Two weeks back, the Modi government banned online games involving real money in what can be described as a rushed decision. The Promotion and Regulation of Online Gaming Bill, 2025 was passed in the Lok Sabha through a voice vote the same day it was tabled on 20 August. The next day, it was presented and passed in the Rajya Sabha; and the day after, it received the President’s nod.
The ban would directly translate to closure of 400+ companies and the loss of over 2 lakh jobs, claimed a letter jointly written by the All India Gaming Federation (AIFG), E-Gaming Federation (EGF) and the Federation of India Fantasy Sports (FIFS), and reportedly sent to Union Home Minister Amit Shah.
The industry bodies underlined that online gaming generates Rs 31,000 crore in annual revenue. Why didn’t the government deem it fit to open the Bill to a meaningful debate when billions in revenue and lakhs of jobs are on the line?
Ashwini Vaishnaw, the Union Minister for Electronics and Information Technology, while introducing the bill said that it was “designed to curb addiction, financial ruin and social distress” caused by platforms that thrive on promises of quick money. But so does lottery, and it's legal in 13 states in India.
Then again, there are developed economies which are earning big by regulating the sector— the UK earns £3.4 billion annually from gambling (which includes sports betting, lottery, casinos, etc.) in taxes.
In this story, The Quint examines if India can emulate UK’s regulations on gambling or Kerala’s policy on lottery to sustain the industry whilst curbing the ills of gambling; and if a blanket prohibition will lead to the intended reform when evidence suggests otherwise.
How Kerala & UK Can Save India's ₹316 bn Online Gaming Industry & Lakhs of Jobs
1. But First, What is the Value of India's Online Gaming Industry?
According to a report released by FICCI and EY in March 2025, the online gaming segment is projected to grow at a Compound Annual Growth Rate (CAGR) of 10.8 percent, reaching Rs 31,600 crore by 2027. In addition, the segment contributed Rs 8,250 crore in Goods and Services Tax (GST) in FY 24.
More youngsters are taking to online gaming in India with their numbers increasing from 42 crore in 2022 to 51.7 crore in 2025.
It is important to note here that the Bill categorises online gaming into three variants:
eSports: Competitive digital sports where teams or individuals participate in organized tournaments, such as FIFA, Counter Strike, etc.
Social games: Casual games that are primarily skill-based and designed for entertainment, learning, or social interaction.
Online Money Games: Aka Real Money Games or RMGs, these include games where financial stakes are involved, whether based on chance, skill, or both. Eg: fantasy sports, rummy, poker, etc.
Of these, the government has banned RMGs while “encouraging e-sports" and “promoting social games.” The Bill states that it “clearly separates constructive digital recreation from betting, gambling and fantasy money games that exploit users with false promises of profit.”
The question, then, is: What is the share of real money or transaction-based games in India’s online gaming sector?
The FICCI and EY report indicates that over 75 percent of the online gaming sector’s revenue is generated by RMGs. Besides, more than 15.5 crore gamers engaged with RMGs in FY 2024.
Dream Sports, the parent company of fantasy sports leader Dream 11 (which is the primary sponsor of the Indian cricket team), lost 95 percent of its revenue and all its profits, company CEO Harsh Jain told Moneycontrol on 25 August.
Although Jain asserted that there wouldn’t be any layoffs at his unicorn, Mobile Premiere League (MPL) on Monday, 1 September announced that it will be laying of 60 percent of its domestic workforce, i.e. around 300 employees.
Expand2. What We Gained, What We Lost
There’s good news, there’s bad news and there’s more bad news which is dressed up as good news.
The good news is that the Act has shown intent for reform, in that it protects its citizens from falling prey to debt traps and gambling addiction, which have pushed many a family towards financial ruin.
“RMGs usually target people in precarity. A lot of youngsters, who live alone, also end up playing these games of luck. For their sake, I’d say the Bill is welcome,” said S Vasudev, a PhD scholar doing research on video games in the Indian perspective.
Although, the Bill states that “45 crore people were negatively affected by online money games, facing a collective loss of more than Rs. 20,000 crore,” the numbers seem inflated when compared to the FICCI and EY report.
Further, the Bill says that some gaming platforms were being used for illegal messaging and terror financing. “Money being diverted outside the country for criminal activities is a problem and will require tougher checks and balances,” Shamindra Nath Roy, Visiting Fellow at Centre for Policy Research (CPR) told The Quint.
