Published On: April 11th 2026
Authored By: ABU HENA MUSTAFA KAMAL
South Calcutta Law College, University of Calcutta
Abstract
The Promotion and Regulation of Online Gaming Act, 2025 marks a decisive shift in India’s regulatory approach to the rapidly expanding digital gaming ecosystem. Enacted against a backdrop of fragmented state laws and evolving judicial interpretations, the Act introduces a centralised framework that simultaneously promotes esports and non-monetary online games while imposing a blanket prohibition on online money gaming. This article examines the legislative development of the Act, its key provisions, and the institutional mechanisms established for regulation and enforcement. It critically analyses the Act’s constitutional and legal implications, particularly concerning legislative competence, federalism, and the freedom to trade under Article 19(1)(g) of the Constitution. By engaging with relevant statutes, judicial precedents, and policy rationales, the article evaluates whether the Act represents a balanced regulatory response or an instance of regulatory overreach in India’s digital economy.
I. Introduction
In August 2025, the Parliament of India enacted the Promotion and Regulation of Online Gaming Act, 2025 (“PROG Act”), marking one of the most consequential legal interventions in the country’s burgeoning digital gaming sector. The Act seeks to simultaneously promote certain classes of online gaming (such as esports, social games, and educational games) while imposing a sweeping nationwide prohibition on online money gaming, defined as games involving monetary stakes. This legal development redefines India’s approach to digital entertainment, rebalances federal and state regulatory domains, reconfigures industry practices, and raises urgent constitutional and economic questions.
This article explains the Act’s provisions, situates its legal evolution, and analyses its broader impact on law, industry, and stakeholders.
II. Context and Legislative Development
Online gaming in India has seen exponential growth over the past decade. Fuelled by smartphone penetration, widespread internet access, and youthful demographics, the sector expanded well beyond casual games into fantasy sports, poker, rummy, and other platforms where real money was at stake. These “online money games” became highly lucrative, drawing foreign investment, celebrity endorsements, and high advertising spend. Yet regulators and policymakers increasingly voiced concerns about addiction, financial losses, fraud, and social harms associated with real-money gaming platforms.
Before 2025, online gaming regulation lacked a unified national framework. Legal uncertainty prevailed: states individually applied gambling laws rooted in the colonial-era Public Gambling Act, 1867,[1] and courts grappled with whether skill-based games fell outside “gambling” definitions. Platforms like Dream11 and Mobile Premier League capitalised on this ambiguity, treating their offerings as “games of skill” immune from prohibition.
Against this background, the Union Cabinet approved the Promotion and Regulation of Online Gaming Bill, 2025 on 19 August 2025, and the Lok Sabha passed it on 20 August, followed by Rajya Sabha approval on 21 August 2025. Soon after, the President gave assent, transforming the Bill into the Promotion and Regulation of Online Gaming Act, 2025 (“PROG Act”).[2]
III. Core Provisions of the Act
The PROG Act pursues three broad objectives: (i) promoting responsible and non-monetary gaming, (ii) creating a regulatory regime for online games, and (iii) prohibiting online money gaming and related activity.
A. National Regulatory Authority
One of the Act’s most significant structural shifts is the establishment of a national-level regulatory authority, often referred to in drafts as the National Online Gaming Commission (though details may evolve through subordinate rules). This Authority is empowered to:
– Register and classify online games, including esports and online social games.
– Maintain a National Online Social Games and Esports Registry.
– Issue codes of practice, compliance guidelines, and directions to operators.
While the legislature outlines the Authority’s general remit, detailed operational powers (such as registration criteria and appeals mechanisms) are to be provided through the Draft Promotion and Regulation of Online Gaming Rules, 2025, released for public consultation by the Ministry of Electronics and Information Technology (MeitY).[3]
This national regulatory framework departs from the earlier patchwork of state-level controls and judicially nuanced skill/gambling categorisations, aiming for a unified legal regime applicable across India.
B. Promotion of Esports and Non-Monetary Games
The Act expressly recognises esports, online social games, and educational games as legitimate activities that the State will promote. It obligates the Authority to encourage infrastructure, research, digital literacy, and innovation in such domains. Under this thrust, only games that are registered and comply with prescribed standards will benefit from legal recognition and potential incentives.
