Games of skill should not be confused with games of chance, says gaming industry
An entire sector generating revenue worth ₹31,000 crore is about to be ousted from the Indian economy to prevent addiction risks among the youth under the Online Gaming Bill passed by the Lok Sabha on Wednesday
| Photo Credit:
HUMONIA
Ban on real money gaming abuses our Constitutional rights, say gaming companies, in response to the passing of the Promotion and Regulation of Online Gaming Bill, 2025.
An entire sector generating revenue worth ₹31,000 crore is about to be ousted from the Indian economy to prevent addiction risks among the youth under the Online Gaming Bill passed by the Lok Sabha on Wednesday. However, lawyers and stakeholders have raised issues with many ambiguities in the Bill, particularly skill-based and chance-based games that have been clubbed together without prior consultation — a distinction that has been upheld by multiple courts, including the apex court.
“The legal issue is that the Bill has now obliterated the difference between what we would understand earlier as a “game of skill” and a “game of chance”. Game of chance has always been prohibited in India because it’s akin to gambling,” Snigdhaneel Satpathy, Partner at Saraf&Partners, told businessline.
Until recently, fantasy sports, online rummy and similar online games had a Constitutional protection under Article 19. In fact, according to a gaming report by WinZo Games, several countries across the world such as UK, Canada and Netherlands pay close attention to this demarcation.
GST provisions
Sapathy argued that drawing a distinction is also important considering online gaming is one of the most profitable sectors in India, with the government “raking money” from the sector, thanks to GST provisions. One gaming company, Dream11, has become big enough to become the title sponsor for IPL.
In a joint letter, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF) and the Federation of India Fantasy Sports (FIFS) described online skill gaming as one of the potential cornerstones of the $1 trillion digital economy vision.
“Today, online skill gaming is a sunrise sector with over ₹2 lakh crore enterprise valuation, over ₹31,000 crore in revenue, over ₹20,000 crore in annual direct and indirect taxes, and is set to grow by 20 per cent CAGR to reach even greater heights and double by 2028. The total number of Indian online gamers grew from 36 crore in 2020 to over 50 crore in 2024. India’s gaming industry attracted FDI of over ₹25,000 crore till June 2022. The industry currently supports over 2 lakh direct and indirect jobs, and these numbers will grow substantially in the next few years,” they said in a letter.
serious flaws
The federations warned that the Bill will cause serious harm to Indian users and citizens and drive crores of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators, who function without any safeguards, consumer protections, or taxation. Instead of protecting people, this Bill risks exposing them to fraud, exploitation, and unsafe practices may end up helping illegal offshore operators. Another fallout would be the loss of over 2 lakh jobs, resulting in over 400 companies shutting down and weaken India’s position as a digital innovator.
Similarly, Anuraag Saxena, CEO, E-Gaming Federation, in a separate statement, said: “Global experience shows that calibrated regulation delivers better outcomes than blanket restrictions, which can unintentionally nudge users towards unregulated offshore platforms. Instead, a balanced approach that clearly distinguishes between skill-based formats and games of chance can help foster a transparent ecosystem that both protects players and strengthens public trust.”
When asked, most sources speaking to businessline said they saw no way forward if the Bill is to become a law. Aside from job loss, the law will result in close to 400 Indian being forced to shut operations, nearly ₹25,000 crore in foreign direct investment will be at risk of being written off, and advertising would face a potential reduction of ₹10,000 crore annually.
The Finance Minister recently stated that GST revenues from online gaming rose 412 per cent, reaching ₹6,909 crore between October 2023 and March 2024, compared to ₹1,349 crore in the previous six months. Yet, during a government briefing, officials said they are keen to ban all forms of real money gaming in the country.
Reacting to the Bill’s content, Probir Roy Chowdhury, Partner, JSA Advocates & Solicitors said: “The Government of India’s proposal to prohibit online real-money games, rather than regulate them, will harm the domestic gaming industry and undermine investor confidence.
He described the gaming sector as a prime example of Indian startup success, despite unfavourable GST policies at 28 per cent rate and State-level regulatory uncertainty. The proposed ban represents a sharp policy reversal, abandoning the Government’s earlier plan for industry self-regulation under the 2021 IT Intermediary Rules, which can lead to loss of confidence among investors, said Chowdhury.
“Furthermore, a prohibition is unlikely to stop online gaming. As is the case with sports betting, prohibition will instead drive players towards illegitimate and predatory offshore platforms, ultimately limiting the Government’s oversight and exposing Indians to greater harm.,” he said.
Published on August 20, 2025
