India’s online gaming industry is facing widespread disruption after a new federal law imposed a blanket ban on all real-money games, a move a legal expert says has halted a major driver of the country’s digital economy.
The Promotion and Regulation of Online Gaming Act, 2025 (PROGA) prohibits “online money games” regardless of whether they involve skill or chance. The measure has triggered an “abrupt cessation of all online real-money gaming (RMG) operations”, said Ranjana Adhikari, a partner at Shardul Amarchand Mangaldas who specializes in technology and gaming law.
RMG accounted for about 80 percent of sector revenues, according to industry estimates. “The skill-based RMG vertical not only attracted investments but also created jobs, generated substantial tax revenues, and nurtured entrepreneurs”, Adhikari told AGB. She said leading operators had already shut down India operations and were considering shifts to foreign markets or new business lines.
The government has promoted Esports and educational titles as alternatives, but industry players warn the transition will take time. PROGA offers room for growth in these segments, yet only under strict conditions.
“Esports would qualify as such under PROGA only if stringent requirements are met, including recognition under the National Sports Governance Act, 2025 and registration with the Authority”, Adhikari said. Social and casual games may use subscription or advertising models, but the law’s “harsh criminal penalties” could make banks and advertisers cautious, she added.
Market research before PROGA indicated strong growth in Esports and casual gaming. Adhikari said demand could scale further “with regulatory clarity and support from the government and the Authority.”
Risk of offshore gambling
Critics fear the ban may push players towards offshore gambling sites. Adhikari said evidence from previous state-level bans suggests that prohibitions “rarely eliminate demand but simply displace it towards illegal or unregulated platforms.”
PROGA includes blocking powers and extraterritorial application to curb such operators. Effective enforcement will depend on cooperation between law-enforcement agencies, search engines, app stores and internet service providers, she said.
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India’s online gaming sector reels as new law bans all money-based games: Legal expert