By including esports under a formal legal framework, the Act arguably aligns digital competitive gaming with recognised sport governance structures, similar to what the National Sports Governance Act, 2025 envisions for physical and competitive events.
C. Blanket Ban on Online Money Gaming
The most dramatic feature of the PROG Act is Section 5’s complete prohibition on online money gaming. The Act defines online money games as any online game (whether primarily skill-based, chance-based, or a hybrid) where players stake money with the prospect of winning financial rewards. This encompasses fantasy sports, rummy, poker, and similar formats.
The ban is comprehensive:
– Offering or facilitating online money games is prohibited.
– Advertising or promotional activities for such games are outlawed.
– Banks, payment processors, and financial intermediaries are barred from authorising transactions linked to online money gaming.
– Celebrity and influencer endorsements that promote these games are also criminalised.[4]
D. Penalties and Enforcement
The Act imposes stringent criminal penalties:
– Operators of money gaming services face up to three years’ imprisonment and/or fines up to ₹1 crore.
– Advertising violations carry up to two years’ imprisonment and/or fines up to ₹50 lakh.
– Repeat offenders may attract enhanced imprisonment terms and higher fines.
Moreover, offences under major provisions are cognizable and non-bailable, meaning enforcement agencies can investigate without a warrant and detain suspects without granting automatic bail. In addition to criminal sanctions, the Act empowers the government to block access to non-compliant platforms, seize evidence, and conduct searches both online and offline.
IV. Legal and Constitutional Implications
The PROG Act’s sweeping prohibition of online money gaming raises profound legal questions, especially in light of existing jurisprudence and constitutional doctrines.
A. Legislative Competence: Centre vs. States
One of the earliest legal challenges to the Act centres on legislative competence. Betting and gambling, especially involving wagering or stakes, traditionally fall under the State List (Entry 34) of the Seventh Schedule of the Indian Constitution.[5] Some commentators argue that the Act’s primary purpose (prohibiting and regulating online money gaming) intrudes upon state powers.
Under the pith and substance doctrine, legislation will be upheld if its true character falls within a subject matter on which the legislator is competent to legislate. The government’s justification frames the Act as encompassing consumer protection, public health, national security, and responsible gaming, which may touch upon Union powers. However, critics contend that public interest alone does not remedy a fundamental defect in legislative competence.
To date, several High Courts (including Karnataka, Madhya Pradesh, and Delhi) have entertained constitutional challenges alleging these very defects, with the Supreme Court transferring these matters for centralised adjudication. This signals that the judiciary will eventually adjudicate the Act’s validity.
B. Fundamental Rights and Economic Freedom
Real-money gaming operators have invoked Article 19(1)(g) of the Constitution (the right to practise any profession, trade, or business) to contest the blanket ban. Historically, Indian courts have recognised games of skill as distinct from gambling under the State of Andhra Pradesh v. K. Satyanarayana[6] line of cases, concluding that skill games cannot be restricted on the same basis as gambling. The current policy blurs the distinction by prohibiting all online money gaming regardless of skill.
A central constitutional question, therefore, is whether the Act’s prohibition can be justified as a reasonable restriction on Article 19(1)(g) under Article 19(6). Government proponents point to compelling State interests (protecting vulnerable users, curbing addiction, and preventing financial crimes) as necessary and proportionate. Opponents counter that a total ban is excessive and that targeted measures (such as licensing, age verification, responsible gaming standards, or taxation) could achieve similar objectives without eviscerating economic freedoms.
V. Judicial Position on Online Gaming and Games of Skill
Indian courts have developed a substantial body of jurisprudence on the skill-versus-chance distinction in gaming that directly bears on the PROG Act’s constitutional validity.
– In State of Andhra Pradesh v. K. Satyanarayana,[6] the Supreme Court held that the game of rummy is predominantly based on skill and therefore does not fall within the ambit of gambling laws.
– In Dr. K.R. Lakshmanan v. State of Tamil Nadu,[7] the Court recognised horse racing as a game of skill, extending constitutional protection under Article 19(1)(g) to such lawful commercial activities.
– The Madras High Court in Junglee Games India Pvt. Ltd. v. State of Tamil Nadu[8] invalidated a blanket ban on online skill-based games, observing that excessive prohibitions violate principles of proportionality and reasonable regulation.
VI. Industry Impact and Policy Shifts
The enactment of the PROG Act triggered immediate and far-reaching industry responses.
