $3.8 billion in FY24, with real-money gaming accounting for 86 percent of the market share and threatening employment. However, this perspective overlooks the fundamental distinction between genuine economic activity and extractive gambling operations.
The transition period will undoubtedly be challenging for companies heavily invested in real-money gaming. However, the Act's simultaneous promotion of legitimate gaming sectors provides clear pathways for industry transformation. Companies with genuine technological capabilities can pivot toward esports, educational gaming, and skill-based platforms that create rather than extract value.
The regulatory clarity provided by the Act actually strengthens India's legitimate gaming sector by removing the stigma and uncertainty that had clouded the entire industry. International investors and partners, previously wary of India's gaming sector due to its association with gambling, can now engage confidently with clearly legitimate segments.
The Act positions India to become a global hub for legitimate online gaming and esports, leveraging its massive gaming audience that is expected to reach 591 million by 2024, positioning India as the second-largest market globally for game downloads. By eliminating the distraction of gambling-based platforms, the country can focus its considerable technological talent on creating world-class gaming experiences.
The establishment of the Online Gaming Authority creates an institutional foundation for coordinated policy support and strategic development. This centralised approach enables India to develop comprehensive policies that balance innovation with protection, ensuring that the gaming sector contributes positively to the digital economy.
Focus on Protecting Youth
Furthermore, the Act's emphasis on protecting youth while promoting skill-based gaming aligns perfectly with India's demographic dividend. Rather than allowing a generation of young Indians to be trapped in gambling addiction, the country can channel their energy and talent toward productive digital engagement.
The Act represents sophisticated digital governance that balances multiple competing interests while maintaining clear moral principles. It clears the path for India to build a gaming sector based on skill, creativity, and positive social impact, rather than exploitation and addiction.
The Act demonstrates that it is possible to embrace digital transformation while maintaining the moral foundations necessary for sustainable social development.
The success of this legislation will ultimately be measured not by the gaming industry it eliminates, but by the vibrant, legitimate gaming ecosystem it enables.
(Subimal Bhattacharjee is a Visiting Fellow at Ostrom Workshop, Indiana University Bloomington, USA, and a cybersecurity specialist. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)