The bad news is that lakhs of app developers and coders, who work in the 400+ startups, are now staring at layoffs and an overnight loss of livelihood.
“With the advent of Artificial Intelligence, the jobs of app developers, game developers and coders are quickly becoming redundant. If the Bill puts 2 lakh people out of work, then in which industry will they be absorbed?” asked Vasudev. He added that developing games and apps for Android and iOS is a very lucrative job market for Computer Science or Information Technology (IT) graduates.
And the worse news is that a blanket ban will only push people towards circumventing it through illegal means. Case in point, the liquor ban in Bihar.
Expand3. Economics of Prohibition Don’t Work
Renowned economists from Friedman to Thornton have argued that prohibition (of say, liquor or gambling) leads to higher prices, increased crime and the development of more potent illegal substances.
In their joint letter, the gaming federations too reportedly warned of pushing users to illegal matka networks and offshore gambling websites.
“After the complete ban on sale and consumption of liquor in Bihar, has people’s spending on liquor decreased? Has the people’s willingness to not consume liquor increased? No. What has increased is the number of illegal channels to smuggle alcohol and deaths due to consumption of spurious alcohol. Data needs to be collected to see if the policy has yielded the intended results,” Roy explained.
In a recent public rally in Patna, Prashant Kishore claimed that Bihar incurs a loss of Rs 20,000 crore each year due to the liquor ban. He promised to the lift the ban if his party is voted to power.
Roy warned that banning an ecosystem which had been institutionalised, will inevitably lead to the flourishing of an illegal industry. Besides, the shock effect created by the Bill will trickle down to impact employment in the gaming industry and the Animation, Visual Effects, Gaming, and Comics (AVGC) sectors linked to it.
“A regulatory body must be made to understand how the online gaming industry works. It should collect data—how much money is being saved with the Bill and how much money lost—and use it wisely,” Roy asserted. He said that one must also focus on how many affected individuals have been rehabilitated.
Besides, legal prohibition hasn’t affected behavioural change, said Deepanshu Mohan, Professor of Economics and Dean, OP Jindal Global University.
“Decentralised community-based interventions by civil society networks are known to be more impactful in modifying behaviour. For instance, the role of Anganwadis in promoting children’s health, or inculcating the use of contraceptives,” Mohan told The Quint.
He underscored the importance of identifying which target group is being most exploited by RMGs; and what kind of messaging or psycho-social intervention has worked in the past, especially in case of addiction.
Expand4. How is Lottery Legal?
India allows certain games of chance such as the ones played in casinos, horse racing and betting, as well as lottery. Over the years, the Supreme Court has ruled that lottery is a form of “betting and gambling” and is governed by state regulations.
13 states in India have legalised lottery, with Kerala generating over Rs 12,500 crore—nearly 10 percent of the state’s total revenue—in financial year 2023-24. How?
Kerala banned private lotteries and runs the system entirely through the Kerala State Lotteries Department (under the Finance Ministry). Tickets are printed at government presses and sold only by authorised agents. Online sale of tickets is not allowed. A share of the proceeds is directed to welfare schemes such as the Karunya Benevolent Fund, providing aid to poor patients needing treatment for cancer, heart disease, and kidney ailments.
Could the Bill have borrowed a leaf from Kerala's lottery regulation?
“The structure and clientele for lottery are very different. The ticket fee is Rs 40-50, so even if one buys 10 tickets a month, he is not spending more than Rs 500 a month,” Roy said.
Vasudev pointed out that most chance-based games, including fantasy sports, have an entry fee of no more than Rs 50. “Many of them offer lower access cost than lottery. But lottery has certain scrutiny which these chance-based betting apps lack. This is where lawmakers can fill the regulatory hole,” he contended.
Interestingly, lottery is also taxed — buyers pay 28 percent GST while purchasing the ticket; winners pay 30 percent income tax plus cess on the prize money— rendering it formality and giving both the state and the central government a means of income.
Expand5. Can We Not Emulate UK?
The United Kingdom (UK) has a rather remunerative gambling industry, which generated £11.5 billion in revenue last year. It encompasses online gaming, betting, casinos and high street bookmakers.
While chance-based games played online are taxed at 21 percent, general betting is taxed at 15 percent. From these taxes, the UK’s Treasury earned £3.6 billion last year, of which £1.2 billion, or a third, was from online gaming.
