The exponential growth of India’s online gaming sector over the past decade, encompassing fantasy sports, skill-based contests, casual games, and e-sports, has posed novel legal and regulatory challenges. In the absence of a unified statutory framework, multiple states enacted divergent measures, giving rise to judicial intervention and constitutional debate regarding the distribution of legislative competence between the Union and the States. The Promotion and Regulation of Online Gaming Act, 2025, together with its Draft Rules, now establishes a centralized framework, clarifying the legal position of online gaming, standardizing classifications, and instituting enforcement and grievance mechanisms.

India’s online gaming ecosystem has witnessed significant technological sophistication and user engagement, particularly in skill-based contests, e-sports, and casual games with real-money elements. The rapid growth of real-money gaming platforms, however, raised serious concerns regarding gambling addiction, financial risk exposure, and potential misuse for illicit activities, including money laundering. In the absence of a central statute governing these activities, multiple states independently amended their gambling and police laws to regulate or prohibit online gaming.

This fragmented approach not only created legal uncertainty but also raised constitutional questions regarding the scope of State powers under Entry 34 of the State List (betting and gambling) versus Union powers under Entry 31 (telecommunications), Entry 42 (inter-state trade) and residual powers under Article 248 and Entry 97 of List I. Judicial intervention in several instances underscored the importance of the skill – chance distinction and emphasized that regulatory measures must be proportionate and targeted, rather than blanket prohibitions that stifle legitimate business.

The enactment of the Promotion and Regulation of Online Gaming Act, 2025 (Act No. 32 of 2025), represents a decisive legislative effort to harmonize the legal framework, protect users, and ensure uniformity in regulation across India. The Act is complemented by the Draft Promotion and Regulation of Online Gaming Rules, 2025, which will operationalize the statutory provisions and provide detailed guidance on registration, game classification, and enforcement.

Historical Context: State Regulation and Judicial Intervention

Before 2025, state-level interventions were characterized by significant variance in scope and approach. Notable examples include:

The Telangana Gaming (Amendment) Act, 2017, which prohibited real-money online games;
The Andhra Pradesh Gaming (Amendment) Act, 2020, imposing broad restrictions on online gambling;
Amendments in Karnataka (Police Amendment Act, 2021) and Tamil Nadu (Gaming Acts, 2022–2023) attempting blanket prohibitions on online paid games.

These laws often failed to distinguish between games of skill and chance, raising constitutional concerns under Article 19(1)(g) regarding the right to conduct trade or business. Courts consistently held that games in which skill predominates cannot be treated as gambling, even if monetary stakes are involved. Landmark decisions, such as Malaiyandi v. State of Tamil Nadu (Madras HC, 2018) and All India Gaming Federation v. State of Karnataka (Karnataka HC, 2021), struck down overbroad state restrictions and underscored the need for proportionate and targeted regulation, thereby shaping the contemporary legal understanding of online gaming.

These judicial interventions highlighted the constitutional tension inherent in online gaming regulation, while states hold authority over gambling under Entry 34, the online medium implicates Union powers over digital platforms and inter-state commerce, creating an area of overlapping jurisdiction. This tension informed legislative deliberations that culminated in the 2025 Act.

The Promotion and Regulation of Online Gaming Act, 2025

The 2025 Act represents a legislative milestone, providing a nationally uniform framework for online gaming accessible in India, irrespective of the operator’s physical location. Its objectives are threefold:

Prohibition of online money games;
Promotion of skill-based and social games; and
Centralized regulation and enforcement through the Online Gaming Authority of India (OGAI).

Salient Features

The Act defines prohibited online money games and prescribes penalties up to INR 1 crore and imprisonment up to three years for operators, facilitators, advertisers, and financial intermediaries. At the same time, it encourages the development of e-sports and social gaming platforms that do not involve cash stakes, creating a legally compliant pathway for industry growth.

A central regulatory authority, the OGAI, is empowered to register operators, classify games, issue operational guidelines, monitor compliance, and adjudicate grievances. The Act provides a structured enforcement mechanism, including fines, license suspension, and criminal liability for violations, ensuring accountability while protecting legitimate commercial activity.

Draft Promotion and Regulation of Online Gaming Rules, 2025

The Draft Rules propose to operationalize the Act by providing detailed procedures for classification, registration, compliance, and enforcement. Games are categorized into online money games (prohibited), online social games (permitted, registered), and e-sports (permitted, registered). Operators are required to maintain registration with OGAI, update records regarding material changes, and comply with the National Online Social Games and E-sports Registry, enhancing transparency and centralized oversight.

The Draft Rules also establish a three-tier grievance redressal system, involving internal platform mechanisms, appellate committees, and final adjudication by OGAI. Enforcement provisions include penalties for non-registration, facilitation of prohibited games, and liability for company officers, making regulatory compliance both legally and operationally significant.

Judicial Challenges and Ongoing Review

Despite the clarity of the Act, legal challenges were filed in multiple High Courts, contesting its provisions as arbitrary, disproportionate, or constitutionally infirm. Prominent petitions include:

Head Digital Works Pvt. Ltd. v. Union of India(Karnataka HC);
Bagheera Carrom (OPC) v. Union of India(Delhi HC); and
Clubroom 11 Sports & Entertainment Pvt. Ltd. v. Union of India(Madhya Pradesh HC).

Petitioners argued that the Act’s blanket prohibition on online money games infringes Article 19(1)(g) rights and negatively impacts investment, employment, and legitimate skill-based gaming. To ensure consistency, the Supreme Court consolidated all petitions for a comprehensive hearing to assess constitutionality and determine the boundaries of permissible gaming activities with the next substantive hearing expected to be held in the month of January 2026.

Constitutional Basis and State Roles

The 2025 Act relies on multiple constitutional provisions:

Entry 31, List I – telecommunications and broadcasting;
Entry 42, List I – inter-state trade and commerce; and
Article 248 and Entry 97, List I – residual powers of the Union.

This ensures that online gaming, inherently borderless, is subject to nationally consistent regulation, reducing the potential for inter-state conflicts. States retain powers related to public order, consumer protection, and localized enforcement, provided these do not conflict with the Act. This cooperative federal model reconciles historical tensions and provides clarity for operators and regulators alike.

Industry Adaptation and Regulatory Implications

The enactment of the Act and Draft Rules requires operators to adapt offerings, transitioning from real-money formats to ad-supported social games or e-sports, while ensuring compliance with registration and classification norms. Enforcement challenges remain, particularly regarding offshore operators and financial intermediaries facilitating prohibited transactions. Judicial review will further clarify the legal limits of skill-based gaming and the application of proportionality in regulatory enforcement.

The Promotion and Regulation of Online Gaming Act, 2025, together with its Draft Rules, represents a comprehensive, constitutionally sound regulatory framework that addresses the historical fragmentation of online gaming law in India. By banning online money games, promoting permissible formats, establishing a centralized authority, and providing structured grievance redressal, the Act balances consumer protection, constitutional safeguards, and industry growth. While enforcement and judicial scrutiny continue to shape the sector, the legislative framework lays a strong foundation for the responsible development of India’s digital gaming economy.

Online Gaming Regulation in India

Salient Features