Edition 11: Thoughts on Centre's Online Gaming Bill
The Bill proposes to criminalise the provision, promotion and financing of online money games, essentially banning real money games in the country.
Even as India’s gaming industry reels from the shock of the Centre’s proposed criminalisation on the provision, advertisement and financing of online money games, one person might be quite happy with the Centre’s proposed bill meant to promote and regulate online gaming — former minister of state for IT, Rajeev Chandrasekhar.
When confusion swirled (and continues to swirl) around the 2023 gaming amendments to IT Rules, 2021, Chandrasekhar had continued to say two things: first, any online game that allows wagering is unlawful. Second, when it comes to online gaming, the Centre has control over regulation. Both these stances have been made abundantly clear in the proposed Promotion and Regulation of Online Gaming Bill, 2025, that is scheduled to be introduced in the Lok Sabha today by the minister of electronics and information technology Ashwini Vaishnaw.
The Tech Trace has reviewed a copy of the bill shared with parliamentarians late last night after it received the Cabinet’s nod in the afternoon.
In the Statement of Object and Reasons, the minister of electronics and information technology, Ashwini Vaishnaw, justified the decision to “completely prohibit” online money gaming over attempting to regulate it. The Bill states that the complete ban is “prudent”, “practical” and “in the interest of general public” given the “deleterious and negative impact of online money games on individuals, families, society and nation” and technical aspects which include the “electronic medium used”, “algorithms applies”, and the national and transnational networks involved.
Instead of summarising the bill, I want to comment on particular parts of the bill. All of my commentary of the bill is italicised.
Note: I am not relying on the 28-page undated and unsigned PDF titled “Draft Note for the Cabinet” that has been doing rounds since yesterday. I am not comparing the two versions either. Readers should bear in mind that there are multiple changes made to the final bill including those related to penalties/jail term for subsequent offences and addition of a clause giving the non-compliant parties the opportunity to be heard.
1. The details of the bill aren’t so unexpected
In some of its provisions, the bill is actually following the recommendations made by an inter-ministerial task force in its September 2022 report and by the committee of secretaries headed by the then cabinet secretary Rajiv Gauba in October 2022. These include: creation of a uniform law across the country; creation of a single regulatory body; non-inclusion of games of chance (online betting or gambling) within online gaming.
This task force had recommended that a subordinate legislation under Section 79 of the Information Technology Act should be considered as an “interim measure” while the government worked on full-fledged legislation on online gaming.
To be sure, even as an interim regulation, the 2023 amendments to the IT Rules 2021 were never enforced as MeitY never notified the self-regulatory organisations that were key to enacting the rules. In March 2025, MeitY told the Madras High Court that the rules were “unenforceable” because of this reason.
The task force had proposed the creation of a uniform law to deal with “inconsistencies” between different state laws and to unequivocally define what kinds of online gaming are legally allowed.
On the persistent issue of distinguishing between games of skill and games of chance, the task forced had recommended that the latter, which would include online betting and online gambling, should not be considered online gaming. However, it had insisted on distinguishing between the two so that allocation of powers and functions between the Centre and states could be better defined, especially for taxation purposes.
However, in the committee of secretaries, Tarun Kapoor, advisor to the prime minister, then revenue secretary Tarun Bajaj, and then I&B secretary Apurva Chandra had proposed that online gaming should be “considered as one activity/service” with no distinction made between “skill” and “chance” as is “the global practice”.
For online money games, the proposed bill does not distinguish between the two.
2. National security: Centre’s reason for regulatory control over online gaming
Central to the regulation of online gaming in general, and real-money online gaming in particular, has been the confusion over whether online gaming is to be regulated by the Centre given that it is online and thus part of the Union List of the Seventh Schedule, or the states since “betting and gambling” are a state subject as per the Seventh Schedule.
Given the disparate and at times contradictory state laws on online gaming, a unified law on online gaming has been a longtime ask. In June 2022, in its consultation with the inter-ministerial task force, the gaming industry had asked for a central legislation on online gaming. According to the task force’s report, this was supported by 13 states and union territories that had also participated in a consultation.
The Law Commission of India and Niti Aayog have also supported a central law.
The Law Commission had recommended a central law in July 2018 in its report titled Legal Framework: Gambling and Sports Betting including in Cricket in India. The report argued that Parliament had the remit to enact laws related to online betting and gambling because they take place over the internet, and entry 31 of the Constitution’s union list covers telephones, wireless, broadcasting and other similar forms of communication.
