India may be moving closer to a federal framework on gambling, ending decades of regulatory fragmentation across its 36 states and territories – but this is far from the creation of a nationwide legal gambling market.

The Lok Sabha, the Lower House of India’s Parliament, has received the “Promotion and Regulation of Online Gaming Bill, 2025,” to enact new legal determinations and remits on Real Money Games (RMG).

The Bill was authorised by the Union Cabinet yesterday and presented to the Lok Sabha as containing articles to “regulate, promote, and develop India’s online gaming sector, including e-sports, educational, and social games”.

Gov determined to ban RMG

The government’s proposed legislation will have far reaching consequences. It includes new legal determinations that prohibit the promotion of real money games due to negative societal impacts.

This definition covers all forms of online betting and gaming including fantasy sports and games like poker, rummy and lotteries – essentially proposing a federal ban on most forms of online gaming, although there is no fixed definition of sports betting.

The Bill classifies RMG distinctly to other online game types as “irrespective of whether such game is 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 of money or other stakes”.

A notable exception has been made for e-sports, however, which the government seems to want to encourage, with India home to a growing grassroots esports community. 

The bill classes esports as a sporting and competitive activity, instead taking aim at games which players pay to participate in and could win a cash prize from i.e. online gaming and lotteries.

Determinations on prohibiting RMG platforms and services detailed: “The unchecked and widespread proliferation of online money games which [are] readily accessible through mobile devices, computers, and the internet, and offering monetary returns in exchange for deposited funds has led to grave social, economic, and psychological consequences across the country. 

“These platforms often promote compulsive and addictive behaviour, resulting in financial ruin, mental health disorders, and increasing incidents of fraud and exploitation.”

The Bill expands the central government’s scope and authority to enforce rules and exercise oversight over real money gaming platforms and publishers across India, including those operating outside of national boundaries.

New sheriff in town

The bill envisions that India’s central government will have the powers to designate any existing state body to assist with the implementation of the rulebook, or establish a new one altogether – consisting of a Chairperson and selected cabinet members.

Appointments, disqualifications, staff salaries, and the body’s handling of complaints related to online games, among others, will be advised by the central government.

Under the new rules, every person or company offering, organising, or facilitating online games shall apply for a licence, which the new regulator will either approve or reject based on whether offers are classed as online money games or otherwise.

Clamping down further on online money games, the new draft legislation outlines that no person shall “make, cause to be made, aid, abet, induce, or otherwise be involved in the making or causing to be made any advertisement”. 

This includes marketing across any media communication channel that can be used to directly or indirectly promote or induce people to engage with online money games in any way, shape or form.

Banks, financial institutions, fintechs, and the wider payments industry in general will also be barred from facilitating or authorising any transaction relating to online money gaming services.

New rules, new penalties

The new legal determinations through Sections  5, 6, and 7, explicitly prohibit real money games (referred to as “online money games”), which can no longer be facilitated, advertised, or supported through financial services.

As anticipated by the media, promoting or facilitating real money gaming (RMG) platforms will be a criminal offence. First-time violations may result in up to 3 years in prison or ₹1 crore (€110,000) in fines. Repeat offenders face at least 3 years in jail and fines up to ₹2 crore (€220,000). 

Advertising RMG platforms can lead to two years in prison or ₹50 lakh (€55,000), increasing to three years and ₹1 crore (€110,000) for repeated breaches. Even processing payments for such services — by banks or financial firms — will attract the same penalties.

An end to fragmentation at least?

The bill has the potential to be a double edged sword. On the one hand, a federal ban on various types of RMG stands to cripple the Indian gaming market and industry – which has already been feeling the pressure lately.

Back in 2023, Prime Minister Narendra Modi’s government hiked taxes on gambling via the Goods and Services Tax (GST) regime. The rate was increased from 18% to 28%.

The following years saw companies like bet365 and Super Group bail on the country, partly citing tax burdens. This week, it was reported that the taxes could jump again, this time to 40%, leading to shares falling across several companies.

This summer, the Supreme Court said it would examine the legal boundaries of RMG and other formats in consultation with tech giants Google and Apple.

The move follows a string of high-profile cases involving celebrities, athletes and Bollywood stars promoting Real Money and Skill Games – a sector which lacks a uniform legal framework to define regulatory powers.

On the bright side, the bill will not impede on the existing state markets of Goa, Daman, and Sikkim, or the prospective market for games of skill in Karnataka, with states retaining autonomy on whether they want to launch a local market or not.

There could be further prospects in the federal changes further down the line, despite the extensive restrictions. The creation of a national regulator is a first for India, and should the government’s position relax over the years this authority could end up overseeing one of the world’s largest gambling markets – though this is a big maybe.

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