Govt’s gaming crackdown: Sweeping ban on real-money play, jail for promoters, warrantless searches

India is set to deliver a body blow to its booming online gaming industry with a draft law that bans real-money play, punishes celebrity promoters, and even empowers officials to search and arrest without a warrant.

The Promotion and Regulation of Online Gaming Bill, 2025 — circulated to MPs late August 19 and expected to be tabled in Parliament on August 20 — marks a dramatic shift from just two years ago, when the IT Ministry’s rules were seen as encouraging the sector. The new Bill, drafted by the IT Ministry with inputs from the Home Ministry, frames online money gaming as a national security risk, citing links to money laundering, terror financing, and tax evasion.

Officials admit the move could cost the exchequer thousands of crores in GST revenues, but insist it is a “calculated decision in the larger public interest.”

Death knell for a $9 billion industry

If passed in its current form, the Bill could dismantle an industry projected to be worth $9 billion by 2029. Already reeling from a 28% GST burden—one that generated over ₹6,900 crore in revenue within just six months of implementation—the sector also supports over two lakh jobs and has attracted foreign investment exceeding ₹25,000 crore.

The draft law, however, leaves little room for manoeuvre: offering or operating online money games could invite up to three years in prison and a fine of ₹1 crore. Influencers and celebrities endorsing such platforms face two years in jail and penalties up to ₹50 lakh. Banks and payment gateways will be barred from facilitating transactions for these services.

No distinction between skill and chance

In a major setback to long-standing industry lobbying, the Bill makes no distinction between “games of skill” and “games of chance”—a classification that companies like Dream11, MPL and Winzo have leaned on to justify their operations. All forms of real-money gaming, from fantasy sports to rummy and poker, are clubbed under one expansive definition of “online money game.”

The only carve-outs are for e-sports and game development, which the government says it will actively promote as legitimate and competitive industries. A new central authority is proposed to regulate and foster this segment.

Powers without warrants

Among the Bill’s most contentious provisions is one that allows authorised officers to enter physical premises or digital platforms, override security codes, and seize records or devices—all without a warrant. The draft mirrors sweeping search powers proposed in the government’s new Income Tax law.

Rising backlash

Industry associations, including the E-Gaming Federation and Federation of Indian Fantasy Sports, have warned that a blanket ban would “strike a death knell” for a legitimate, tax-paying, job-creating sector while pushing players toward unregulated markets and the dark web.

Congress MP Karti Chidambaram has criticized the move as hasty and demanded that it be sent to a parliamentary select committee.

But the government insists the law is necessary. The draft preamble bluntly states that real-money gaming has unleashed “serious social, financial, psychological and public health harms,” particularly among young and economically vulnerable groups, with manipulative designs and addictive algorithms driving “financial ruin.”

With the Bill now heading for Parliament, India’s gaming sector faces its moment of reckoning: either reinvent itself around e-sports and game development — or watch a multibillion-dollar industry shut down overnight.