Online Gaming Act 2025

The new online gaming act 2025 is aimed at banning harmful money games while promoting e-sports and safe digital recreation. Read here to learn more.

India’s digital economy is one of the fastest-growing in the world, and the online gaming industry has emerged as a key contributor.

Yet, alongside its potential for innovation, skill development, and employment, the sector has also brought serious social and economic risks, particularly through online money gaming platforms.

Recognising this duality, the Government passed the Promotion and Regulation of Online Gaming Bill, 2025, on August 21, 2025.

Online Gaming Act 2025: Key Features

1. Regulatory Authority
   • Establishes the National Online Gaming Authority (NOGA) under the Ministry of Electronics & IT.
   • NOGA will register and regulate online gaming platforms, frame standards for responsible gaming, and ensure consumer protection.
2. Classification of Games
   • E-Sports: Competitive, skill-based digital gaming with no monetary stakes. Treated as a legitimate sporting activity.
   • Social/ Casual Gaming: Recreational, entertainment-based games without betting or wagering.
   • Online Real Money Games (RMGs): Games where players stake money for the chance of winning real monetary rewards. This category faces the strictest regulation.
3. Prohibition of Harmful Games
   • Games involving wagering, betting, or chance-dominant outcomes are deemed “prohibited online games.”
   • Addiction-inducing design features (dark patterns, manipulative reward loops) may also be restricted.
4. Mandatory KYC & Age Verification
   • Platforms must conduct Aadhaar-based KYC for players.
   • Persons under 18 years cannot participate in RMGs.
5. Advertising Restrictions
   • Online RMG ads must carry addiction warnings (similar to tobacco disclaimers).
   • Misleading claims like “easy money” or “assured winnings” are prohibited.

Penalties under the Act

1. For Players
   • Engaging with prohibited online money games: Fine up to ₹25,000 (first offence).
   • Repeat offence: Imprisonment up to 6 months or fine up to ₹50,000, or both.
2. For Platforms/Operators
   • Running or advertising unlicensed/prohibited games: Imprisonment up to 3 years and a fine of up to ₹10 crore.
   • Failure to conduct due diligence (KYC, addiction safeguards): Suspension/cancellation of license + monetary penalties.
3. Taxation
   • Mandatory deduction of TDS on winnings above ₹100.
   • 28% GST continues to apply on RMG entry amounts (as per GST Council decision in 2023).

Why the Online Gaming Act Was Needed

The growth of online money games, where financial stakes are involved, has had devastating consequences:

• Addiction & Financial Ruin: Players often lose entire savings chasing illusory profits. According to government estimates, 45 crore Indians have been negatively affected, with losses exceeding ₹20,000 crore.
• Mental Health Crisis: Cases of depression and suicides linked to money gaming losses have been reported.
• Fraud & Money Laundering: Platforms have been misused for illegal activities, including terror financing.
• Legal Gaps: While offline gambling is already prohibited under the Bharatiya Nyaya Sanhita (2023) and various state laws, the online domain lacks clear regulation.

What has the World Health Organization (WHO) said about Real Money Games?

• • Real money games pose a high risk of behavioural addiction, leading to financial distress, debt cycles, and mental health issues, especially among youth.
  • WHO classified “gaming disorder” as a mental health condition in ICD-11, especially where real money stakes are involved.
  • Countries are advised to regulate RMGs with strict age limits, spending caps, and advertising restrictions.

E-sports vs social gaming vs online money games

Judicial Developments on Online Gaming

• Supreme Court Interventions
  • The SC has upheld states’ powers to regulate or ban betting/gambling under Entry 34, List II (State List).
  • However, with online RMGs crossing state boundaries, the SC in 2024 clubbed multiple petitions and noted the need for a uniform central law.
  • It directed the Centre to bring clarity on what constitutes “skill vs chance” games. The new Act is a response to this judicial nudge.
• Skill vs Chance Debate
  • SC in earlier cases (K.R. Lakshmanan v. State of Tamil Nadu, 1996) held that games of skill (like rummy, chess, fantasy sports) are distinct from gambling.
  • The Act codifies this distinction, protecting e-sports and skill-based social games, while subjecting RMGs to stringent regulation.

