Promotion and Regulation of Online Gaming Rules, 2025

Introduction and Purpose

The Ministry of Electronics and IT (MeitY) released the draft Promotion and Regulation of Online Gaming (PROG) Rules, 2025, open for public feedback until October 31, 2025. These rules, framed under Section 19 of the PROG Act, 2025, aim to promote legitimate online gaming formats such as e-sports and online social games, prohibit harmful online money games, protect users—especially minors, and establish a transparent regulatory framework to govern the rapidly growing online gaming sector in India.

Key Provisions of PROG Rules, 2025

Promotion of E-sports and Social Games

1. E-sports: Promotion and oversight are assigned to the Ministry of Youth Affairs and Sports.

2. Online social games: Overseen by the Ministry of Information and Broadcasting, which can issue guidelines for content that is age-appropriate, recreational, educational, or skill-based.

3. Registration: Voluntary for online social games, allowing them to operate without mandatory registration while encouraging transparency and accountability.

Establishment of the Online Gaming Authority of India (OGAI)

1. A corporate body with civil court–like powers, capable of conducting inquiries, summoning individuals, and functioning digitally.

2. Responsibilities include classifying online money games, registering games, issuing directions, and imposing penalties.

3. Decisions are appealable to an Appellate Authority within 30 days, ensuring checks and balances.

Composition of OGAI

1. Chairperson: Ex officio Additional Secretary or Joint Secretary from MeitY.

2. Five ex officio members: Representing Information & Broadcasting, Youth Affairs & Sports, Financial Services, and two other members (one with legal expertise).

3. Secretary (Director rank) assists the Authority.

4. The Chairperson may consult experts to support OGAI’s functions, ensuring specialized inputs in decision-making.

Proceedings of OGAI

1. Meetings can be held physically or digitally, with a one-third quorum.

2. Decisions made by majority; the Chairperson has a casting vote in case of a tie.

3. Members with personal interest must abstain.

4. In emergencies, the Chairperson may act immediately but must report to OGAI within seven days.

5. Proceedings remain valid despite procedural irregularities, vacancies, or defects that do not affect merits.

Determining an Online Money Game

1. An online money game involves monetary deposits, wagering, or winnings convertible to money.

2. Once identified, OGAI can order its cessation, prohibit related advertising, initiate enforcement action, and publicly list it on its website.

Registration Framework

1. Providers must submit digital applications detailing game description, target age group, revenue model, user safety, and grievance mechanisms.

2. E-sports require prior recognition under the National Sports Governance Act, 2025 for registration.

3. Applications are processed within 90 days, with OGAI authorized to request additional information.

Certificate of Registration

1. Valid for up to five years.

2. Games cannot be advertised as registered without a valid certificate.

3. Certificates can be surrendered early, subject to accrued liabilities.

Material Change Reporting

1. Providers must report changes affecting the nature, features, or revenue model of the game.

2. This prevents unregulated evolution of games into prohibited online money games.

3. Applies to both e-sports (including changes in recognition status) and online social games.

Suspension, Cancellation, and Penalties

1. Registrations may be suspended or cancelled for material changes, repeated violations, false information, or legal non-compliance.

2. OGAI can impose penalties Suo moto or on complaints, considering user harm, unfair gains, repeated violations, with sanctions including fines, suspension, cancellation, or prohibition.

3. Resolution of penalties is aimed within 90 days, with funds credited to the Consolidated Fund of India.

Grievance Redressal Mechanism

1. Three-tier system:

   1. Every provider must maintain a functional grievance mechanism.

   2. Users can appeal to the Grievance Appellate Committee within 30 days; resolution aimed within 30 days.

   3. Further appeal to OGAI within 30 days; OGAI can issue directions, corrective measures, or penalties.

National Online Social Games and E-Sports Registry

1. OGAI maintains and publishes a registry of all registered games and service providers, along with a list of identified online money games, promoting transparency and user awareness.

Transitional Provision for User Funds

1. Financial institutions can return user funds collected before enforcement of the Act within 180 days, without treating the repayment as facilitating online money gaming.

2. Ensures smooth financial closure of pre-existing obligations.

Annual Report Requirement

1. OGAI must prepare a comprehensive annual report detailing its activities, submit it to the Central Government within 180 days of the financial year’s end, and authenticate it through a meeting of OGAI, ensuring administrative accountability.

