The Union cabinet led by Prime Minister Narendra Modi has okayed the draft bill seeking to outlaw all forms of online games involving real money, which was tabled in Parliament on Wednesday.
If passed, the law will give a major blow to India’s Real-Money Games (RMG) industry which has drawn billions in investment and provided thousands of jobs and attracted nearly half a billion players all across the country.
Real-money gaming refers to online platforms where users pay to participate in games and stand to win cash prizes. Any game that involves monetary stakes—whether based on chance or skill—falls under this category.
The draft also proposes a blanket ban on banks and payment firms from processing related transactions and it also bans offering, promoting, or even facilitating such platforms. It would be deemed a criminal offence.
According to the draft, the government has not targeted titles like Battlegrounds Mobile India (BGMI), League of Legends, PUBG, and Call of Duty. The government has clarified that e-sports and online social games which rely on ad revenue or in-app purchases rather than cash rewards will not be targeted.
Key provisions of the draft Bill
• A ban on offering or facilitating online money games.
• Classification of any game requiring an entry fee or deposit as an “online money game,” regardless of whether it relies on skill or chance.
• A blanket prohibition on advertising such platforms.
• Restrictions on banks and financial institutions from enabling payments.
The law proposes tough penalties, including up to three years in jail and fines of Rs 1 crore for hosting such games, and up to two years in jail with fines of Rs 50 lakh for promoting them.
If the law is passed, it will directly impact India’s leading RMG operators, including Dream11, My11Circle, WinZO, Games24x7, Junglee Games, and others. Collectively, these companies have secured more than Rs 25,000 crore in foreign investments and provide jobs to over two lakh people.
The draft law comes at a time when RMG firms are grappling with heavy taxation. Since October 2023, the sector has been paying 28 per cent GST on the full face value of deposits, along with a 30 per cent tax on winnings.
The government has recently floated the idea of increasing GST to 40 per cent, putting RMG in the same bracket as tobacco and alcohol.
While taxation does not currently distinguish between games of chance and skill, the new Bill makes that separation explicit—though it remains uncertain whether the GST framework will follow suit, something e-sports firms have long demanded.
