The Online Gaming Act 2025: meaning, how it works in India

The Promotion and Regulation of Online Gaming Act 2025, often shortened to PROGA, is a central law that divides online games into three groups: e-sports, online social games and online money games. It promotes the first two and prohibits the third.

An online money game, in simple terms, is one where a player puts in money or something of value in the hope of winning money or a similar reward. The Act does not ask whether the game depends mostly on skill or on chance. That is why it affected real-money rummy, poker and fantasy formats that earlier argued they were games of skill.

Real-money gaming grew quickly in India during the 2010s and 2020s, and with it came complaints about addiction, debt and fraud. States passed their own bans, courts debated the line between skill and chance, and the central government applied a 28% goods and services tax on the full value of bets from October 2023.

In August 2025 Parliament passed the new Act, and the government published draft rules for consultation in October 2025. According to press and law-firm coverage, final Rules were notified in April 2026 and took effect from 1 May 2026, together with the commencement of the prohibition chapter and the penalties. Court challenges to the Act were reported, and readers should check the current status of those cases.

It bans offering, running or facilitating online money games, and bans advertising them. It also bars banks, payment companies and other financial intermediaries from processing payments linked to such games. The aim is to cut the business at its source of money, not only at the app.

It allows e-sports, which are organised competitive video games, and online social games that do not involve staking money. E-sports are to be recognised and supported by the government, and the Rules require registration for them according to law-firm summaries.

• Online money games: prohibited.
• Advertising or promoting money games: prohibited, including by celebrities.
• Payment processing for such games: prohibited for banks and payment providers.
• E-sports: promoted and registered.
• Online social games: allowed, with no real-money stake.

The Act creates a national regulator, the Online Gaming Authority of India, described in summaries as a body under the Ministry of Electronics and Information Technology (MeitY). It decides whether a game counts as an online money game, keeps the register of e-sports and can hear complaints and order action against a platform.

Under the Rules, the Authority uses a determination test to classify games, and registration is required for notified games and for e-sports. Complaints are to be handled digitally and, according to one summary, within 90 days. The finer details of classification and appeal are in the Rules, so check the latest text.

According to law-firm summaries, offering or running an online money game can lead to up to three years in prison, a fine of up to ₹1 crore, or both. Advertising such a game can lead to up to two years and a fine of up to ₹50 lakh. Repeat offences are punished more severely, and some summaries say that payment intermediaries that knowingly process such transactions can also be liable.

Summaries differ on how players themselves are treated, so this guide does not state a player penalty. Anyone affected should read the Act and take professional advice.

Companies whose main product was a real-money game had to shut that product, change it or move it to a non-money version. Startups tied to the sector, such as game studios, payment gateways, influencer agencies and ad networks, lost a revenue line. Investors had to mark down or write off stakes where the business depended on money games. Some well-known companies pivoted to e-sports, social games and other consumer products.

Other sectors learned a general lesson: a law can change a business model overnight, and an earlier court ruling in favour of a business does not protect it from a new statute. Due diligence on consumer-internet companies now asks how much revenue depends on a legal grey area. The related guide on fantasy sports after the gaming law covers the sector in more detail.

The Act reaches beyond game operators. Payment gateways, banks and wallets must not process payments for a prohibited game, and the Rules expect them to act on directions from the regulator. A payment startup that earlier served gaming merchants had to review its client list and its risk controls, because processing a banned game's payments can bring penalties of its own.

Advertising is covered too. Brands, agencies, influencers and media platforms cannot promote an online money game. The regulator can order a takedown of an advertisement, and the penalty for advertising is lower than for running a game but still includes prison and a fine, according to law-firm summaries. Sponsorship deals that once funded sports and entertainment shows had to be dropped or restructured.

The Act does not only prohibit. It states a policy of promoting e-sports as a legitimate sport and encouraging safe social games. E-sports are to be recognised and registered, and the government can support training, research and events. That gives a clear legal home to tournaments, teams, streamers and game publishers that never involved real-money stakes.

Founders who want to stay in gaming have three broad routes: free-to-play games earning from ads and in-game items that are not tied to winning money, e-sports organisation and content, and games sold abroad. Each has its own risks, such as the question of whether an in-game item can be turned back into cash. The Authority's classification decides such cases.

The goods and services tax change of 2023 taxed money games, while the Act of 2025 prohibits them. State bans were limited to one state and often struck down in court, whereas this is a central law that applies across India. It also reaches advertising and payments, which earlier rules did not.

This guide is general information and not legal advice. The law, the Rules and court cases may change, so check the current text or ask a professional.