Why The Online Gaming Act, 2025 Is The Right Move

Rise Of Online Gaming And The Crisis It Unleashed

When online gaming first entered India, one could not have imagined the scale at which it would transform and impact the society. What began as light entertainment soon turned into a booming industry. The technological advancements, cheap internet and launch of UPI payments gave rise to online money games. Initially, they were perceived as a recreational activity but over time, a dark reality emerged. 

One such story is of a young woman caught up in pathological gaming addiction. It began as a casual pastime but soon turned into a spiraling debt. She joined the platform on the basis of a social media advertisement featuring a popular actress. At first, it was just a break from work and would only be played when the day's work was over. However, the adrenaline rush from winning ₹2 lakhs against ₹5,000 investment kept her hooked. The bonus offered on recharge tempted her to take loans as hefty as ₹7 lakhs from friends and family to the point that her father’s life savings got drained. Like many trapped in real money games (RMGs) she kept on believing that a big win was just around the corner. However, the stress of repayment soon took over, and she attempted suicide but fortunately was saved by her family.

Sadly, her story is not unique. Across India, countless lives have been ruined due to participation in RMGs leaving behind a trail of empty accounts, loss of life savings and broken families. In Mumbai, a man lost ₹12 crore to online money games. While in another case, a young IIM educated couple separated because of the husband's inability to control gaming addiction who not only exhausted their savings but also stole from his wife’s account. 

What makes these stories even more tragic is the cycle of false hope the victims are trapped in. They often know the futility of their actions, yet remain trapped in the obsession of chasing a jackpot. A 35-year-old farmer, for instance, has logged into more than 19,500 games, spending ₹2,000–₹3,000 every day in a desperate attempt to win back the ₹1.5 lakhs he once lost. Though he admits the odds are against him, he simply cannot stop. This pattern of obsessive gaming is not just a personal tragedy. It often gives rise to secondary crimes such as theft, cheating and in extreme cases even violence against themselves and their own family.

Grim Reality Of RMGs As Shown By Data

The numbers reveal the true scale of the crisis. A rough estimate by the Government suggests that 45 crore people have been negatively impacted and more than ₹20,000 crore have been lost due to online money games. Moreover, the IT Minister highlighted the evidence showing that the gaming platforms are so designed that a player cannot remain a net winner. A 2023 Parliamentary Panel Report further flagged misuse of gaming portals for terror funding, while the Defence Ministry’s think tank exposed how the Chinese app FIEWIN defrauded Indians of ₹400 crore through mule accounts and cryptocurrency wallets. Financial probes also revealed massive tax evasion, with the ED uncovering GST frauds worth ₹30,000 crore and a 2022 report pointing to another ₹2,000 crore in evasion by gaming companies.

Furthermore, the addiction to RMGs also points towards a larger public health concern. The World Health Organisation (WHO) has classified gaming disorder as a health condition in its International Classification of Diseases. It also associates RMGs with compulsive behavior, psychological stress, financial difficulties, and disruptions to family life. Gambling harms go beyond money losses, it often leads to debt, family problems, violence, depression, and even suicide. Many gamers also suffer from other mental health issues like anxiety, substance abuse, or depression, facing more than one issue at a time. These risks are especially high among young online gamblers, who also face a greater chance of suicidal thoughts or actions.

Rationale Behind The Act

The Promotion and Regulation of Online Gaming Act, 2025 came as a response to this crisis. The Act does not impose a blanket ban but rather categorises online games into three categories:  E-sports, Social gaming and Real Money Games (RGMs). It endeavours to build a framework that promotes E-sports and Social Gaming and recognizes them as a legitimate form of competitive sport. 

However, the Act seeks to impose a complete ban on the RGMs which includes games of chance, skill and a combination of both. It further prohibits the advertisement and promotion of such games and the Financial transactions related to these platforms cannot be processed by banks or payment systems.

Analysing Criticism Through Lens Of Social Welfare 

The Act seeks to redress all these concerns mentioned above yet it has drawn criticism and has been called “draconian”. An Indian Express piece even states that it violates the Supreme Court’s Puttaswamy verdict on privacy and autonomy. 

However, these arguments are misplaced to say the least. The opponents claim that a blanket ban violates the test of proportionality and that the right to privacy affirmed in the Puttaswamy judgement includes the right to choose the form of recreational activity under Article 19 and 21.  However, if one were to analyze these arguments against the jurisprudence contained in the judgement, one would realise the absurdity of these claims. 

The Puttaswamy judgement primarily dealt with state intrusion in personal data and decisional autonomy. The safeguards defined under the judgement are completely different from the regulatory powers of the state. The state has always strived to regulate consumption of harmful substances such as liquor, smoking etc. and the same has been permitted as a reasonable restriction under Article 19. To argue that an injunction against state interference will prevent or prevent the ability of the state to regulate a sector, especially the one with as much social harm as online gambling, is unfounded.  

The ban is rooted in the need to protect public health given the documented link between online gambling, addiction, financial ruin, and suicides. 

The social risk involved in the management of the online gambling sector is not to be underplayed. That this issue was becoming a larger problem and concern was evident from the fact that Assam, Andhra Pradesh and Tamil Nadu all attempted to place a similar ban on RMGs due to similar social concerns. The Supreme Court itself had recently sought response from the Center and all the states over regulation of online betting apps, calling it a matter of “public importance”. 

In the 60s, the court itself had decided in State of Bombay v. R.M.D. Chamarbaugwala that gambling was a ‘res extra commercium’, i.e., things outside of commerce. This means gambling is not a constitutionally protected trade or business and that the state is empowered to regulate or prohibit it. This may very well come under the broader challenge to Online Gaming Act as well, but the fact remains that Gambling is a well-recognised social ill. 

Striking a Balance Between Innovation and Social Harm

Many have also argued that the Act may hurt the start-ups along with risking jobs in the sector. More than a few online commentators or even op-eds have blamed the Government or the ‘Babudom’ for ‘destroying’ an entire sector overnight. These critics are missing the forest for the trees to say the least. The sector’s boom was always hinged on the regulatory approach that the state and centre would have taken. 

While the IT Rules, 2023 had provided for the creation of a Self-Regulatory Bodies (SRBs) for the sector, none were formed. The hike in GST rates had also indicated that the sector was not being considered as “just another sector” considering the external harms involved in the money flowing into the sector. 

The Act has clearly come about as a result of the Government recognising the larger social harm emanating from the sector, which had grown unrestrained despite the attempt to offer self-regulation and increased taxation. The political pressure on the government to act on the sector was clearly growing day-by-day. That the Supreme Court had entertained two PILs on the sector in the past few months is an indication of the same. The politically important states of Tamil Nadu and Andhra Pradesh banning it is another indication of how the issue of the harm caused by the apps was becoming a political hot potato. 

A state should not be governed only by the metric of economic growth but also the social and cultural amity. The act strikes a clear balance by targeting only gambling based platforms and does not affect e-sports, AI sector and the broader gaming industry.  The Act is not merely a regulatory intervention but a welfare measure aimed at safeguarding society from the destructive impact of real-money online gaming without restraints.