Around 45 crore Indians lose nearly ₹20,000 crore annually on online gaming, including gambling and betting, government sources told NDTV on Wednesday. This disclosure came just before the Lok Sabha cleared the Promotion and Regulation of Online Gaming Bill, 2025.

Officials said games involving money, whether for betting, subscriptions, or paid in-game content, have become a “major problem”, with several MPs raising red flags. The government, sources added, had to choose between tax revenue from gaming websites and the financial and mental health of citizens.

The new law flags issues such as gaming addiction, fraud by operators, and inconsistent state laws on gambling. It proposes strict checks on platforms offering real-money games like poker. Concerns were also raised about the use of such platforms to launder money or fund terrorism.

Importantly, officials clarified that players will not be punished. “People who play these games are victims (and) will not be punished... but there will be action against those who run real money gaming platforms, facilitate transactions, etc.,” sources said.

The crackdown comes amid reports that India’s illegal betting market – often disguised as “games of skill”, is worth ₹8.3 lakh crore and is growing by 30% every year.

Under the new bill, anyone running gambling apps faces up to three years in jail, a fine of ₹1 crore, or both. Those advertising such services may face two years in prison or a ₹50 lakh fine.

The bill proposes creating an Online Gaming Authority to regulate digital gaming. This body will:

  • Register and classify games.

  • Decide which games qualify as “money games.”

  • Handle complaints from users.

E-sports and social gaming get a boost

While cracking down on gambling, the government is also keen to promote e-sports – organised, competitive tournaments where players compete for prize money. Sources said the bill aims to give legal recognition to e-sports and even allocate funds to support them, as they make up two-thirds of India’s online gaming industry.

Similarly, online social games like Fortnite, Counter-Strike, and Minecraft will also receive recognition. Officials said these games could be used to spread socio-cultural messages, with developers potentially getting financial support.

By supporting e-sports and safe online social games, the government hopes to make India a global hub for video game development, spanning both coding and creative design.

The online gaming sector has already faced stricter rules over the last two years. Since October 2023, online gaming has been taxed at 28%, while winnings have been subject to 30% tax from the 2024-25 financial year. Offshore platforms are also under the tax net, and since 2022, over 1,500 illegal betting sites have been blocked.

You might also be interested in - Not a noob anymore! How women are leading the gaming world