Other Related Measures by the Government

The Act builds on existing laws and initiatives:

• IT Act, 2000 & IT Rules (2021, amended 2023): Blocking illegal websites; requiring registration of intermediaries.
• Bharatiya Nyaya Sanhita, 2023: Sections 111 & 112 penalise unlawful economic activities, betting, and gambling.
• GST Framework: Offshore gaming platforms brought under Simplified Registration Scheme.
• Consumer Protection Act, 2019: Ban on misleading advertisements and influencer endorsements.
• Advisories: Ministries of I&B and Education issued warnings and safe gaming guidelines.
• Cybercrime Reporting: Dedicated portal (cybercrime.gov.in) and helpline (1930).

Promotion and Regulation of Online Gaming (PROG) Rules, 2026

The Promotion and Regulation of Online Gaming (PROG) Rules, 2026, establish a comprehensive regulatory framework for India’s rapidly expanding online gaming sector. The Rules aim to balance consumer protection, financial integrity, and industry growth, while promoting safe digital gaming and e-sports.

Objectives of the PROG Rules, 2026:

• Protect users, especially children and vulnerable groups, from addiction and financial harm
• Prevent illegal activities such as money laundering and fraud
• Promote responsible gaming practices
• Provide regulatory clarity to the gaming industry
• Strengthen coordination among regulators, financial institutions, and law enforcement

Key Provisions:

1. Establishment of Online Gaming Authority of India (OGAI)

• Set up as an attached office under the Ministry of Electronics and Information Technology (MeitY)
• Headquarters: New Delhi
• Chaired by Additional Secretary, MeitY

Composition:

Representatives (Joint Secretary level) from:

• Home Affairs
• Finance
• Information & Broadcasting
• Youth Affairs & Sports
• Law & Justice

Functions:

• Maintain a public list of banned online money games
• Issue codes of practice
• Adjudicate user complaints
• Undertake targeted enforcement actions

2. Determination of Online Money Games

• A classification mechanism to identify whether a game is an “online money game”
• Initiated by:
  • OGAI
  • Service providers
  • Government

Criteria:

• Stakes involved
• Nature of rewards
• Monetisation model

Timeline:

• Determination to be completed within 90 days
• Final decision issued as a determination order

3. Registration Framework for Online Games

• Selective registration system (not blanket regulation)

Mandatory Registration for:

• Games seeking recognition as e-sports
• Certain social games notified by the government

Validity: Registration certificate valid up to 10 years

Key Restriction: Online money games cannot be classified as e-sports

4. User Safety and Responsible Gaming Measures

Mandatory safeguards include:

• Age verification mechanisms
• Time limits on gameplay
• Parental controls
• Self-exclusion options
• Reporting and grievance tools
• Counselling support for addiction
• Fair-play monitoring systems

Service providers must disclose these features transparently

5. Grievance Redressal Mechanism

Three-Tier System

1. Service Provider Level
2. Appeal to OGAI
3. Final Appeal to Secretary, MeitY

• Each stage must be resolved within 30 days

6. Penalties and Enforcement

• Enforcement proceedings conducted digitally
• Timeline: 90 days for resolution

Penalty Criteria:

• Severity of violation
• Financial loss to users
• Repeated non-compliance
• Financial gains from the violation

Way Forward

The Online Gaming Act 2025 is not the end but the beginning of a more structured approach to India’s digital future.

• A clear insurance and compensation framework may be needed to cover unforeseen risks in e-sports and legitimate gaming.
• Strong international cooperation will be required to regulate offshore platforms.
• Ongoing awareness campaigns can help parents, schools, and communities guide safe digital habits.

By ensuring technology serves people and not the other way around, the Act aligns with India’s larger Digital India and Viksit Bharat 2047 vision.

Conclusion

The new Online Gaming Act 2025 creates a three-tiered regulatory framework distinguishing e-sports, social gaming, and RMGs, aligning with WHO warnings on addiction. It introduces strict penalties, mandatory KYC, and advertising restrictions for RMGs while promoting legitimate gaming and e-sports.