Last month, the Centre enforced a complete ban on all forms of real-money online games, while encouraging the growth of e-Sports and non-monetary online social games.
The Promotion and Regulation of Online Gaming Act aims to ban all forms of online money games—whether offered, operated, promoted, or played—especially those running across state lines or from foreign countries. This was done particularly with an intention to protect individuals, especially youth and vulnerable groups from the harmful effects of such games. It also intends to create a single, national legal framework for regulating online gaming.
The ban comes at a time when India’s online gaming market is booming, currently, according to a report, valued at $3.7 billion.
Critics argue that the ban may end up doing more harm than good by driving users toward unregulated and offshore platforms—areas where the Indian government has little control.
A major challenge in enforcing the ban lies in the global nature of the internet, said Akhil K.M., a legal expert based in Kerala, highlighting the practical difficulties in policing these activities.
“The usage of VPNs and other possibilities are still open. The areas related to cybercrimes are only at a developing stage -- both policing and investigation," he said.
“Moreover, currently, there are no provisions for penal action against the users; it’s only against the people who offer the services," he added.
Dr. S. Sriranjani Mokshagundam, Professor of Management at BGS B-School in Bangalore, warns that banning real-money games doesn’t eliminate demand—it simply redirects it.
“This is a very real concern. Banning popular formats rarely eliminates the demand. It simply redirects them. Players in search of the same thrill are very likely to migrate toward offshore or unregulated platforms, which operate beyond the reach of Indian law,” she noted.
Multiple users echoed similar views on the recent ban.
“If there’s a ban, people will naturally move to offshore platforms… If you block safe, local platforms, users will just turn to unsafe ones abroad,” said Vignesh, an engineer.
Vignesh shared that he was initially lured into real money gaming through promotional messages.
“It’s been a while since we started receiving messages like this. Whenever someone needs money, the message feels like a ‘friend in need’ offering a way to play the game,” he said.
He admitted that he continued playing even after losing money because he hoped to recover it in the next game.
“When we don’t play, we miss the hope of a comeback and feel left out when others are playing,” he added.
Vignesh also felt that the punishments under the law are too harsh.
“There should be rules that are safe for players and also good for the economy,” he suggested.
According to the new law, anyone offering online money gaming services in violation of Section 5 of the Act can face: Imprisonment of up to three years, a fine of up to Rs 1 crore or both. Additionally: Anyone who makes or publishes advertisements for such games can be punished with imprisonment of up to two years, a fine of up to Rs 50 lakh, or both.
Those involved in processing or authorizing payments for online money gaming can also face up to three years’ imprisonment, a fine of up to Rs 1 crore, or both.
Despite these penalties, Saran (name changed), who works in the media industry, was skeptical about the ban’s effectiveness.
“Nobody will stop playing. When PUBG was banned earlier, people still played it by using VPNs. This will be no different,” he said.
Rishi, a B.Com student who lost nearly Rs 1 lakh on a real money gaming app, shared his experience, saying that although it initially felt rewarding, he eventually began losing money.
“If you're addicted, you'll keep playing no matter what,” he cautioned.
He pointed out that even if such apps are banned by law, addicted users will always find ways to access them.
Rishi explained how he got into the habit, stating that it was the promotional messages offering “free cash credited” that initially drew him in. He admitted that even after losing money, he continued to play in the hope of recovering his losses.
Karthi, an engineer based in Bengaluru, described how social media platforms introduced him to real money games.
“I first saw these apps through ads on social media, often promoted by celebrities and influencers. Out of curiosity, I decided to try them once—and that’s how I started,” he said.
He noted that while the ban would affect people who can afford multiple attempts and understand investment strategies, many others fall into debt, losing everything and, in some cases, being pushed into extreme situations.
Karthi expressed the opinion that instead of a blanket ban, the government should consider limited and regulated access to real money gaming apps.
“Some government-approved apps were helpful because they offered proper support. I did earn money at times, but I also lost when I got carried away with high-risk offers. So I believe these apps should be allowed only for those who can afford to play,” he noted.
The Online Gaming Act classifies online games into four main categories—e-sports, social games, educational games, and online money games—and establishes a framework to regulate each of them differently.
E-sports, which include competitive video games like PUBG, FIFA, or Valorant, are being positioned as skill-based activities, much like traditional sports. The government aims to promote e-sports, viewing them as a potential career path for young people.
Social games, such as Ludo King, Candy Crush, or online chess, are primarily played for fun and entertainment with friends. These games are considered relatively safe, but the bill still proposes regulations to ensure user safety, age restrictions, and data protection.
Educational games, which are designed to help users learn or develop skills, are also being encouraged under the new rules. These include math quizzes, coding games for kids, or language learning apps like Duolingo.
The most significant change, however, concerns online money games—games in which players deposit real money and stand to win cash rewards. These stand completely banned. The government has raised serious concerns about their addictive nature and harmful impact on users, particularly among younger audiences.
Authorities have cited several alarming consequences of unregulated gaming: addiction, mental health issues, debt traps, and even suicides. Many real-money gaming platforms operate across state and national borders, often hosted on offshore servers, making them difficult to monitor or regulate.
A recent tragedy in Odisha highlights the urgency behind the ban. On August 13, a 13-year-old boy named Jaykrushna Jena died by suicide after his father prohibited him from playing online games on his mobile phone.
However, the effectiveness of the bill will ultimately depend on user behavior, as many users may try to bypass restrictions by turning to foreign platforms or using VPNs to access banned services.
Sriranjani Mokshagundam remarked: “The real test will lie not in the ban itself, but in the regulatory ecosystem that follows. If India builds an environment that channels innovation responsibly, the industry could emerge stronger. If not, we risk driving talent, capital, and opportunity offshore.”
According to her, in the short term, the ban threatens to shake the very foundations of India’s online gaming ecosystem. Since real-money games contribute the bulk of industry revenues, their prohibition could trigger an immediate contraction, leading to shrinking market valuations, widespread layoffs, and a decline in government tax collections. Smaller start-ups, many of which rely almost entirely on such revenues, may be forced to shut down altogether.
In the longer term, however, the picture may change. The Act creates an opportunity for a more regulated ecosystem, where e-sports and skill-based games are formally recognized. If implemented thoughtfully, it could help professionalize the industry, attract responsible investment, and align India with international gaming standards.
“The real challenge,” she added, “is whether regulators and industry players can manage this painful transition without letting short-term shocks derail long-term opportunities.”