“The UK enforces exhaustive KYC requirements and eligibility checks in gambling. Age verification and parental controls are strictly monitored for online content, where proof of ID may be required to watch 18-rated films,” Vasudev said.
To regulate the gambling industry, the UK has inculcated mandatory affordability checks for high-spending gamblers; a self-exclusion scheme that lets players block themselves from RMGs; strict rules on advertising; and interventions when there are signs of problem gambling. The industry is required to contribute to GambleAware, which funds research, education, and treatment for gambling addiction.
Can we not emulate this regulation for our online gaming industry?
“Western countries have a more robust understanding of addiction, in that they don’t attach a moral currency to it. What we, therefore, need is proper empirical and science-based studies to ensure real money games are not unregulated as they are now,” Vasudev concluded.
Expand
But First, What is the Value of India's Online Gaming Industry?
According to a report released by FICCI and EY in March 2025, the online gaming segment is projected to grow at a Compound Annual Growth Rate (CAGR) of 10.8 percent, reaching Rs 31,600 crore by 2027. In addition, the segment contributed Rs 8,250 crore in Goods and Services Tax (GST) in FY 24.
More youngsters are taking to online gaming in India with their numbers increasing from 42 crore in 2022 to 51.7 crore in 2025.
It is important to note here that the Bill categorises online gaming into three variants:
eSports: Competitive digital sports where teams or individuals participate in organized tournaments, such as FIFA, Counter Strike, etc.
Social games: Casual games that are primarily skill-based and designed for entertainment, learning, or social interaction.
Online Money Games: Aka Real Money Games or RMGs, these include games where financial stakes are involved, whether based on chance, skill, or both. Eg: fantasy sports, rummy, poker, etc.
Of these, the government has banned RMGs while “encouraging e-sports" and “promoting social games.” The Bill states that it “clearly separates constructive digital recreation from betting, gambling and fantasy money games that exploit users with false promises of profit.”
The question, then, is: What is the share of real money or transaction-based games in India’s online gaming sector?
The FICCI and EY report indicates that over 75 percent of the online gaming sector’s revenue is generated by RMGs. Besides, more than 15.5 crore gamers engaged with RMGs in FY 2024.
Dream Sports, the parent company of fantasy sports leader Dream 11 (which is the primary sponsor of the Indian cricket team), lost 95 percent of its revenue and all its profits, company CEO Harsh Jain told Moneycontrol on 25 August.
Although Jain asserted that there wouldn’t be any layoffs at his unicorn, Mobile Premiere League (MPL) on Monday, 1 September announced that it will be laying of 60 percent of its domestic workforce, i.e. around 300 employees.
What We Gained, What We Lost
There’s good news, there’s bad news and there’s more bad news which is dressed up as good news.
The good news is that the Act has shown intent for reform, in that it protects its citizens from falling prey to debt traps and gambling addiction, which have pushed many a family towards financial ruin.
“RMGs usually target people in precarity. A lot of youngsters, who live alone, also end up playing these games of luck. For their sake, I’d say the Bill is welcome,” said S Vasudev, a PhD scholar doing research on video games in the Indian perspective.
Although, the Bill states that “45 crore people were negatively affected by online money games, facing a collective loss of more than Rs. 20,000 crore,” the numbers seem inflated when compared to the FICCI and EY report.
Further, the Bill says that some gaming platforms were being used for illegal messaging and terror financing. “Money being diverted outside the country for criminal activities is a problem and will require tougher checks and balances,” Shamindra Nath Roy, Visiting Fellow at Centre for Policy Research (CPR) told The Quint.
The bad news is that lakhs of app developers and coders, who work in the 400+ startups, are now staring at layoffs and an overnight loss of livelihood.
“With the advent of Artificial Intelligence, the jobs of app developers, game developers and coders are quickly becoming redundant. If the Bill puts 2 lakh people out of work, then in which industry will they be absorbed?” asked Vasudev. He added that developing games and apps for Android and iOS is a very lucrative job market for Computer Science or Information Technology (IT) graduates.
And the worse news is that a blanket ban will only push people towards circumventing it through illegal means. Case in point, the liquor ban in Bihar.
Economics of Prohibition Don’t Work
Renowned economists from Friedman to Thornton have argued that prohibition (of say, liquor or gambling) leads to higher prices, increased crime and the development of more potent illegal substances.