Growth of Online Gaming in India

The online gaming sector in India has emerged as one of the fastest-growing segments of the country’s digital economy, fueled by affordable smartphones, cheap mobile data, and a predominantly young population. India ranks among the largest online gaming markets globally in terms of user base, with over 500 million gamers in 2023, projected to surpass 650 million by 2025. Despite its vast potential, the industry is heavily dominated by Real Money Gaming (RMG), including fantasy sports, rummy, poker, and similar platforms. In 2023, the online gaming revenue in India was estimated at around ₹16,000 crore, with RMG contributing 80–86% of this revenue. Non-monetary games such as casual, educational, and e-sports form a smaller but steadily growing segment. The RMG sector contributes approximately ₹20,000 crore annually in GST, attracts ₹25,000 crore in investments, generates employment for nearly two lakh people, and supports over 400 companies.

Why the Ban Was Imposed

Despite the sector’s economic significance, the dominance of RMG has raised serious social concerns. Addiction and massive financial losses are widespread, with an estimated 45 crore Indians collectively losing about ₹20,000 crore each year on real-money gaming platforms. Mental health issues, including suicides linked to gambling debts, have been reported, such as the 32 cases recorded by Karnataka police in just 31 months. Furthermore, the industry structure is distorted, as 86% of online gaming revenues are concentrated in RMG platforms, leaving little room for creative or educational games to thrive.

Regulatory and Structural Challenges

The online gaming sector has faced multiple regulatory challenges. Ambiguities in the “skill versus chance” distinction allowed quasi-gambling apps to flourish unchecked. The sector’s fragility became evident in 2023 after a 28% GST imposition led to major losses, layoffs, and investor exits. Many RMG platforms relied more on tax loopholes and user losses than genuine innovation. Additionally, investigations revealed that some platforms were being misused for terror financing and illegal messaging, posing national security risks. Though gambling and betting are restricted under laws such as the Bharatiya Nyaya Sanhita, 2023, and various state legislations, the online space remained largely unregulated until recent measures closed these loopholes.

Significance of the Ban

The ban on RMG platforms is significant for multiple reasons. It aims to protect vulnerable populations from compulsive gambling, debt accumulation, and related suicides. It also corrects market distortions by shifting focus from RMG to creative, skill-based, and export-oriented games. Regulatory clarity is another key benefit, resolving ambiguities in the skill versus chance debate and simplifying enforcement. Social welfare is also addressed, as the ban safeguards household savings, reduces predatory advertising, and curbs associated crimes. Additionally, the government plans to promote e-sports as a legitimate sport and support social and educational games that foster skills, cultural knowledge, and creativity.

Regulations Governing Online Gaming in India

India’s online gaming sector is governed by multiple regulatory frameworks:

• Information Technology Act, 2000: Along with the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, it requires intermediaries to prevent unlawful content, register money gaming platforms with self-regulatory bodies, and empowers the government to block illegal websites or apps. Between 2022 and 2025, over 1,500 gambling and betting websites were blocked under this provision.

• Bharatiya Nyaya Sanhita, 2023: Sections 111 and 112 penalize unlawful economic activities and unauthorized gambling, prescribing imprisonment of 1–7 years and fines.

• Integrated Goods and Services Tax Act, 2017: Regulates illegal and offshore gaming platforms, requiring registration under the Simplified Registration Scheme. The Directorate General of GST Intelligence can block non-compliant platforms.

• Consumer Protection Act, 2019: Prevents misleading advertisements and empowers the Central Consumer Protection Authority to penalize influencers and celebrities endorsing betting platforms.

Global Lessons: Inspiration from Finland

Globally, India can learn from Finland, which has built a globally competitive gaming ecosystem despite its small population. Finland hosts over 250 gaming studios, generates more than €3 billion in turnover, and has produced international hits through companies like Supercell and Rovio. Its success stems from an export-led, talent-dense, and innovative ecosystem, achieved entirely without money-based gaming apps. India’s gaming sector should adopt a similar approach, focusing on creativity, skill-based games, intellectual property, and global exports rather than relying on RMG platforms that erode household savings and social welfare.

Conclusion

The PROG Rules, 2025 provide a comprehensive regulatory framework to govern online gaming in India. By balancing promotion of legitimate gaming formats with protection against harmful online money games, the rules aim to ensure user safety, transparency, and accountability, while encouraging e-sports and online social games as safe recreational and skill-based platforms. The creation of OGAI, registration processes, grievance redressal mechanisms, and public registries reflects a systematic, modern approach to managing a rapidly evolving sector.