India’s Online Gaming Bill 2025 Sparks Industry Outrage, Mass Shutdowns & Investor Anxiety

New Delhi, August 22, 2025: The Indian gaming industry has been jolted by the passage of the Online Gaming Bill 2025, which imposes a blanket ban on all forms of real-money gaming (RMG) across the country. The move has triggered widespread concern among stakeholders, with industry voices warning that the prohibition will not eliminate the activity, but rather push it underground into unregulated and potentially unsafe spaces.

The law, passed earlier this week, outlaws all online games involving real-money stakes, regardless of whether they are games of skill or chance. Popular platforms such as fantasy sports, online poker, rummy, and other betting-based games are now illegal nationwide. The legislation also prohibits advertisements, financial transactions, and any form of banking support for such games. Offenders face prison terms of up to five years and fines of up to ₹2 crore, marking one of the most stringent crackdowns on the gaming sector to date.

This sweeping reform has triggered immediate consequences. Several gaming platforms have shut down operations, market stocks have dipped, and investors have raised red flags over policy unpredictability. According to estimates, the ban directly affects over 400 companies, endangers nearly two lakh jobs, and threatens billions in domestic and foreign investments.

Probir Roy Chowdhury, Partner at JSA Advocates & Solicitors, expressed concern over the long-term impact of the law. “This will harm the domestic gaming industry and undermine investor confidence,” he said. “Indian courts have repeatedly upheld the legality of skill-based games. By imposing a blanket ban, the government is sending a message that it can arbitrarily dismantle a thriving sector, regardless of legal precedent or past regulatory frameworks.”

Chowdhury also criticized the reversal of the government’s earlier approach, which supported self-regulation under the 2021 IT Intermediary Rules. “This is not just a policy change—it’s a signal to global investors that rules in India can change overnight,” he added.

Adding to the chorus of concern, Parth Chadha, CEO and Co-founder of STAN, called the government’s distinction between esports, social gaming, and RMG “historic,” but lamented the impact on real-money platforms. “It’s a tough day for our friends in the RMG industry,” he said. “These are entrepreneurs who built incredible businesses against the odds, created employment, and introduced millions to gaming. Their contributions shouldn’t be forgotten.”

Meanwhile, Anurag Dhandhi, Business Head at Probo, highlighted the challenges facing platforms offering opinion trading. Globally recognised as tools for economic forecasting and insight, such platforms are regulated under financial laws in many countries. In India, however, they’ve been lumped together with gambling. “We urge the government to differentiate opinion trading as a permissible skill-based activity and not subject it to blanket bans,” he stated. “Failure to do so could choke a sector with global relevance before it has even matured.”

The financial markets have already responded. Shares of listed gaming firms slid sharply following the Bill’s announcement. Industry giant Dream11 is reportedly preparing for mass layoffs, with internal communications confirming the shutdown of its real-money gaming vertical. Startups, in particular, now face a crucial crossroads—pivot their business models or prepare for legal battles to challenge the new law.

The government has defended the bill by citing social harms associated with real-money gaming, including addiction, financial distress, and instances of suicide among young users. A government spokesperson argued that the ban is in the interest of public health and safety, noting that the economic upside does not justify the societal costs.

As legal experts and industry leaders prepare to explore options, including constitutional challenges, one thing is clear: India’s online gaming ecosystem is entering a period of unprecedented transformation, and the path forward remains uncertain.