The Lok Sabha has passed the Promotion and Regulation of Online Gaming Bill, 2025, which aims to create a national legal framework for the online gaming sector in India. The bill seeks to promote and regulate online gaming, including e-sports, educational games, and social gaming, while also addressing the risks associated with online money games. The legislation intends to protect individuals, particularly youth and vulnerable populations, from adverse social, economic, psychological, and privacy-related impacts. It also aims to maintain public order, protect public health, and safeguard the integrity of the nation’s financial systems and security.
Key Objectives and Rationale
The bill acknowledges that the online gaming sector is a rapidly growing part of the digital economy, offering significant opportunities for innovation, employment, and technological advancement. However, it also highlights the serious social, financial, psychological, and public health harms caused by the proliferation of online money games. The bill notes that the lack of a dedicated legal and institutional framework has hindered the sector’s structured development and led to issues like manipulative design features, addictive algorithms, and financial ruin for users. Additionally, the bill addresses concerns related to online money gaming services operating from offshore jurisdictions, which bypass domestic laws and pose threats of financial fraud, money laundering, and tax evasion.
Categorization of Online Games
The bill provides clear definitions for different types of online games:
- Online Game: Any game played on an electronic or digital device, operated as software through the internet or other technology that facilitates electronic communication.
- E-sports: These are online games recognized under the National Sports Governance Act, 2025, that are part of multi-sports events and involve competitive play based solely on skill, such as physical dexterity and strategic thinking. E-sports can include registration fees and performance-based prize money, but players are prohibited from placing bets, wagers, or stakes on them. The bill directs the Central Government to take steps to recognize and promote e-sports as a legitimate form of competitive sport in India.
- Online Social Game: These are online games offered for entertainment, recreation, or skill-development purposes, which do not involve the staking of money or the expectation of monetary gain. They may require a one-time access or subscription fee, but this fee cannot be a stake or wager. The government is mandated to facilitate the development and availability of these games.
- Online Money Game: This is defined as an online game where a user pays fees, deposits money, or places “other stakes” in the expectation of winning monetary or other forms of enrichment in return. “Other stakes” are anything convertible to money, including virtual credits or tokens purchased with money. The bill explicitly states that
It is to be noted that E-sports are not considered online money games.
- Prohibitions and Penalties
The bill imposes strict prohibitions on online money games:
- Offering and Facilitation: No person is allowed to offer, aid, abet, or engage in offering online money games or online money gaming services.
- Advertisement: The bill prohibits any person from creating, aiding, or being involved in advertising online money games in any media, including electronic communication.
- Financial Transactions: Banks, financial institutions, or any other person facilitating financial transactions are prohibited from assisting or enabling fund transfers for online money gaming services.
Violations of these prohibitions carry severe penalties. For offering online money gaming services or facilitating financial transactions, the punishment can be imprisonment for up to three years, a fine of up to one crore rupees, or both. Repeat offenses for these violations can lead to imprisonment for a term of three to five years and a fine of one to two crore rupees. For illegal advertising, the penalty is up to two years of imprisonment, a fine of up to fifty lakh rupees, or both, with repeat offenses carrying a minimum two-year imprisonment and a fine of at least fifty lakh rupees. Additionally, offenses related to offering online money gaming and facilitating financial transactions are deemed cognizable and non-bailable.
Establishment of the Online Gaming Authority
The bill provides for the creation of a new Authority or the designation of an existing agency to oversee the online gaming sector. This Authority will have the power to:
- Determine whether an online game is an online money game or not.
- Recognize, categorize, and register online games.
- Address complaints from users that are prejudicial to their interests.
The Authority will be composed of a Chairperson and other members, with their qualifications, terms, and functions to be prescribed by the Central Government. Failure to comply with the Authority’s directions can result in a penalty of up to ten lakh rupees, along with the suspension or cancellation of registration.
Extent and Applicability
The Promotion and Regulation of Online Gaming Act, 2025, extends to the whole of India and also applies to online money gaming services offered within India’s territory or operated from outside the country. In case of any inconsistency with other laws, the provisions of this Act will have an overriding effect. The Central Government is also empowered to authorize officers to investigate and conduct searches and seizures, including digital spaces and computer resources, for offenses under the Act.
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