Online Gaming Will get Played, However Able to Play Ball

Summary: India’s new Promotion and Regulation of Online Gaming Act, 2025 promotes e-sports and on-line social gaming, whereas prohibiting skill-based on-line cash gaming. Now, with the accompanying draft guidelines, a brand new regulatory framework is in play with its personal set of advantages and challenges. This [blog post] gives an outline of the brand new guidelines of the sport, adopted by insights on the brand new act and draft guidelines.

In August 2025, the Indian Parliament notified the Promotion and Regulation of Online Gaming Act, 2025 (“Act”) to ban on-line skill-based cash gaming. This caught off-guard a sector comprising unicorns, sizeable investments, hovering revenues, and thousands and thousands of customers.

The distinction between “games of skill” and “games of chance” was erased in a single day. Yet, the business reacted with resilience, nearly instantaneously retooling their platforms and know-how and pivoting to on-line social video games and free-to-play video games, even earlier than the Act has turn into efficient.

The Ministry of Electronics and Information Technology (“MeitY”) launched the draft Promotion and Regulation of Online Gaming Rules 2025 (“Draft Rules”) on October 2, 2025, leaving it open for public session till October 31, 2025. The Draft Rules will operationalise numerous key parts of the Act and introduce the Online Gaming Authority of India (“Authority”), ushering in a brand new period of regulation for the web gaming ecosystem.

This article gives an outline of the brand new guidelines of the sport, adopted by insights on the Act and the Draft Rules.

Objective of the New Legislation

The new laws goals to:

• Encourage structured progress of professional e-sports and social gaming ecosystems;
• Establish clear standards for dedication of a web-based sport as on-line cash sport or in any other case;
• Prescribe the framework for recognition, categorisation, and registration of professional e-sports and on-line social video games;
• Mandate upkeep of National Online Social Games and E-sports Registry; and
• Create a clear, digital, and accountable regulatory framework with a sturdy grievance redressal mechanism to safeguard customers.

What’s Allowed and What’s Not!

Activity	E-sports[1]	Online Social Games[2]	Online Money Games[3]
Definition	Skill-based multiplayer, multi-sport occasions;To be recognised below the National Sports Governance Act, 2025 (“NSGA”);To be registered with the Authority;May cost participation/ registration price and award prize cash; andDoes not contain bets, wagers or different stakes.	Entertainment, leisure, or skill-based video games;May contain a subscription/entry price;Does not contain staking cash or different stakes;[4] andDoes not contain participation with expectation of profitable any financial acquire in alternate for cash or different stakes; andNot a web-based cash sport or e-sport.	Games of talent, probability or each;Played by paying person price, depositing cash or different stakes;Expectation of winnings in cash or different enrichment in return for cash; andDoes not embrace e-sports.
Permitted/Not Permitted	✅ Subject to necessary recognition below the NSGA and registration below the Act.	✅ Subject to voluntary registration below the Act.	❌
Offering the Game (together with internet hosting)	✅	✅	❌
Advertising (together with endorsements)	✅	✅	❌
Financial / Payment Partners	✅	✅	❌
Offline Versions	✅ Subject to state legal guidelines, if any.	✅ Subject to state legal guidelines, if any.	✅ Subject to state legal guidelines, if any.

Other Stakes

A notable, and plausibly the extra controversial, time period outlined below the Act is “other stakes”.

Defined as something recognised as equal or convertible to cash and contains credit, tokens, cash, or objects, or some other related factor, whether or not digital or actual, bought instantly or not directly, utilizing cash, or as part of, or in relation to the web sport. The interpretation of “other stakes” may have important impression on the permissibility of varied widespread “lawful” gaming fashions.

