The legislation prohibits offering, promoting, or facilitating online money games and imposes penalties up to ₹1 crore, jail terms up to five years, or both, with repeated offenders facing ₹2 crore fines.
The government is set to introduce a bill, ‘The Promotion and Regulation of Online Gaming Bill’, on Wednesday to ban online money games and regulate online social games and esports.
The bill says ‘online money game’ means 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.
Definition of online social games
At the same time, an ‘online social game’ refers to an online game that does not involve the staking of money or other stakes, nor participation with the expectation of winning monetary gain in return for money or other stakes. Such a game may allow access through the payment of a subscription fee or a one-time access fee, provided that such payment is not akin to a stake or wager. Additionally, it is offered solely for entertainment, recreation, or skill development purposes.
“No person shall offer, aid, abet, induce or otherwise indulge or engage in the offering of online money game and online money gaming service,” the provision of the bill said. Further no person shall make, cause to be made, aid, abet, induce, or otherwise be involved in the making or causing to be made any advertisement, in any media including electronic means of communication, which directly or indirectly promotes or induces any person to play any online money game or indulge in any activity promoting online money gaming.
Financial transactions restrictions
“No bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce or otherwise facilitate any transaction or authorisation of funds towards payment for any online money gaming service,” another provision said.
Penalties for violations
Penalty for contravention will lead to a penalty of up to ₹1 crore, jail term of up to 5 years or both. A repeated offender could be fined ₹2 crore. “Where an offence has been committed by a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of that part of the business of the company as well as the company, shall be liable to be proceeded against and punished accordingly,” the provision said.
Regarding the rationale for banning online money games, the bill states that the algorithms used in these games are often opaque and may be designed to manipulate user engagement surreptitiously. These games can also be operated by bots or undisclosed agents, undermining fairness and transparency. Reports and studies, both national and international, have highlighted the strong association between such games and compulsive behaviours, psychological distress, financial hardship, and the disruption of family and social life, thereby posing a serious public health risk.
Impact on society and security
Further, beyond the individual, the proliferation of online money games had a deleterious effect on families, society, and the economy. In certain cases, these platforms have been linked to illegal activities including money-laundering, financial fraud, the financing of terrorism, and use as a messaging platform for terrorists and terrorist organisations, thereby affecting the security and sovereignty of the State.
A plethora of online money gaming service providers operating from offshore locations often circumvent state-specific regulations, evade taxation, and create enforcement challenges related to extra-territorial concerns for domestic authorities, raising complex issues with respect to user safety, consumer protection, cross-border operations, and inter-State regulatory inconsistencies, the bill said.
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Published on August 20, 2025
