Online Gaming Bill cleared by the Cabinet leads to a 6% slide in Nazara Tech shares; risk to a Rs 800 crore investment in poker games - Prabhudas Lilladher report
The Online Gaming Bill, 2025, is set to transform India's gaming industry, imposing a ban on all real-money online games and establishing a national regulatory authority. The bill, if passed, could have significant implications for the sector.
Impact on the Online Gaming Sector
The ban on real-money gaming (RMG) stands to disrupt popular platforms such as fantasy sports and betting websites. Over 200,000 direct and indirect jobs are at risk, with more than 2,000 gaming startups potentially shutting down due to loss of business and investor confidence. The industry faces a potential loss of approximately ₹25,000 crore in foreign direct investment (FDI) and up to ₹20,000 crore in tax revenues for the central government.
Impact on FDI and Investment
The RMG ban threatens an estimated $6 billion in FDI annually. However, investment is shifting towards regulated e-sports and social gaming sectors, which are now government-recognized and projected to grow at a compound annual growth rate (CAGR) of 25% through 2027. E-sports infrastructure and social gaming startups are gaining traction by focusing on sponsorships, subscriptions, and skill-based competitive events without gambling elements.
Job Market Impact
The loss of jobs in the RMG segment affects both skilled professionals and startup ecosystems, raising concerns over unemployment and economic displacement. New opportunities arise in e-sports and social gaming sectors, with government support for these domains as "legitimate sports" opening avenues for employment and skill development.
Key Provisions of the Bill
The bill prohibits all games involving monetary stakes or winnings, regardless of skill or chance elements. A national authority is created for registering games, policymaking, and enforcement, replacing prior fragmented state-level regulations. Operators face imprisonment up to three years and fines up to ₹1 crore; promoters, celebrities, and financial intermediaries also face legal consequences. The bill recognizes three categories—e-sports (regulated competitive events), online social games (non-monetary educational or entertainment games), and online money games (banned). The bill applies to any platform accessible in India, mandating compliance or prohibiting operation.
Rationale Cited by Government
The government justifies the ban citing national security risks—linking online money gaming to money laundering, terror financing, and tax evasion—and public health concerns due to gaming addiction, compulsive spending, and associated social harms such as suicides linked to online gaming addiction.
The Online Gaming Bill, if passed, could significantly reshape India's gaming landscape, disrupting existing economic flows and jobs in money-based gaming but simultaneously promoting government-supervised e-sports and social gaming as growth areas. The bill is expected to be presented to Lok Sabha in a short while.
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