The State of Play: Legality Matrix

The following desk describes the legality of varied on-line social sport codecs, with and with out totally different parts:

Subscription Fee / One-Time Fee	In-Game Purchases	Prizes/ Rewards (both in-game rewards corresponding to skins, lives, and many others., or cash-out rewards corresponding to cash, coupons, vouchers, and many others.)	Legal Status
No	No	No	✅
No	No	Yes	✅ No cash in/different stakes in = no staking or wagering.
Yes	No	No	✅
Yes	No	Yes	Requires fact-based assessment of the sport.To be examined if use of the Subscription Fee / One Time Fee leads to “other stakes”.
No	Yes	No	✅
No	Yes	Yes	Requires fact-based assessment of the sport.To be examined if use of “other stakes” in-game is a wager to additional obtain “other stakes”.Could be lawful if the prize received is in the type of in-game rewards, with no money out possibility.

Whether an Online Game is an Online Money Game

As per the Draft Rules, the Authority might decide whether or not a web-based sport is a web-based cash sport or in any other case, both suo moto or based mostly on an utility made by the web sport service supplier[5] to the Authority.

The Authority might inter alia use the next baseline ideas (independently or collectively) for such dedication:

• Does the web sport contain cash or different stakes (within the type of charges, deposits, in-game purchases) that operate as a stake or wager?
• Are person funds (charges / deposits) handled as participation price, or as a stake / wager, or consideration for winnings?
• Is participation within the on-line sport contingent on a previous deposit of cash or different stakes?
• Does the web sport supply rewards, or payouts in cash or equal/convertible to cash that may be redeemed or encashed?
• Any different related elements that the Authority might deem obligatory to contemplate. [6]

Registration

Registration is necessary for e-sports however non-compulsory for on-line social video games. The course of, necessities, and timelines are as follows:

Game Type	Application Details	Determination Requirements	Timelines for Registration	Material Change Notification
E-Sports	Application to incorporate: Name and make contact with particulars,Description of sport,Category of sport,Age group,Revenue mannequin,User security options,Internal grievance redressal mechanism,An enterprise confirming that no prohibited exercise is/ being undertaken, andAny different particulars as deemed obligatory by the Authority.	Determination of a web-based sport as an e-sport is completed by the Authority.Recognition to be first obtained below the NSGA, adopted by registration below the Act.	90 days from date of submission of the applying, with the Authority. Time taken to acquire recognition below NSGA is excluded from the aforementioned timeline.	Material Change[7] to the registered e-sport or change in standing of recognition of such e-sport below the NSGA must be knowledgeable to the Authority.
Online Social Games		Authority to evaluate if the web sport qualifies as a web-based social sport. Authority might have interaction in such dedication suo moto or upon receiving an utility.	No longer than 90 days from date of submission of the applying.	Material change to the registered on-line social sport must be knowledgeable to the Authority.

Other Key Provisions of the Act and Draft Rules

• Certificate of Registration: Upon registration, every e-sport or on-line social sport shall be given a singular registration quantity, which can stay legitimate for as much as 5 (5) years (with renewal choices), except suspended, terminated, or eliminated.

• Grievance Redressal: The Draft Rules arrange a three-tiered grievance redressal mechanism beginning in-house to handle person complaints.[8]
  • Step 1: Each on-line sport service supplier should keep an inside grievance redressal mechanism for any video games they provide.
  • Step 2: If a person stays dissatisfied, they could escalate to the Grievance Appellate Committee (established below rule 3A of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules”)) for additional decision.
  • Step 3: As a remaining recourse, unresolved disputes will be appealed to the Authority.

