RMG faces complete ban, what does it imply for gaming giants and 591 million gamers

The authorities has launched the Promotion and Regulation of Online Gaming Bill, 2025, within the Lok Sabha, which is being termed because the demise knell for round 1,700 startups working within the on-line cash gaming or real-money gaming house (RMG), together with these involving the usage of talent. The invoice bans anybody providing on-line cash video games and on-line cash gaming providers, which virtually impacts all the large firms working within the area, together with Dream 11, Mobile Premier League (MPL), WinZo, Zupee (Ludo), BaaziGames, My11Circle and lots of extra.

The draft invoice additionally bans real-money gaming adverts, and even advertisers may face sanctions for permitting these adverts. This immediately impacts huge gamers who splurge huge cash into commercials throughout main occasions just like the Indian Premier League (IPL). To make it even more durable for firms to facilitate transactions on their platforms, the brand new legislation bans banks and different monetary establishments from permitting monetary transactions on the platforms with regards to real-money gaming. There’s additionally a provision for the formation of an authority that may oversee the businesses working within the area; thus far, the web gaming business has had self-governing our bodies. Companies must apply to make sure their authorized standing. The company may even look into the business’s points and deal with their complaints and grievances.

The firms working within the RMG house or on-line cash gaming service shall be jailed for as much as three years or fined as much as Rs 1 crore. The new legislation additionally gives a penalty and jail time period for placing RMG adverts, and banks permitting monetary transactions. The new legislation empowers authorities to conduct searches and arrests with out warrants and makes these offences “non-bailable”.

What will occur to the way forward for RMG gamers?

The RMG sector is a large income generator within the on-line gaming house, with round an 85% share in income in 2024 alone. In the subsequent 4 years, it may hit $9 billion and unlock funding price $63 billion, as per the information in WinZO Games’ report this 12 months. India’s gaming business is prospering, with round 591 million customers or 20% of the world’s avid gamers, although it solely contributes 1.1% of the worldwide gaming income. The ban on RMG entities may wipe out these positive aspects except these firms give you different options to spice up their revenues.

The blanket restrictions on sure real-money video games could stifle segments of the gaming market that had been beforehand producing important income, significantly in cell gaming and tournament-based platforms, says Ananay Jain, Partner, Grant Thornton Bharat. “Smaller start-ups and emerging developers may face compliance burdens and financial strain due to penalties and regulatory requirements. Additionally, the Bill could slow the pace of certain innovations in skill-based monetised platforms, as companies navigate a complex legal landscape.”

Companies like Dream 11, MPL, Games 24*7, Zupee, and WinZO have their whole enterprise mannequin round video games the place a person places in a specific amount to play a sure sport within the hope that in the event that they win, they might hit a jackpot. Dream11 alone is India’s largest fantasy sports activities platform with 55% market share and 200 million customers. Likewise, MPL instructions round 15-20% share in fantasy sports activities, informal and board video games.

These firms typically flood social media and TV channels with adverts claiming huge wins, particularly for people who find themselves within the smaller strata of society. The authorities believes this encourages even those that are poor to take part in such video games within the hope of a giant win. These firms supply an array of on-line cash video games, together with cricket, different sports activities, and informal video games like rummy, poker, and so on., the place profitable cash is feasible.

What do stakeholders say?

Calling it a demise knell, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF) and the Federation of India Fantasy Sports (FIFS), the three organisations collectively signify nearly the whole lot of the web skill-gaming business in India, has known as it a “death” blow to the dawn business, which gives round 2 lakh direct and oblique jobs.

“Banning RMG may also have an impact on people employed in the gaming sector. Gaming companies have been subject to a 28% GST levy in the past. But the bill indicates a move from regulating to banning, when it comes to RMG,” says Vikram Jeet Singh, Partner at BTG Advaya, a full-service legislation agency that operates from Mumbai, Delhi and Bengaluru.

Contrary to the federal government’s claims of hurt being brought on by RMG entities, these associations consider the invoice, if handed, will trigger critical harm to Indian customers and residents, as it is going to encourage an increasing number of gamers into the arms of unlawful “matka” networks, offshore playing web sites, and fly-by-night operators. These illegitimate entities neither function with any safeguards nor do they pay any taxes to the federal government. The associations have mentioned that as a substitute of defending individuals, the Bill dangers exposing them to fraud, exploitation, and unsafe practices, and thus posing a risk to India’s nationwide safety.

The associations consider the invoice, in its current kind, solely advantages the unlawful offshore playing operators. “If legitimate Indian businesses are shut down, unregulated actors will fill the vacuum. This will erode state and national tax revenues while leaving Indian users exposed to unregulated platforms,” the latter submitted by the gaming associations to Prime Minister Narendra Modi reads. They have additionally sought a chance to current their case and supply options that promote a secure gaming expertise.

Rather than making use of a blanket ban, the federal government’s strategy needs to be “calibrated”, Anuraag Saxena, CEO, E-Gaming Federation, instructed Fortune India. This, he mentioned, may ship higher outcomes than full restrictions, agreeing that the present legislation may “nudge users towards unregulated offshore platforms”. Calling the invoice “extremely problematic”, Jay Sayta, one of many high expertise & gaming attorneys, says that, prima facie, the draft invoice appears “unconstitutional” and unsustainable. Explaining that “betting and gambling” in addition to “amusements and entertainments” are squarely state topics, Satya mentioned: “Parliament has no legislative competence to enact laws on the subject; except under Article 252 of the Constitution where two or more state legislatures expressly pass a resolution and allow parliament to enact a law on the subject.”

The invoice, for now, has been tabled within the Lower House. With the business utterly towards the ban on RMG, it stays to be seen how a lot the federal government is prepared to offer in to their calls for.