'Rs 20,000 Crore Lost Every Year': Why Government Wants Online Gaming Bill

An estimated 45 crore people lose around Rs 20,000 crore every year playing online games, including gambling and betting games, government sources told NDTV Wednesday afternoon, shortly before the Promotion and Regulation of Online Gaming Bill, 2025, was passed by the Lok Sabha.

Sources said online gaming, specifically those involving money - either to place 'bets' or as subscription fees or to access in-game content - have become a 'major problem' with many MPs flagging concerns.

And the government, having to choose between revenue from online gaming websites and the financial and mental welfare of the people, chose the latter, sources said.

The proposed bill highlights concerns over addiction to games, fraud by game operators and developers, and inconsistences in state laws regarding gambling. It also proposes stricter oversight of gaming platforms, particularly those offering real-money games, such as poker.

There are also concerns these are used to launder money or even finance terrorism.

Sources said 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.

Last week, in connection with a federal investigation into illegal betting apps - which masquerade as 'a game of skill' to appear different from gambling games, which are outlawed by Indian laws - sources told NDTV this 'market' is worth Rs 8.3 lakh crore and is growing at 30 per cent annually.

READ | Rs 8.3 Lakh Crore Market: Inside India's Illegal Online Betting Apps

The new bill, introduced by Union Electronics and IT Minister Ashwini Vaishnav, creates a legal framework, including levying penalties for running gambling apps, to regulate these gambling platforms.

These penalties include a three-year prison sentence, a fine of Rs 1 crore, or both for any person offering online money-based gaming services in violation of the law. And those advertising such endeavours may face a two-year jail term and/or pay a fine of Rs 50 lakh.

NDTV Explains | Everything You Need To Know About Online Gaming Bill 2025

There are three main parts to this legislation, which suggests the establishment of a national-level 'Online Gaming Authority' to regulate digital gaming. This body will categorise and register games, decide which qualify as 'money games', and handle complaints from citizens.

E-sports -

Sources said the government is keen to promote e-sports, which refers to organised and competitive gaming involving users playing in a tournament or league format for prize money.

The government wants to provide legal recognition to e-sports via this bill, sources said.

The government intends to allocate funds to promote and maintain these activities, which account for two-thirds of the online gaming industry and will create jobs, sources also said.

Online Social Games -

Like e-sports, these will also be given legal recognition, sources said.

The government hopes to use these games to send important socio-cultural messages, and developers and promoters of these games could receive financial support, sources also said.

Online social games also include multiplayer games like Fortnite, Counter-Strike, Minecraft, etc., which most frequently involve real-time interaction with other players.

By promoting both - i.e., e-sports and safe online social games - the government hopes India will become a global hub for video game development, both coding and creative.

Online Money Games -

Strict provisions have been included for action against companies that promote online gambling or betting, sources said. Action will also be taken against those who advertise such platforms, which will increase scrutiny on celebrities who were, or are being, questioned over links to online betting apps.

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Overall, the government is in the process of tightening the online gaming sector. This has included imposing a 28 per cent tax on online gaming activities since October 2023.

Winnings were taxed at 30 per cent starting from the 2024-25 financial year.

Offshore gaming platforms have been brought under the tax net and unregistered or illegal gaming sites - over 1,500 for betting and gambling since 2022 - have been blocked.