In addition, the Authority might act on any complaints filed, or provoke inquiries suo moto, and conduct hearings. Each case should be determined inside 90 days. Factors to be thought-about throughout such inquiries inter alia embrace unfair benefit gained, person hurt, losses brought about, breach severity and recurrence, proportionality of the sanction, and any corrective measures tried.[9]

Enforcement Actions:  

Offenses and Punishments:

Offense	Punishment
Offering entry[10] or enabling fund transfers[11] for on-line cash video games.	3 years’ imprisonment or fines as much as INR 1 crore.[12] Escalated punishments for repeat offenses.
Advertising or selling (together with by the use of endorsements) on-line cash video games.	2 years’ imprisonment and fines as much as INR 50 lakh.[13] Escalated punishments for repeat offenses.[14]
Non-compliance with the provisions of the Act.	Blocking entry to the platform below the Information Technology Act, 2000.[15]

Powers of the Authority:

Empowered as a civil court docket, the Authority can conduct inquiries, impose sanctions, cancel or droop present registrations, and authorise officers to go looking (bodily or digitally) and arrest with out warrant if offenses are suspected or about to be dedicated.[16] 

• Repayment of User Funds: User funds collected by on-line gaming platforms could also be refunded to customers inside 180 (100 and eighty) days from enforcement of the Act.[17]

• Anticipated Changes within the Final Draft Rules

Although the Act arrived unexpectedly, the well timed launch of the Draft Rules alerts a welcome step ahead. The forthcoming public session will additional allow constructive dialogue on queries puzzling the business.

In our view, some areas requiring additional readability embrace:

• The Draft Rules broadly outline “material change” to imply any modifications to the options of the registered on-line sport which can change the character of the sport. However, the parameters of what quantities to “material change” is subjective and can should be decided on a case-to-case foundation.
• The Draft Rules broadly outline “online game service providers” to additionally embrace entities making the web video games out there, along with these working or organising them. This ought to be revisited to make sure the obligations (grievance redressal, registration, and many others.) are particular and recognized to the operators / organisers, somewhat than any service suppliers of on-line video games.
• The proposed Authority ought to have business illustration as nicely.
• The Draft Rules mandate NSGA recognition earlier than the registration of e-sports below the Act, however fail to make clear what will get registered – is it the “e-sport” itself, the person format, or the match? This ambiguity requires readability. The launch of utility varieties from the Authority may make clear this confusion.
• Appeals from the Authority’s choices lie again to the Appellate Authority (i.e., Secretary to Government of India within the MeitY) somewhat than to a real appellate physique. Moreover, because the Authority lacks judicial members regardless that entrusted with the judicial physique powers, it’s prone to invite judicial challenges and implementation delays. Hopefully, this shall be addressed within the remaining guidelines.
• Clarifications on purchases (or rewards) involving purely in-game gadgets not convertible into cash might assist fee platforms and advertisers get snug with such fashions, with out insisting on a registration.

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[1] Section 2(1)(c) of the Act.

[2] Section 2(1)(i) of the Act.

[3] Section 2(1)(g) of the Act.

[4] Section 2(1)(j) of the Act defines “Other Stakes” to imply something recognised as equal or convertible to cash and contains credit, cash, token or objects or some other related factor, by no matter title known as and whether or not it’s actual or digital, which is bought by paying cash instantly or by oblique means or as a part of, or in relation to, a web-based sport.

[5] Rule 2(i) of the Draft Rules defines “Online Game Service Provider” to imply any one who alone or collectively with others, provides, operates, organises, manages, or makes out there a number of on-line video games.

[6] Rule 13 of the Draft Rules.

[7]Rule 2(1)(h) of the Draft Rules defines “Material Change” to imply any change within the method of providing a registered on-line social sport or e-sport, together with a modification in options of the web sport or its income mannequin, which in all fairness prone to change the character of such on-line social sport or e-sport as a web-based cash sport or the place there may be any change within the method through which cash or something recognised as equal or convertible to cash is transacted for the web sport.

[8] Section 23 of the Act.

[9] Rule 21 of the Draft Rules.

[10] Section 9(1) of the Act.

[11] Section 9(3) of the Act.

[12] Section 9(4) of the Act.

[13] Section 9(2) of the Act

[14] Section 9(5) of the Act.

[15] Section 14 of the Act.

[16] Section 16 of the Act.

[17] Rules 24 of the Draft Rules.