Online Gaming Legislation in 2025: A Historical Perspective

Online Gaming Legislation in 2025: A Historical Perspective - Origins of the Era

The Indian gaming industry has seen significant growth in recent years, driven by increased investments, technological advancements, and a growing workforce. This growth was facilitated by recognition via state-level laws, intermediary regulations, taxation regimes, and judicial developments.

However, the lack of a uniform and consistent framework of gaming laws at the Central level created challenges. This complex legal landscape was marked by a persistent struggle to disentangle "games of skill" from "games of chance."

To address these issues, the Parliament recently cleared India's new gaming law called "The Promotion and Regulation of Online Gaming Act, 2025" ("PROGA"). This new law aims to bring clarity, uniformity, and modernity to the online gaming sector.

PROGA establishes a National Online Gaming Authority to register, monitor, and regulate online gaming operators. It classifies online games into three categories: e-sports, online social games, and online money games. E-sports, being skill-based online games that are part of a multi-sport event, governed by predefined rules and registered under the National Sports Governance Act, 2025, are regulated under PROGA. Online social games, games played solely for entertainment, recreation, or skill-development purposes, and do not require staking of money or other stakes, are also subject to mandatory registration.

Online money games, however, are prohibited under PROGA, regardless of whether they are skill-based or chance-based. Non-compliance with PROGA can attract penalties of up to ₹2 crores and imprisonment for up to five years.

The evolution of the Indian gaming sector was not without its social and legal challenges. Issues such as player protection, gambling addiction, underage gaming, skill-vs-chance gaming, and enforcement shortcomings have arisen due to the massive rise of India's online gaming industry, which includes casual games, e-sports, fantasy sports, rummy, poker, and more.

The Information Technology Act, 2000 and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 impacted the online gaming sector by including online games and online real money games within its ambit, providing for due diligence obligations for these platforms, and providing safe harbour protection for compliant intermediaries.

The Public Gambling Act, 1867 criminalized the keeping of "common gaming houses" and public gambling, but provided an exemption for "games of mere skill." Post-independence, the power to legislate betting and gambling shifted to the States, resulting in variants of the PGA, liberal gambling regimes, and frameworks for online and skill-based gaming in certain states.

However, conflicting judgments of High Courts with respect to the determination of certain games as a game of skill versus chance complicated the overall jurisprudence of gaming laws. Regulation of the online gaming sector has led to litigations and stays, creating a regulatory vacuum on several issues.

The Government of India officially passed "The Promotion and Regulation of Online Gaming Act, 2025," which bans online money games, regulates e-sports and social gaming, and imposes penalties on illegal activities related to online money gaming. It came into effect shortly after its passing by the Parliament on August 21, 2025.

With PROGA in place, the online gaming sector in India now has a clear and modern regulatory framework, paving the way for its continued growth and development.