Online Gaming Bill 2025: How Will Ban On Real-Money Games Impact? New Rules & More

In a major development, the Lok Sabha Parliament has passed the Promotion and Regulation of Online Gaming Bill, 2025, that seeks to prohibit real online money games and promote and regulate certain other online games. This move has led to mass selling in gaming stocks such as Nazara Technologies and Delta Corp. Popular online games like Rummy, Poker, Dream11, Winzo and more are expected to take a huge hit. Gamers and celebrities, too, will face the heat.

The main agenda is to regulate and prohibit illegal transactions or misuse through these online money games.

"This bill seeks to ban "online money gaming", which is the "depositing of money" for "winning money or other stakes". This impacts games such as rummy, poker, etc., where winning money is possible," said Vikram Jeet Singh, Partner at BTG Advaya to GoodReturns.

Impact Of New Rules In Online Money Games:

The new bill prohibits any person from offering, aiding, betting, inducing or otherwise indulging or engaging in the offering of online money game and online money gaming services.

Additionally, the bill prohibits any person to make, cause to be made, aid, abet, induce, or otherwise be involved in the making or causing to be made any advertisement, in any media including electronic means of communication, which directly or indirectly promotes or induces any person to play any online money game or indulge in any activity promoting online money gaming.

These decisions impact both online gaming companies and celebrities or influencers who have promoted online games over time.

Online money games are referred as online games irrespective of whether based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning, which entails monetary and other enrichment in return for money or other stakes.

Meanwhile, online gaming services are services offered by individuals for entering or playing the online money game.

Also, the bill prohibits banks and financial institutions from enabling transactions or authorising the infusion of funds into online money gaming services.

"The Promotion and Regulation of Online Gaming Bill 2025 is a watershed movement for the flourishing digital gaming sector of India, engaging more than 500 million users and growing rapidly with a CAGR of 20%. It focuses on player-centric protection and responsible gaming, the very factors that build the ecosystem on a trust basis," said Kunal Gala, Partner, Deal Value Creation, BDO India.

The expert believes an outright ban could lead to loss of revenue and even push users to unregulated markets.

He added, "An outright ban on real-money games, however, could push users towards unregulated markets, resulting in the loss of revenue for legitimate establishments and the government."

"A structured approach that distinguishes skill-based games, eSports, and gambling with strength-based safeguards may complement the intent of the Bill, enabling responsible sectoral growth while also creating the regulatory clarity that underpins investor confidence, valuation stability, and potential M&A-led consolidation as the industry matures," Gala told GoodReturns.

Where Is Online Gaming Now In India?

For instance, as per a report by gaming-focused venture capital firm Lumikai, India's gaming market grew 23% YoY to $ 3.8 billion in revenue in 2023-24 (FY24), despite the 28% GST imposed on online gaming.

Further, the report explained that RMG firms added US$400 million in FY24, absorbing much of the GST burden. However, smaller players face working capital challenges, with gross margins down 30% and payback periods nearly doubling. The gaming sector now represents 30% of the broader US$12.5 billion new media market, with 590 million gamers in FY24, including 25% who spent money on games. Notably, 44% of gamers are women, and 66% are from non-metro cities, with a significant portion in the 18-30 age group exhibiting a high willingness to spend on gaming.

The online gaming market is expected to exceed US$9.2 billion by FY29, growing at a five-year compound annual growth rate (CAGR) of 20%. Real-money gaming (RMG) remains the largest revenue driver, contributing US$2.4 billion, as per the Lumikai report.

On August 15, WinZO & IEIC Report also predicted that the sector is expected to grow at a CAGR of 19.6% (FY 2024-29) and is set to touch a USD 9.1 billion market size by 2029E.

According to WinZo's report, the robust foundation of India's digital economy, coupled with the booming game developer ecosystem and conducive regulatory regime, will help the sector achieve a USD 60 billion market size by 2034, with second-order effects including the creation of over 2 million jobs, increased FDI, and export of Indian IP. They will also expand India's current gaming user base to one of the largest in the world, to 952 million by 2029E.

The central government may constitute an Authority with powers to: (i) determine whether an online game qualifies as an online money game, and (ii) recognise, categorise, and register online games. The government will prescribe the composition, terms and conditions for appointments to the Authority. It may also designate any existing authorities with these powers, cited in the bill and reported by PRS India.

Furthermore, the bill empowers regulators and officers to enter and search any place without a warrant. These include buildings, vehicles, electronic records, and virtual digital spaces (such as emails and social media).

Why Is Govt Prohibiting Real-Money Online Games?

One reason that has been suggested for this ban is the alleged use of RMG for money laundering activities. India's online gaming market is valued at almost USD 4 billion, which will take a hit following this - banning RMG may also have an impact on people employed in the gaming sector. Gaming companies have been subject to a 28% GST levy in the past. But the bill indicates a move from regulating to banning, when it comes to RMG, as per Singh.