In their joint letter, the gaming federations too reportedly warned of pushing users to illegal matka networks and offshore gambling websites.
“After the complete ban on sale and consumption of liquor in Bihar, has people’s spending on liquor decreased? Has the people’s willingness to not consume liquor increased? No. What has increased is the number of illegal channels to smuggle alcohol and deaths due to consumption of spurious alcohol. Data needs to be collected to see if the policy has yielded the intended results,” Roy explained.
In a recent public rally in Patna, Prashant Kishore claimed that Bihar incurs a loss of Rs 20,000 crore each year due to the liquor ban. He promised to the lift the ban if his party is voted to power.
Roy warned that banning an ecosystem which had been institutionalised, will inevitably lead to the flourishing of an illegal industry. Besides, the shock effect created by the Bill will trickle down to impact employment in the gaming industry and the Animation, Visual Effects, Gaming, and Comics (AVGC) sectors linked to it.
“A regulatory body must be made to understand how the online gaming industry works. It should collect data—how much money is being saved with the Bill and how much money lost—and use it wisely,” Roy asserted. He said that one must also focus on how many affected individuals have been rehabilitated.
Besides, legal prohibition hasn’t affected behavioural change, said Deepanshu Mohan, Professor of Economics and Dean, OP Jindal Global University.
“Decentralised community-based interventions by civil society networks are known to be more impactful in modifying behaviour. For instance, the role of Anganwadis in promoting children’s health, or inculcating the use of contraceptives,” Mohan told The Quint.
He underscored the importance of identifying which target group is being most exploited by RMGs; and what kind of messaging or psycho-social intervention has worked in the past, especially in case of addiction.
How is Lottery Legal?
India allows certain games of chance such as the ones played in casinos, horse racing and betting, as well as lottery. Over the years, the Supreme Court has ruled that lottery is a form of “betting and gambling” and is governed by state regulations.
13 states in India have legalised lottery, with Kerala generating over Rs 12,500 crore—nearly 10 percent of the state’s total revenue—in financial year 2023-24. How?
Kerala banned private lotteries and runs the system entirely through the Kerala State Lotteries Department (under the Finance Ministry). Tickets are printed at government presses and sold only by authorised agents. Online sale of tickets is not allowed. A share of the proceeds is directed to welfare schemes such as the Karunya Benevolent Fund, providing aid to poor patients needing treatment for cancer, heart disease, and kidney ailments.
Could the Bill have borrowed a leaf from Kerala's lottery regulation?
“The structure and clientele for lottery are very different. The ticket fee is Rs 40-50, so even if one buys 10 tickets a month, he is not spending more than Rs 500 a month,” Roy said.
Vasudev pointed out that most chance-based games, including fantasy sports, have an entry fee of no more than Rs 50. “Many of them offer lower access cost than lottery. But lottery has certain scrutiny which these chance-based betting apps lack. This is where lawmakers can fill the regulatory hole,” he contended.
Interestingly, lottery is also taxed — buyers pay 28 percent GST while purchasing the ticket; winners pay 30 percent income tax plus cess on the prize money— rendering it formality and giving both the state and the central government a means of income.
Can We Not Emulate UK?
The United Kingdom (UK) has a rather remunerative gambling industry, which generated £11.5 billion in revenue last year. It encompasses online gaming, betting, casinos and high street bookmakers.
While chance-based games played online are taxed at 21 percent, general betting is taxed at 15 percent. From these taxes, the UK’s Treasury earned £3.6 billion last year, of which £1.2 billion, or a third, was from online gaming.
“The UK enforces exhaustive KYC requirements and eligibility checks in gambling. Age verification and parental controls are strictly monitored for online content, where proof of ID may be required to watch 18-rated films,” Vasudev said.
To regulate the gambling industry, the UK has inculcated mandatory affordability checks for high-spending gamblers; a self-exclusion scheme that lets players block themselves from RMGs; strict rules on advertising; and interventions when there are signs of problem gambling. The industry is required to contribute to GambleAware, which funds research, education, and treatment for gambling addiction.
Can we not emulate this regulation for our online gaming industry?
“Western countries have a more robust understanding of addiction, in that they don’t attach a moral currency to it. What we, therefore, need is proper empirical and science-based studies to ensure real money games are not unregulated as they are now,” Vasudev concluded.