[This article is authored by Priyanshu Danu, IV Year B.Sc. LL.B. (Cyber Security) student at the National Law Institute University. It examines India’s new law banning online money games, weighing its social safeguards against economic risks, and proposes a balanced regulatory framework drawing from global best practices.]
The newly enacted Promotion and Regulation of Online Gaming Bill, 2025 has created much hype in India’s policy space. In its background note, the Press Information Bureau (PIB) cites the World Health Organization’s inclusion of “gaming disorder” as a health disorder in the International Classification of Diseases. According to the WHO, gaming disorder includes loss of control over gaming, neglect of responsibilities, and continued engagement in gaming despite adverse consequences. This definition has been used to justify strict regulations of online money games in India.
But the WHO itself has clarified that gaming disorder occurs in only a small fraction of players of those who play. While the PIB mentions broader concerns like financial distress, breakdown of families, and suicides among youth, these are not diseases directly included under the WHO’s list. Moreover, the bill bans online money games specifically, despite the term “gaming disorder” encompassing various types of games.
This blog aims to investigate how equilibrium can be achieved between the potential risks associated with online money games and the potential they hold as an emerging digital sector. Drawing on practices from the UK, Germany, Australia, Spain, and Singapore, it outlines safeguards such as deposit caps, self-exclusion systems, credit bans, and advertising rules. It is not a battle against regulation but an exploration of the choices India has to protect the well-being of its people and ensure financial security while encouraging a transparent and responsible online gaming community.
Backdrop of India’s New Law
The Lok Sabha on 21st August passed the Promotion and Regulation of Online Gaming Bill, 2025, which bans online money games and curbs related ads and payments, citing youth addiction, financial distress, and suicides. The Bill simultaneously promotes e-sports and non-monetised digital games, and has now received presidential assent.
The act divides online gaming into three different segments: esports, online social games, and online money games. Esports, defined under Section 2(1)(c) of the act, means a recognised competitive online game, played under predefined rules in multiplayer formats, where outcomes depend solely on players’ skills and not on betting or wagering. An online social game u/s 2(1)(i) means an online game played solely for entertainment or skill development, without wagering or monetary stakes, and distinct from online money games or e-sports. Players may pay to access certain perks of the games, but never to bet or win money. Both these segments remain fully legal under the new Act. Further under Chapter IV of the act, the bill mentions the constitution of a supervising authority to monitor and regulate the following esports in India. The prohibition herein is directed solely at online money games, such as stake-based fantasy or betting platforms like Parimatch or Dream11, where outcomes involve monetary stakes and potential winnings.
Why Money Games were Banned
The government’s rationale extends beyond addiction and debt. The Bill highlights how real-money gaming platforms often feature manipulative design elements that foster compulsive behavior, leading to mental health issues and financial distress for families. The legislation also highlights risks of fraud, money laundering, terrorist financing, and the misuse of gaming platforms for illicit communications. Additionally, the ease of access resulting from the technological revolution in India, aggressive celebrity endorsements, and a lack of regulation are cited as amplifiers of harm. The result: vast numbers of economically vulnerable individuals have suffered, with an estimated collective loss of over ₹20,000 crore. Therefore, the Act prescribed penalties for offering or funding online money games, which can attract up to three years’ imprisonment and fines of up to ₹1 crore, while illegal advertising can lead to two to three years’ imprisonment and fines between ₹50 lakh and ₹1 crore. It also makes such offences cognizable and non-bailable, extending liability to responsible company officers.
What Remains Legal & Why
E-sports and online social games continue to be legal because they lack wagering and focus on skill, education, or recreation. E-sports are being formally recognised as legitimate sports under the new regulatory regime, complete with support systems like tournaments, training academies, and research infrastructure. Social and educational games are likewise permitted, promoted for digital literacy and healthy engagement, provided they do not involve monetary stakes.
But the debate now is: do the benefits of a total ban outweigh the potential gains of targeted regulation? That brings us to the pros and cons of the Act, which we explore next.