Similarly, in December 2020, Niti Aayog had released a draft report for public discussion on the regulation of online fantasy sports. After consultation, the government’s think tank had proposed creating a “uniform national level safe harbour framework” for fantasy sports that would also specify how to determine which of these games were games of skill.
But instead of centralised regulation, Niti Aayog had proposed that the central government recognise a single self-regulatory organisation for fantasy sports.
But in the proposed bill itself, the Centre has given different reasons for “assuming control” over the gaming industry — national security.
In its “Statement of Object and Reasons” (SOR), MeitY has cited the impact of OMGs on “security and sovereignty of the State” through money laundering, financial fraud, terror financing, and use as messaging platform for terrorist and terrorist organisations.
In the preamble and the SOR, MeitY said that OMG service providers, by “operating from offshore locations”, often “circumvent state-specific regulations”, “undermine state-level regulations”, “evade taxation, and create enforcement challenges pertaining to extra-territorial concerns for domestic authorities and has raised complex challenges with respect to user safety, consumer protection, cross-border operations, and inter-State regulatory inconsistencies”.
MeitY said that to promote the online gaming sector on the one hand, and to address “increasing social, financial, and regulatory risks posed to the interest of the general public by the online money gaming sector”, “it is expedient in the public interest for the Union Government to assume control over this emerging industry”. The Centre cited consumer protection, consumer safety, public morality, public health, public order, financial sovereignty and national security for assuming this control.
3. What all is actually covered?
The terms online game and its three mutually exclusive subsets — online money game (which can now be appropriately abbreviated as OMG), online social game (OSG) and e-sports — can best be summarised this way:
Here are the definitions and my thoughts (in italics) on those:
‘online game’
It is fairly expansive and seems to cover everything. To nitpick, is Chrome’s Dinosaur Game, which only works in offline mode, that is, no internet, an ‘online game’? If I play Nintendo games through the cartridge without connecting to the internet, or play games on the intranet instead of the public internet, is that covered?
‘e-sport’
Key points to note here:
It needs to be recognised under Section 3 of the National Sports Governance Act, 2025. Under NSGA, only the Centre can notify a “sport discipline” as a “designated sport” either for a specific state or for the whole country. For each “designated sport”, there is a National Sports Federation or a Regional Sports Federation. So first, the Centre will notify an e-sport as a “designated sport” which will then have a related national or regional sports federation which will then recognise the said e-sport. There is a tautology here somewhere. Or the e-sport could be governed by the National Olympic Committee or the National paralympic Committee, if that’s possible.
This e-sport will then need to be registered with the new Authority created/designated by the Centre.
No wagering.
‘online social game’
‘online money game’
and the related ‘other stakes’
Given the definition of e-sport and OMG, it is not clear where fantasy sports will fall.
4. What is criminalised?
1. Provision of OMGs (clause 5)
“No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service.
Made illegal (clause 9(1)): “Any person who offers online money gaming service in contravention of section 5 shall be punished with imprisonment for a term which may extend to three years or with fine which may extend to one crore rupees or with both.”
It is clear that even app stores cannot list OMGs or OMG services. Will app stores or other such aggregators require game publishers to show proof of registration, etc. with the OGA/agency?
Clause 9(1) makes it clear that only the person “offering” the OMG service will be in contravention of the act, not the user/player.
Could OMGs that have been declared legal by different courts now be reassessed by the OGA?
2. Advertisement of OMGs (clause 6)
“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, 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.”
Made illegal (clause 9(2)): “Any person who makes or causes to make advertisement in any media, in contravention of section 6, shall be punished with imprisonment for a term which may extend to two years or with fine which may extend to fifty lakh rupees or with both.”
It is clear that all advertising, including surrogate advertising (“indirectly promotes”) is a criminal offence for the ad agency, the celebrity ambassador, a random nano-influencer, outdoor ad space provider, etc.
It is unclear if algorithmic display of OMG ads on platforms such as Facebook and Google constitutes “making or causing to make advertisement in any media” and what their responsibility or liability will be. In case of sponsored posts and videos on YouTube and Instagram, Clauses 5 and 9(1) will kick in and I assume that platforms could be directed via Section 69A (through clause 14) to block such posts. Newspapers cannot advertise OMGs, even indirectly.
