Summary: India’s online gaming sector is entering a new phase with the promotion and regulation of online gaming act, 2025, which becomes effective from may 1, 2026. The law centralises regulation (versus the earlier state specific laws) and introduces clear categories for different types of online games. While real money games are banned with criminal penalties, the act creates defined pathways for e sports and online social games. This shift gives industry participants, including financial service providers, endorsers, and advertisers, a chance to reassess their business models, enhance compliance, and leverage new opportunities in a more predictable, structured regulatory environment.

India’s online gaming law, the Promotion and Regulation of Online Gaming Act, 2025 (“Act”), which will be implemented through the Promotion and Regulation of Online Gaming Rules, 2026 (“Rules”), and administered by the Online Gaming Authority of India (“Authority”), is set to come into effect on May 1, 2026.

Betting and gambling were historically regulated by states under the state gambling laws[1], with most states permitting predominantly skill-based games while criminalising chance-based formats. This (with several helpful decisions of courts[2]) created a $3.2-billion real money gaming industry in financial year 2024[3], focussed on online Fantasy Sports, Poker, and Rummy.

This changed in August 2025, when the Central Government, invoking its Union List powers[4], enacted the Act to effectively prohibit all online money games, whether of skill or chance, effectively shutting the online real money gaming industry.[5]

What followed (apart from the inevitable challenges, which continue to make their way through courts, along with the earlier “skill gaming” based GST disputes, which had already placed the industry under a cloud) is the rearchitecting of most business models in the space.

Draft rules followed in October 2025[6]. Following public consultation, the Rules were notified, in a form that differed materially from the draft.

This is the new reality of India’s online gaming industry, consisting:

• Competitive E-Sports titles, driven by the DLC ecosystem, as well as the “halo” effect of global multiplayer tournaments; and
• Free to play casual games (monetising through advertising, in-app purchases, or subscriptions).

Intermediaries who engage with these games, such as providers of payment services, advertisers, etc., will also need to comply with the Act and the Rules.

The Act regulates all persons who offer, operate, organise, manage, or “make available” one or more online games. This could extend not only to traditional game providers but also to parties organising or managing games (including E-Sports events) or otherwise making them available.

The situation remains ambiguous, and the consequences of miscalculation are criminal. As always, online gaming remains a sunshine sector. Several recent launches and announcements show that the potential is still strong.

This Article will examine this new operating reality and how entities may navigate it.

Categorisation

At the centre of the new Act is the categorisation of online games[7]. Under the Act, online games can be:

• Online Money Games[8]: where money, money’s worth, or other stakes, are placed with an expectation of winning. These formats are banned; and operating, playing, advertising, or enabling funding in them, lead to criminal liability[9]. Where a game falls in this category, it can be blocked.
• Online Social Games[10]: which are offered solely for entertainment, recreation, or skill-development, where access can require payment of subscription fees, or access fees, but cannot involve wagering. These formats are permitted, subject to the online game not being viewed as a game where, money, money’s worth or other stakes[11] are wagered on the expectation of winning, monetary or other enrichments.
• E-Sports[12]: which are played as part of multi-sports events and organised competitive events between individuals or teams, governed by predefined rules. Both participation fees, and prize moneys are permitted for E-Sport tournaments. E-Sports must be duly recognised under the National Sports Governance Act, 2025 (“NSGA”), and registered with the Authority.

The following will apply to each category of online games:

Nature	Determination	Registration	Offering	Advertisement	Payments
Online money games	N/A	N/A	No	No	No
E-Sports	Mandatory. E-Sports must be duly recognised under the NSGA. Valid until such time as there is a change in the facilitation of payments or authorisation of funds for participating in or accessing the online game.	Mandatory. Registration once granted, is valid for ten years with renewal options.	Yes	Yes	Participation fees, and winnings for registered multiplayer E-Sport tournaments, formats.
Online social games	Not required unless: (a) the Authority directs an individual game[13]; or (b) Government requires a category of games[14]; to be determined. Valid until such time as there is a change in the facilitation of payments or authorisation of funds for participating in or accessing the online game.	Not unless the Government requires an online game, or a category of online games to be registered. Registration (if required), once granted, is valid for ten years with renewal options.	Yes	Yes	One time or persistent subscription fees. In-app purchases, which do not amount to other stakes.
Offline Games	Subject to State Laws.	Subject to State Laws.	Subject to State Laws.	Subject to State Laws.	Subject to State Laws.

