India Moves to Outlaw Online Gaming with Sweeping Jail Terms
- Government proposes blanket ban on online gaming with jail terms up to 3 years.
- Bill empowers police to arrest without warrant for violations.
- Move threatens India’s Rs 20,000 crore gaming industry and 45 crore users.
The Union government has cleared a new draft law on online gaming that proposes a complete ban on money gaming platforms and gives sweeping powers to authorities to search and arrest without a warrant. The Promotion and Regulation of Online Gaming Bill, 2025, approved by the Union Cabinet on August 19, is expected to be introduced in Parliament on August 20.
The draft law states that any officer appointed by the Centre will be authorised to 'enter any place' and 'search and arrest without warrant any person who is reasonably suspected of having committed, committing or about to commit any offence' under the Act. The term 'any place' has been broadly defined to cover not only physical premises such as buildings and vehicles but also digital infrastructure like computer resources, servers, virtual digital spaces, electronic records, and electronic storage devices. It allows officers to override security codes or access controls to obtain data if required.
The bill prohibits the operation and advertisement of online money gaming services in India and prevents banks and financial institutions from facilitating transactions with such platforms. Offences under the proposed law are non-bailable, with heavy penalties and jail terms for violators. Offering or enabling online money games could attract imprisonment of up to three years and fines of up to Rs 1 crore. Those who advertise, promote, or sponsor such games could face up to two years in prison or fines of up to Rs 50 lakh. The bill also extends liability to payment intermediaries or others who process financial transactions for gaming platforms, with the same penalties as operators themselves.
The draft also places responsibility on company leadership. If a company is found guilty, its directors, managers, or officers could be held personally liable if the offences were committed with their knowledge, consent, or due to negligence. This clause seeks to ensure accountability at the highest levels of gaming companies operating in India.
According to the government, the legislation aims to curb the rising problems linked to online money gaming, such as addiction, financial distress, and criminal activity. Union IT Minister Ashwini Vaishnaw said that many platforms encourage compulsive and addictive behaviour, leading to financial ruin, mental health issues, fraud, and exploitation. At the same time, the bill seeks to differentiate between harmful money gaming and permissible formats such as e-sports, which it proposes to promote and regulate.
The online gaming industry has grown rapidly in India, employing more than 200,000 professionals and attracting nearly Rs 25,000 crore in foreign direct investment. However, industry experts warn that the proposed ban could have serious economic consequences. They estimate a potential revenue loss of Rs 20,000 crore in taxes if regulated platforms are forced to shut down. There are also fears that around 45 crore users might shift to illegal offshore platforms, exposing them to higher risks of fraud and lack of consumer safeguards.
In response, industry bodies have appealed to the government to reconsider. The All India Gaming Federation, the E-Gaming Federation, and the Federation of Indian Fantasy Sports jointly wrote to Union Home Minister Amit Shah, warning that the draft bill could deal a severe blow to the legitimate online gaming sector. They said the law, if passed in its current form, would undermine Prime Minister Narendra Modi’s vision of building a $1 trillion digital economy. They argued that instead of a blanket ban, a regulated framework could protect users while supporting innovation, jobs, and investments in the fast-growing sector.
The debate over the proposed legislation is expected to intensify as it comes before Parliament. While the government has emphasised the need to protect citizens from the risks of money gaming, industry stakeholders believe that the bill, in its present form, could stifle one of the country’s most dynamic digital industries.