It is not clear if Dream11 is considered an OMG service. If it is, can it continue to sponsor the Indian cricket team? If the Authority decides that Dream11 is an OMG service, will old hoardings constitute violation of the law?
It is also clear that surrogate advertising on news websites by offshore gambling sites has been categorically outlawed. Such ads and advertorials were a subject of an October 2022 MIB advisory. If such an ad is indeed displayed, say on a Financial Express web page, either programmatically as a Google ad — thus not in FE’s control —, or as an inline promotion — thus under FE’s control —, or as an advertorial, what is FE’s liability in each case?
What happens to video archives that show sponsorships from Indian or offshore OMG services?
3. Financing of OMGs (clause 7)
“No bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce or otherwise facilitate any transaction or authorisation of funds towards payment for any online money gaming service.”
Made illegal (clause 9(3)): “Any person who engages in any transaction or authorisation of funds in contravention of section 7 shall be punished with imprisonment for a term which may extend to three years or with fine which may extend to one crore rupees or with both.”
What happens if the same platform is providing OMGs and paid OSGs? How will authorities distinguish between payments made?
Provision of OMGs and financing of OMGs have been made “cognizable and non-bailable” offences, allowing state police departments to act.
*No mention of IT Rules, no intermediary, publisher distinction
Nowhere does the Bill talk about repealing the 2023 gaming amendments to IT Rules, 2021. OMGs and OSGs are just games. The bill has not gone into the publisher v intermediary binary at all.
5. Self-regulatory bodies absent; regulation via Centre
Unlike the 2023 amendments to IT Rules which relied extensively on self-regulatory bodies for operationalising the rules, the bill keeps all regulatory power either with the Centre or with the new Online Gaming Authority (OGA) that the Centre may create or an existing agency that may be designated for this purpose.
The Centre is empowered to potentially require recognition and registration of e-sports with the OGA/agency, and recognition, categorisation and registration of OSGs with the OGA/agency.
This OGA/agency can suo moto decide to assess whether an online game is an OMG. Any person can also ask this OGA/agency to make this assessment. How this OGA/agency will recognise, categorise and register online games, and what powers it will have have been delegated to subordinate legislation.
Any person offering, organising, or facilitating any online game must comply with “directions, orders, guidelines or codes of practice” issued by the Centre or the OGA/agency. Non compliance could lead to penalty of upto ₹ 10 lakh or suspension/cancellation of registration, and prohibition from offering, facilitating or promoting such games for a period determined by the Centre/OGA. However, this penalty can only be imposed after giving an opportunity to be heard.
Given that this bill applies to all OMG services offered within India, irrespective of whether they operate from within India or not, implementation of the non-compliance clause might be difficult. On that point, the scope of the act does not specify if it also applies to online games (OSGs and e-sports) that operate from outside India.
This OGA/agency could also respond to complaints related to online games that affect user interests. In a departure from MeitY, DoT and other allied ministries’s practice of setting up a plethora of digital portals as the only media for grievance redressal, complaints here can also be sent in writing.
So much power with the Centre!
As per Clause 13, everybody has to comply with “any” direction issued by the Centre related to OMG services. The scope of these directions have not been specified.
Clause 14 states that “notwithstanding” anything in this act or in Section 69A of the Information Technology Act, any information related to OMG services can be blocked for providing, advertising or financing OMGs through Section 69A blocking process.
On the one hand, it seems like an expansion of Section 69A grounds beyond the six grounds related to national security and public order to include provision, promotion and financing of OMGs. However, in this bill, the Centre has wrested legislative power over the subject by arguing national security so an argument can be made that any provision, promotion and financing of OMGs is a national security threat. I personally think such a reading would be a massive dilution of gravity of reasons associated with Section 69A blocking.
Through clause 15, the Centre, through a gazette notification, can empower any central, state or OGA officer with investigation powers for offences related to this act. These officers can “enter” any physical or digital space, and “search and arrest without warrant any person found therein who is reasonably suspected of having committed or of committing or of being about to commit any offence under this Act”.
This explanation suffers from the same kind of overreach as the new Income Tax Act, essentially empowering any government official to seek access to any online account or physical space. I cannot possibly overstate how overbroad this provision is and how it could potentially be abused.
“The End”