Authority

A powerful new Authority, set up under the aegis of the Ministry of Electronics and Information Technology[15] (“MeitY”), with wide ranging powers will determine the classification of games into these categories, register them, and otherwise administer this space.[16]

Empowered as a civil court, the Authority can conduct inquiries, impose sanctions, cancel or suspend registrations, and authorise officers to search (physically or digitally) and arrest without warrant, where offences are suspected or about to be committed.[17] The Authority may initiate inquiries into non-compliance (suo moto or on complaint), conduct hearings, and decide each complaint within 90 (ninety) days[18].

Determination

A determination (“Determination”) occurs after the Authority reviews an online game, and finds it to be an online money game, online social game, or E-Sport.

While all E-Sports are required to be Determined, other online games will need to submit themselves for Determination, where:

• the Authority, suo moto, directs an online game to be determined; or
• the Government, by notification, requires a category of social games to be Determined, having due regard to the nature, volume or value of financial transactions or fund authorisations associated with such online social game.[19]

Where an online game is Determined to be an online money game, the Authority may initiate action under the Act.[20]

Where the online game is Determined to be: (a) an E-Sport, the online gaming service provider (“OGSP”) is informed and the Authority proceeds with registration of the game; and (b) a social game, a determination order to that effect is issued.[21]

Determination must be completed within 90 (ninety) days of receipt of a complete application or issuance of notice for suo moto proceedings.[22]

In making a Determination, the Authority will largely focus on the revenue model, and reward dynamics. Specifically, it will consider:

• whether the game requires payment of fees, deposits, or stakes at any stage;
• whether users expect to win money or other rewards in return for such amounts;
• whether these amounts are used for entry or registration costs, prize money, subscriptions, or one-time access payments, as opposed to bets or wagers in expectation of winning; and
• whether in-game rewards or assets can be transferred, redeemed, or monetised outside the game.[23]

This is significant and welcome certainty, as opposed to the draft rules which empowered the authority to consider “any other factor”.

Registration

Like Determination, a registration allows an online game to verify its status as a permissible social game or E-Sport.

All E-Sports are required to be registered. The Central Government may require Online Social Games to be registered (individually, or as a category), having regard to broader criteria (over and above those applicable for a Determination), including scale of participation, risk of harm (especially to children), and country of origin of the OGSP.[24]

Registrations are time bound (i.e., 10 years) and may be cancelled due to non-compliant conduct of the OGSP, among other things.

Interestingly, deviating from the draft rules, neither the Act nor the Rules provide for a mechanism for voluntary determination or registration. In effect, this may mean that OGSPs can confidently assert that they do not need to register, unless they are called upon to do so.

By prescribing an exhaustive set of factors, the Rules provide greater certainty to OGSPs. It may also help OGSPs to structure their businesses proactively (through structuring in-game assets, revenue models, etc.) to avoid tripping up registration or determination thresholds.

While the application for registration or determination includes several factors relating to operation of online games, including user safety, the actual criteria based on which the applications need to be evaluated remain narrower. This may create limited drivers for OGSPs to put in place proactive user protection measures.

Payments

In addition to OGSPs, every entity facilitating gaming-related financial transactions (“Payment Provider”) must comply with the Authority’s directions on facilitation, routing and settlement of user payments.[25]

Where registration is mandated for an online game, Payment Providers must verify certificates of registration prior to authorising any funds.[26]

Lastly, upon receipt of a direction relating to an online money game, Payment Providers must promptly suspend or discontinue financial transactions and furnish information to the Authority.[27]

This means that Payment Providers are now independent stakeholders in ensuring that transactions within the online gaming ecosystem are compliant with directions of the Authority.

User Protection

The new online gaming ecosystem also aims to be safer for players. Under the Rules, the Authority may prescribe directions, rules, regulations, and codes of practice[28] to regulate user safety.

User protection mechanisms, such as age verification or age gating mechanisms, time restrictions, parental controls, user reporting, grievance redressal mechanisms, counselling support, fair-play and integrity monitoring tools, can be mandated, or implemented proactively, and submitted for evaluation at the time of Determination or registration.[29]

Additionally, OGSPs must retain traffic data, metadata and related information, in accordance with the Authority’s directions. While the specific nature, scope and duration of such retention obligations are to be prescribed by the Authority, the retention obligation will likely extend to retention in India.[30]

In a notable evolution from the draft rules, the Rules require every OGSP to designate a point of contact.[31] It must also appoint a grievance officer to resolve user complaints and unresolved matters may be appealed first to the Authority, and then to the appellate authority (Secretary, MeitY).[32]

Penalty

Offense	Punishment
Offering access or enabling fund transfers for online money games.	3 (three) years’ imprisonment or fines up to INR 1,00,00,000/- (Indian Rupees One Crore only). Escalated punishments for repeat offences.
Advertising or promoting (including by way of endorsements) online money games.	2 (two) years’ imprisonment and fines up to INR 50,00,000/- (Indian Rupees Fifty Lakhs only). Escalated punishments for repeat offences.
Non-compliance with the provisions of the Act.	Blocking access to the platform under the Information Technology Act, 2000.

