Online Gaming Bill 2025: Companies warn of massive job cuts, closures — a look at industry size, impact

The online gaming industry is up in arms over the Promotion and Regulation of Online Gaming Bill, 2025, which aims to ban all real-money games, including skill-based ones. Industry insiders warn that this sweeping ban could cripple the sector, leading to over 20,000 job cuts and forcing more than 300 companies to close their doors.

The move, they say, puts the future of one of the country’s most dynamic digital industries at serious risk. The 14-page bill drafted by the Union Ministry of Electronics and Information Technology (MeitY) was tabled in the Lok Sabha on Wednesday, 20 August, by Minister of Electronics and Information Technology Ashwini Vaishnaw.

It describes “online money game as 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”.

‘Around 50% of franchise sports leagues may be closed’ 

“There are more than 20,000 current jobs at risk, with a possibility of over 300 companies shutting down. Around 50% of franchise domestic/national level sports leagues may be closed and sponsorship revenue loss for teams & leagues could range from 30 to 40%,” an industry source told LiveMint.

The source added, “Non-cricket & grassroots sports may collapse without real money gaming advertisers. The impact of it could lead to a decline in ad spends, with lower sports broadcasting/media revenues.”

According to venture capital firm Lumikai, the Indian gaming market is valued at $3.8 billion and could increase to $9.2 billion by 2029. It reportedly employs more than 130,000 skilled workers.

“The industry has been consistent in voicing its primary concern: that a blanket ban equates legitimate, regulated, skill-based gaming platforms with predatory gambling models. Overregulation through a blanket ban could stifle innovation in a sector where India has the potential to lead globally,” Ganesh Prasad, Partner, Khaitan & Co told Livemint.

He added, “From a policy standpoint, it’s also worth noting that predictability and stability in regulation are critical for investor confidence. Sudden prohibitions without a clear long-term roadmap risk deterring capital and talent from entering India’s gaming ecosystem.”

While drawing a comparison between India and US on opinion trading, Anurag Dhandhi, Business Head at Probo said it has been “characterised as game in India; however in the US it has been regulated by the Commodity Futures Trading Commission as a Designated Contract Market - or in layman’s terms - a financial market for information exchange and trading”. 

“At its very core, opinion trading (prediction markets) is a tool for economic insight, information aggregation, and forecasting that enables users to apply judgment, knowledge and analysis to real-world developments. By fostering informed and responsible participation, it goes beyond entertainment,” he further said in a press release.

He added, "It is a nascent-yet-thriving sector globally that contributes to improving financial literacy, data-driven decision-making and strengthening the larger digital economy. While we applaud the government’s intent to introduce a progressive framework, we urge the government to build on this vision by explicitly recognizing opinion trading as a permissible skill- based activity and by adopting a differentiated regulatory approach instead of a blanket prohibition. This will strengthen user protection while ensuring that India fully captures the socio-economic benefits of this sunrise sector.”

Why is Centre bringing Online Gaming Bill 2025?

The government said the rapid increase of online money games has “deleterious effect on families, society, and the economy” and further noted that in certain cases, these platforms have been linked to illegal activities like money-laundering, financial fraud, the financing of terrorism, and use as messaging platform for terrorist and terrorist organisations, which poses risk to the security and sovereignty of the state.

The ministry, in the proposed law, said “the immersive and addictive nature of online games, particularly with monetary incentives, has led to significant mental health issues among users — especially children, adolescents and young adults", adding that “clinical evidence and field studies have shown a rise in anxiety, depression, sleep disorders, and behavioural problems linked to prolonged gaming”.

The government is set to impose a ban on the offering of online real-money games by any person. Non-compliance with this regulation could lead to a prison sentence of up to three years and a fine of ₹1 crore. Additionally, those involved in promoting these platforms, including social media influencers, may face up to two years of imprisonment and a penalty of ₹50 lakh.

The bill comes against the backdrop of the Centre's move to levy a 40% Goods and Services Tax (GST), up from 28%, on online gaming in the revamped regime around Diwali.