The Rajya Sabha on Thursday passed the Promotion and Regulation of Online Gaming Bill that proposes a blanket ban on games involving real money played online. The Bill makes offering or facilitating online real-money gaming a punishable offence, carrying jail terms of up to three years and fines of up to ₹1 crore. It also criminalises the advertising of such games with penalties of up to two years in prison or a fine of ₹50 lakh. The blanket ban has taken the industry by surprise. Earlier, similar efforts by some state governments had been struck down by the courts, which refused to classify games of skill in the same category as gambling. The Centre has defended its move, arguing that the ban is necessary to address the rising concerns over gaming addiction, money laundering, and financial fraud. While resisting outright bans, the courts had also acknowledged that online games are subject to regulations when they affect public health at large. Still, the government’s latest decision comes across as a knee-jerk reaction, particularly given its earlier position. Just two-and-a-half years ago, the electronics and IT ministry had released online gaming regulations that proposed a self-regulatory mechanism, mandatory verification of players, and a physical Indian address for online gaming firms. A complete ban was not under consideration at that time.
What prompted a shift in the regulatory stance? The government says that an estimated 45 crore Indians lose money annually on such games, with the combined losses pegged at ₹26,000 crore. This is indeed a serious concern for a habit-forming activity. However, what might also be considered is that the sector contributes more than ₹20,000 crore in taxes each year and claims to provide direct and indirect employment to over a lakh people. The speed with which the Bill was introduced and passed in both Houses of parliament left the industry with little time to prepare. Now, the ban may fuel the growth of a grey market, with players already hooked on to the habit drifting towards illegal international websites, thereby increasing their exposure to exploitation, fraud, and money laundering. The government could instead have adopted a calibrated approach—starting with strict regulations and gradually building disincentives to reduce participation—if it indeed views online money games as a societal problem.