Pros and Cons
The Act brings clear benefits. By banning online money games, it aims to protect youth from addictive platforms, prevent financial harm, and tackle issues such as fraud, money laundering, and potential misuse by criminal networks. It also elevates e-sports and casual gaming as legitimate, skill-based, and recreation-oriented sectors, opening pathways for growth, innovation, and formal recognition of digital sports
However, critics warn that the blanket ban could devastate India’s budding gaming ecosystem. The sector, which supports upwards of 100,000–200,000 jobs and generates significant tax revenues (estimated around ₹20,000–₹30,000 crore), faces industry-wide shutdowns, investment pullouts, and job losses. There’s concern that completely banning money-based games may drive players toward unregulated offshore platforms, increasing exposure to fraud and data breaches, while also eliminating a potential regulated revenue source. Industry leaders further argue that the law was passed without adequate stakeholder consultation and that piecemeal prohibition could stifle innovation and investor confidence.
What the world does (and what actually works)
In the United Kingdom, a similar need arose for regulating online gambling harms, where the state sought pragmatic solutions like capping the bids one can place. Adults aged 25 and over can risk no more than £5 per spin, while younger players aged 18–24 are capped at £2 per spin.
Germany’s approach pairs monetary limits with technical restrictions through its LUGAS system – a centralised national monitoring platform that tracks every player’s activity across operators. Players face a cross-platform €1,000 monthly deposit cap, and even though higher limits (up to €30,000) may be permitted under strict affordability checksv, the law imposes a €1 stake-per-spin cap and a mandatory 5-second pause between spins, effectively throttling rapid, high-frequency play.
Similarly, Spain has tackled exposure risks through advertising curbs. Its Royal Decree banned gambling ads during key hours, disallowed influencer endorsements, and prohibited aggressive new-player promotions; actions that led to a ~55% fall in new account sign-ups. Australia further employs a consumer-empowerment strategy via BetStop, a unified self-exclusion register that allows individuals to bar themselves from all licensed online wagering with a single step.
Designing a Balanced Framework for India
India’s path should avoid the extremes of unchecked expansion and outright prohibition. Instead, a calibrated licensing-and-regulation model can safeguard citizens while fostering a responsible industry.
The foundation must be a licensing regime with rigorous vetting of operators, mandatory KYC/AML compliance, and real-time financial reporting. Germany’s LUGAS system offers a blueprint that India could follow. We could create a centralised registry, linked to Aadhaar-based KYC, to monitor player deposits across platforms and flag excessive or suspicious activity.
Deposit and stake limits should mirror international practices but be tailored to local realities. The UK’s age-based stake caps (£5 for adults, £2 for younger players) could inspire similar differentiated caps in India, while Germany’s monthly deposit ceiling (€1,000, with affordability-based exceptions) can be adapted into rupee terms, supported by affordability checks tied to income disclosures. A Spain-style stake-per-spin cap and mandatory “cooling-off” pauses between high-frequency bets would further curb impulsive play.
Consumer protection tools must empower individuals and families. Australia’s BetStop demonstrates the utility of a single-step self-exclusion register; in India, this could be integrated with Aadhaar to block access across all licensed operators. Singapore’s model of family-initiated exclusion is also worth adopting, allowing relatives to request suspensions for at-risk players. Also, a ban on credit-based play is essential to prevent debt spirals. The advertising ban in the current bill should continue, as it prevents celebrity engagement and curbs predatory promotion
Finally, revenues from licensed operators must be ring-fenced for public good: funding mental health services, addiction helplines, and research. Meanwhile, esports and social games should be actively promoted as engines of digital literacy, recreation, and global sporting recognition.
A dedicated regulator should oversee licensing, compliance, and continuous rule updates, ensuring India’s framework evolves with technology. By combining the UK’s stake caps, Germany’s monitoring, Spain’s ad curbs, Australia’s self-exclusion, and Singapore’s family protections, India can replace prohibition with a transparent, responsible, and growth-oriented model.
Conclusion
India’s online gaming dilemma lies not in choosing between growth and protection, but in designing regulation that achieves both. A blanket ban may offer short-term relief but risks long-term harm by driving players offshore and stifling innovation. A balanced framework anchored in licensing, deposit limits, self-exclusion, credit bans, and advertising curbs, while nurturing e-sports and social gaming, can safeguard vulnerable users and harness the sector’s economic value. By adopting global best practices and tailoring them to local realities, India has the opportunity to build a transparent, responsible, and sustainable online gaming ecosystem.