Online Gaming Bill 2025: Why Govt seeks ban on real-money games, GST loss & jobs at risk

New Delhi: The Union government has tabled the Promotion and Regulation of Online Gaming Bill, 2025, which seeks to ban all real-money games (RMG) in India. If passed, the law could shut down a sector employing over two lakh people, drawing ₹25,000 crore in foreign investment, and contributing nearly ₹20,000 crore annually in GST.

Officials say the draft law is needed to curb rising cases of addiction, financial loss, and misuse of money through betting apps. But industry leaders warn the move could backfire, pushing lakhs of players to unsafe offshore platforms where the government has no oversight.

Online RMG platforms let players stake money on games with the chance to win cash rewards. This covers fantasy sports, card games, rummy apps, and even skill-based titles if they involve cash entry fees. The Bill treats both "games of skill” and "games of chance” the same, banning them under a single definition of online money games.

Banks and payment providers will be prohibited from processing these transactions. In effect, if the law is passed, Dream11, My11Circle, WinZO, Games24x7, Junglee Games, and more than 400 others will be forced to shut down operations.

No. Esports is not part of the crackdown. Competitive gaming titles like BGMI, PUBG, Call of Duty, and League of Legends are classified separately and even encouraged under the draft law. A new authority will be tasked with promoting esports and social gaming, where players spend on ads or in-app items but do not win money.

Officials cite addiction among children and youth, mental health concerns, and rising frauds tied to betting apps. Tamil Nadu and a few other states have already tried to ban such platforms, setting the stage for this national law.

Between 2022 and February 2025, more than 1,400 gambling websites and apps were blocked in India. The Centre now wants a uniform policy instead of leaving it to state-level regulation.

The ban would directly affect:

Collectively, the industry employs over 200,000 people in IT, gaming, design, and AI roles. It also contributes heavily to the exchequer. Karnataka IT Minister Priyank Kharge said, "India earns ₹20,000 crore annually from GST and income tax via online RMG. The ban means states lose this revenue stream.”

Industry bodies like the All India Gaming Federation (AIGF), Federation of Indian Fantasy Sports (FIFS), and E-Gaming Federation (EGF) have warned that a blanket ban will shut firms and send players to unsafe offshore apps worth ₹8.2 lakh crore annually. These offshore sites pay no tax and are prone to money laundering and fraud.

Akshat Rathee, Co-founder of NODWIN Gaming, welcomed the Bill’s clarity on esports but flagged the lack of clear definitions. "The absence of precise definitions has often led to ambiguity and conflation around the term esports. Such overlaps can create confusion not just for regulators, but also for players, teams, investors, and organizers,” he said.

Esports veteran Animesh "Thug” Agarwal of S8UL was more optimistic. "This bill marks a historic turning point for Indian esports. By drawing a clear line between skill-based competitive gaming and betting, it safeguards the integrity of our ecosystem while opening doors for structured growth.”

Since October 2023, RMG platforms have been paying 28% GST on deposits, plus a 30% tax on winnings. Now, the government is reportedly weighing an increase to 40%, equating RMG with tobacco and alcohol.

Interestingly, the Bill distinguishes between esports, social gaming, and money games. But GST laws still treat them the same, creating uncertainty about whether tax reforms will follow.

The Bill will be debated in Parliament this week. The industry hopes the government will consider regulation over prohibition. Kharge summed it up bluntly: "A well-balanced regulation will ensure jobs, revenue, safer users, national security and global innovation… a blanket ban will not only lead to revenue loss, but will give rise to illegal markets.”