Real-money gaming companies in India are facing a major crisis as the government moves to propose a blanket ban on their operations through new legislation. The Indian government plans to prohibit all real-money games, whether based on skill or chance, under its proposed online gaming regulation. A draft of the legislation, verified by multiple sources, reveals these intentions.
The proposed law, to be called The Promotion and Regulation of Online Gaming Act, 2025, would restrict online games involving real-money stakes. It would also outlaw both advertisements for these games and the financial transactions that support them. The draft explicitly states that no bank or financial institution shall permit or facilitate any payment for any online money gaming service.
This sector has been the largest revenue driver for India’s online gaming industry, which generated $3.8 billion in revenue in the 2023-24 financial year, marking a 23% annual increase. Real-money gaming alone accounted for $2.4 billion of that total. Despite its economic significance, the sector has come under growing scrutiny due to public concerns over harm, including tragic incidents where individuals reportedly died by suicide after losing large sums of money.
Industry stakeholders largely attribute these negative incidents to offshore betting and gambling apps, which they claim continue to operate and expand despite repeated enforcement actions by authorities, such as website blocks and account freezes. The government had previously imposed a 28% tax on online gaming in 2023 to curb real-money play, a move the industry labeled as catastrophic and unconstitutional. Top investors warned of massive financial write-offs and job losses, but the tax was implemented. Recent reports suggest this tax could potentially rise to 40% under new rules.
The draft legislation outlines severe penalties for non-compliance. Real-money gaming companies could face imprisonment for up to three years, a fine of up to approximately $115,000, or both. Celebrities promoting such games could be liable for up to two years of imprisonment or a fine of around $57,000. The bill also empowers the government to establish a new regulatory authority to oversee its implementation.
Founders and investors are deeply concerned. One founder of a leading Indian real-money gaming startup stated that businesses will shut down if the legislation comes into force. An investor noted that all unicorns in this sector would be significantly impacted. Major companies like Dream Sports, Games24x7, and WinZO, which have raised billions of dollars and generate significant revenue from millions of users, are at risk. India currently has the highest number of real-money gaming startups globally, followed by the U.S. and the UK.
For many of these companies, real-money gaming accounts for over 85% of their total revenue. Some startups have explored moving operations outside India to sustain their business amid these regulatory challenges, but these efforts have not yet been fruitful as they currently generate almost all of their revenue from within India.
This is not the first attempt by the government to regulate the sector. In 2023, it amended IT rules to curb user harm, proposing the creation of self-regulatory bodies. However, that model faltered due to conflicts among industry stakeholders over enforcement and standards. Local reports suggest India’s Cabinet has cleared the latest proposed bill for introduction in parliament, though the government has not officially confirmed this development.