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Online Gaming Regulation Act, 2025
Context:
The Promotion and Regulation of Online Gaming Act, 2025 was passed by Parliament to ban Real Money Games (RMGs) while promoting e-sports and social gaming.
Key Features of the Act
- Three categories of online games: e-sports, social gaming, and Real Money Games (RMGs).
- RMGs banned: includes poker, rummy, fantasy cricket, and similar games, irrespective of skill or chance.
- E-sportsrecognised under the National Sports Governance Act, 2025.
- Social gaming encouraged for educational and recreational purposes with budget allocation from the Consolidated Fund of India.
Regulation and Enforcement
- Offering Real Money Games(RMGs): Punishable with up to 3 years imprisonment or ?1 crore fine.
- Advertising RMGs: Punishable with up to 2 years imprisonment or ?50 lakh fine.
- Offences:Cognisable and non-bailable under the BharatiyaNagarik Suraksha Sanhita (BNSS), 2023.
- Enforcement:CERT-IN empowered to block apps, with possible involvement of Interpol for offshore platforms.
- Players: No penal action prescribed.
Concerns and Criticisms
- No distinction between games of skill and games of chance, which courts have previously recognised.
- Conflict with Article 19(1)(g) – Right to Trade and Occupation.
- Overlap of jurisdiction: Entries 34 and 62, State List (7th Schedule) grant States power to regulate betting and gambling.
- Loopholes: Possible bypass through VPNs and offshore operations.
Economic, Social and Security Dimensions
- Estimated ?15,000 crore losses annually due to Real Money Games(RMGs).
- WHO links RMGs to addiction, financial distress, and suicides (32 suicides in Karnataka in 31 months).
- Industry concerns: Ban may threaten 2 lakh jobs across 400+ companies.
- National security: Reports of terror funding, tax evasion (?30,000 crore GST fraud), money laundering, and use of cryptocurrency via gaming firms.
Judicial and Taxation Aspects
- SC rulings:Rummy and Fantasy Sports involve skill and are not pure gambling.
- 2023 GST reforms: Online gaming taxed at 28% GST similar to casinos and horse racing.
- Pending SC judgment: Classification of RMGs as gambling vs. skill-based activity, and validity of retrospective GST levy.
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