A. Operational Disruptions and Business Model Overhaul
Major platforms offering real-money contests (such as Dream11, Mobile Premier League, PokerBaazi, and Zupee) were effectively forced to suspend these offerings. Many pivoted to free-to-play models or alternative revenue structures that exclude money stakes. User wallet balances on these platforms are typically maintained for withdrawal, but companies ceased accepting new deposits linked to real-money games.[9]
B. Investment and Economic Consequences
The online money gaming segment had attracted billions in foreign and domestic investment. Analysts projected industry growth to be worth several billion dollars before the Act’s enactment. The prohibition threatens a dramatic decline in investor interest in India’s gaming sector, at least for real-money formats. Layoffs and business contractions quickly followed in several firms that relied heavily on real-money gaming revenues.
C. Advertising and Marketing Disruption
The exclusion of online money gaming from advertising channels has disrupted marketing ecosystems. Celebrity endorsements, previously a staple for gaming platforms, are now prosecutable if they promote banned offerings. Digital marketing agencies have had to recalibrate campaign strategies, moving away from previously popular keywords and audiences associated with paid gaming towards esports and casual gaming segments.
VII. Policy Rationale and Public Debate
The government’s stated policy rationales are multifaceted:
Consumer protection: Shielding youth and vulnerable populations from addictive and financial harms associated with real-money gaming.
Financial crime prevention: Curbing fraud, money laundering, and misuse of payment gateways.
Public health concerns: Recognising gaming addiction as a behavioural disorder meriting regulatory intervention.
Industry growth for non-monetary segments: Promoting esports, social games, and digital literacy.
However, critics argue the regulatory strategy may be overbroad, economically disruptive, and constitutionally vulnerable. Some have warned that outright prohibition could drive users toward offshore platforms that remain outside India’s legal reach, thereby undermining the law’s protective aims.
VIII. Looking Ahead: Implementation and Legal Challenges
The implementation phase hinges on the forthcoming Rules under the Act. Stakeholder consultations on draft rules indicate an intention to flesh out classification systems, compliance requirements, and appeals processes.
Constitutional challenges now before the Supreme Court will likely determine the Act’s long-term viability, especially regarding legislative competence and fundamental rights. The judiciary’s interpretation of the scope of Union authority to regulate online gaming will set broader precedents for digital economy governance in India.
IX. Conclusion
The Promotion and Regulation of Online Gaming Act, 2025 represents one of the most ambitious legal interventions in India’s digital entertainment sector. By combining prohibition, regulation, and promotion within a single statute, the Act breaks new legal ground. It aims to mitigate social harms, unify a fragmented regulatory landscape, and foster growth in esports and social games. Yet its sweeping ban on online money gaming raises profound legal challenges around federalism, constitutional freedoms, economic policy, and enforcement efficacy.
Over time, how courts, regulators, industry participants, and users respond to this Act will define India’s position at the crossroads of technology, law, and cultural change. Only sustained legal, policy, and judicial engagement will determine whether this statute becomes a model of digital governance or a cautionary tale in regulatory overreach.
References
[1] Public Gambling Act, No. 3 of 1867, Acts of Parliament, 1867 (India).
[2] The Promotion and Regulation of Online Gaming Act, 2025 (Act No. 32 of 2025).
[3] Ministry of Electronics and Information Technology, Draft Promotion and Regulation of Online Gaming Rules, 2025, Government of India (Aug. 2025).
[4] Online gaming bill: 5 apps banned in 2025 for promoting gambling activities, Times of India (Aug. 20, 2025), https://timesofindia.indiatimes.com/technology/tech-news/online-gaming-bill-5-apps-banned-in-2025-for-promoting-gambling-activities/articleshow/123518714.cms
[5] Constitution of India arts. 19(1)(g), 19(6), Seventh Schedule, List II, Entry 34.
[6] State of Andhra Pradesh v. K. Satyanarayana, A.I.R. 1968 S.C. 825 (India).
[7] Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226 (India).
[8] Junglee Games India Pvt. Ltd. v. State of Tamil Nadu, 2021 SCC OnLine Mad 2762 (India).
[9] India bans real-money gaming, threatening a $23 billion industry, TechCrunch (Aug. 20, 2025), https://techcrunch.com/2025/08/20/india-bans-real-money-gaming-threatening-a-23-billion-industry/