The Rules mark a decisive shift to a centralised gaming regime. Much will depend on how the Authority exercises its powers with regard to determination, registration, financial oversight, and user safety standards, which are yet to be prescribed. The compliance burden extends well beyond OGSPs: financial institutions, payment intermediaries, advertisers, and endorsers face distinct obligations.

A key takeaway from the Act and the Rules is that the manner in which a game is designed, and the application for Determination is filed, is critical as the same game could be Determined to be an online social game or an E-Sport, depending on how it is structured and presented. If the online game is Determined to be an E-Sport, it will have to comply with the added layer of recognition under the NSGA. For most OGSPs, the sweet spot lies in securing classification as an online social game and benefitting from the streamlined launch to market journey.

With the Act and the Rules taking effect on May 1, 2026, all stakeholders especially online game service providers, financial service providers, intermediaries, influencers, artists and advertisers should promptly assess their offerings, operations, and contractual arrangements to ensure timely compliance.

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[1] Entry 34, List II, Schedule 7, Constitution of India.

[2] The key court decisions include B.R. Enterprises v. State of UP, Dr. K.R. Lakshmanan v. State of Tamil Nadu and Anr., Andhra Pradesh v. K. Satyanarayana, and Varun Gumber v. U.T., Chandigarh.

[3] Economic Times, India’s online gaming sector may cross $9 billion by 2029: Report, available at: India’s online gaming sector may cross $9 billion by 2029: Report – The Economic Times

[4] Entry 31, List I, Schedule 7, Constitution of India.

[5] Section 5 of the Act.

[6] Available at: https://www.meity.gov.in/static/uploads/2025/10/18bae7782749f36ebb062fdb0b2607ea.pdf.

[7] Section 2(1)(f) of the Act defines an online game to mean “any game, which is played on an electronic or a digital device and is managed and operated as a software through the internet or any other kind of technology facilitating electronic communication”.

[8] Section 2(1)(g) of the Act defines an online money game to mean “an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports”.

[9] Section 9 of the Act.

[10] Section 2(1)(i) of the Act defines an online social game to mean “an online game which: (i) does not involve staking of money or other stakes or participation with the expectation of winning by way of monetary gain in return of money or other stakes; (ii) may allow access through payment of a subscription fee or one-time access fee, provided that such payment is not in the nature of a stake or wager; (iii) is offered solely for entertainment, recreation or skill-development purposes; and (iv) is not an online money game or e-sport;”.

[11] Section 2(1)(j) of the Act defines other stakes to mean “anything recognised as equivalent or convertible to money and includes credits, coins, token or objects or any other similar thing, by whatever name called and whether it is real or virtual, which is purchased by paying money directly or by indirect means or as part of, or in relation to, an online game”.

[12] Section 2(1)(c) of the Act defines an e-sport to mean “an online game which– (i) is played as part of multi-sports events; (ii) involves organised competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules; (iii) is duly recognised under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3; (iv) has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players; (v) may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and (vi) shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes;”.

[13] Rule 8(1)(a) of the Rules.

[14] Rule 8(1)(c) of the Rules.

[15] Rule 5(6) of the Rules.

[16] Section 8(2)(a) of the Act.

[17] Rule 24 of the Rules.

[18] Rule 21(6) of the Rules.

[19] Rule 8 of the Rules.

[20] Rule 10(2)(a) of the Rules.

[21] Rule 10(2)(b) of the Rules.

[22] Rule 10(3)(a) of the Rules.

[23] Rule 9 of the Rules.

[24] Rule 12 of the Rules.

[25] Rule 18 of the Rules.

[26] Rule 19(1) of the Rules.

[27] Rule 19(2) of the Rules.

[28] Rule 6(4)(i) of the Rules.

[29] Rule 23 of the Rules.

[30] Rule 17 of the Rules.

[31] Rule 16 of the Rules.

[32] Rule 20 of the Rules