5 massive takeaways from draft on-line gaming legislation: penalties, jail and authority powers

The Centre on Thursday notified the draft Promotion and Regulation of Online Gaming (PROG) Rules, 2025, setting out a complete framework for regulating on-line gaming beneath the just lately enacted PROG Act that bans on-line cash video games.

The ministry of electronics and IT has invited feedback and suggestions from stakeholders till October 31.

Officials mentioned the draft was initially deliberate to be issued with out session. “We changed our minds due to requests from stakeholders,” a ministry official mentioned as reported by HT earlier. Here are 5 key takeaways from PROG act 2025 draft.

1. Creation of Online Gaming Authority of India

At the core of the draft guidelines is the institution of the Online Gaming Authority of India, envisioned as a statutory company physique with powers akin to a civil courtroom, in keeping with the explanatory observe issued Thursday.

The authority will register on-line social video games and e-sports, preserve a nationwide registry of authorized video games, and resolve whether or not a recreation qualifies as a professional providing or a web-based cash recreation.

Any recreation involving wagering, stakes or winnings convertible into money will probably be deemed a web-based cash recreation and prohibited. The authority may even have the facility to droop or cancel registrations, impose penalties, and direct banks and repair suppliers to dam illegal platforms.

2. Structure and powers of the regulator

Headquartered within the National Capital Region, the authority will probably be chaired by an officer of at the least joint secretary rank within the IT ministry, equal to extra secretary.

As per the draft, it should embrace three ex officio joint secretary members representing the I&B ministry, the youth affairs and sports activities ministry, and the monetary providers division. Two ex officio members on the director stage may even be appointed, with at the least one possessing authorized experience.

The authority can have quasi-judicial powers, together with summoning people, analyzing proof, and issuing binding orders. A secretary, appointed by the Centre, will help with day-to-day features. Non-official specialists could also be invited and will probably be paid allowances as per authorities norms.

3. Registration and grievance redressal

Both e-sports and social video games would require obligatory registration with the authority. A certificates of registration will probably be legitimate for as much as 5 years.

The absence of certificates will stop the sport’s operation, illustration or commercial as a registered providing.

To safeguard customers, the principles mandate that platforms present a grievance redressal system. Users dissatisfied with a platform’s response can enchantment first to a grievance appellate committee after which escalate to the authority, which should resolve circumstances inside 30 days.

4. Transitional provision for consumer funds

The draft features a transitional clause for funds collected earlier than the Act’s enforcement. Banks or intermediaries could refund quantities as a consequence of gamers with out it being deemed assist for unlawful cash gaming. This window will stay legitimate for 180 days from the date of enforcement.

5. Offences and penalties beneath the Act

The PROG Act prescribes stringent punishment for violations. Offering on-line cash gaming providers could appeal to as much as three years’ imprisonment and fines of as much as ₹1 crore. Advertising such platforms may result in two years’ imprisonment and fines as much as ₹50 lakh.

According to the draft, authorised officers can have the facility to go looking, seize and arrest with out warrant. It additional clarifies: “Notwithstanding anything contained in the Bharatiya Nagarik Suraksha Sanhita, 2023, offences under section 5 and section 7 shall be cognizable and non-bailable.”

Section 5 prohibits firms and people from providing, aiding, abetting, inducing or partaking in on-line cash video games. Section 7 restricts banks, monetary establishments, or intermediaries from enabling associated transactions.

Legal safety has additionally been prolonged to officers enterprise searches and seizures beneath the Act.