REGULATION OF ONLINE GAMING IN INDIA

Introduction to India’s Gaming Industry

India’s gaming industry has emerged as one of the fastest-growing segments of the digital economy, riding on the twin forces of affordable smartphones and low-cost internet access. What once began with simple offline games and console-based entertainment has now transformed into a multi-billion-dollar industry, spanning mobile gaming, PC and console gaming, esports, and game development services.

Beyond recreation, gaming in India is increasingly tied to innovation, entrepreneurship, and employment generation—with startups, global studios, and indigenous developers creating both entertainment-focused and educational games.

Statistics regarding online gaming in India

lMarket growth- The online gaming industry in India grew at a compounded annual growth rate (CAGR) of 38% between 2017-2020, as opposed to 8% in China and 10% in the US.

lRevenue generation-The revenue of the Indian mobile gaming industry is expected to reach $5 billion in 2025.

lNew user base- India’s percentage of new paying users (NPUs) in gaming has been the fastest growing in the world for two consecutive years, at 40% in 2020 and 50% in 2021.

Factors Driving the Growth of India’s Gaming Sector

lSmartphone Penetration

oAffordable smartphones with high-speed processors and better graphics capabilities have made gaming accessible to a large population.

oExample: The launch of budget gaming phones by brands like iQOO and Realme in 2024 has expanded mobile gaming reach.

lAffordable Internet & 5G Rollout

oIndia’s low data tariffs and nationwide 5G expansion have enabled seamless online gaming, cloud gaming, and multiplayer formats.

oExample: Jio and Airtel’s 5G services (2023–24) have boosted mobile esports and streaming quality.

lYouth Demographics & Rising Disposable Incomes

oOver 60% of India’s population is below 35 years; with rising incomes, young people are increasingly spending on in-app purchases and gaming subscriptions.

oExample: Platforms like Google Play Pass and Xbox Game Pass India (2024) have gained subscribers.

lEsports Popularity

oEsports tournaments with prize pools and live streaming have turned gaming into a professional career path.

oExample: India hosted the BGMI Masters Series 2023, broadcast on television and digital platforms, drawing millions of viewers.

lStreaming & Gaming Content Creation

oPlatforms like YouTube Gaming and Twitch, along with Indian creators, have fueled community engagement.

oExample: Streamers like Mortal and ScoutOP continue to attract millions of followers, making gaming a mainstream entertainment form.

lGovernment Push through AVGC Policies

oThe Animation, Visual Effects, Gaming & Comics (AVGC) Task Force set up by the Government of India aims to create jobs, promote startups, and boost exports in this sector.

oExample: Karnataka and Maharashtra have introduced AVGC policies to support gaming hubs and training.

lInvestment & Startup Ecosystem

oIndian and global investors are funding gaming startups, leading to innovation and localized content.

oExample: In 2024, Loco (Indian game streaming app) raised funding to expand esports streaming services.

lLocalization of Games

oIndian themes, languages, and cultural references are being integrated into games to appeal to local users.

oExample: Games like Raji: An Ancient Epic gained global recognition for their Indian mythology-based storyline.

How online gaming at present is regulated in India ?

1. New Online Gaming Rules, 2023

The Ministry of Electronics and IT (MeitY) was notified as the nodal ministry for online gaming.

Rules introduced a self-regulatory body (SRB) system to verify “permissible online games.”

Games involving wagering, betting, or harmful content are prohibited.

1. Information Technology (Intermediary Guidelines & Digital Media Ethics Code) Rules, 2021

These rules empower the government to regulate digital platforms, including online gaming intermediaries.

They mandate grievance redressal mechanisms, content moderation, and due diligence by gaming platforms.

1. Constitutional Basis – State Subject

Gambling and betting fall under the State List (Entry 34 of List II) of the Constitution.

This means each state has the power to regulate or ban online/offline gaming and betting.

Example: Tamil Nadand Telangana have banned online real-money gaming, while Sikkim regulates online casinos.

1. Differentiation Between Skill & Chance

Indian courts and regulators distinguish between games of skill (like chess, rummy, fantasy sports) and games of chance (like betting, lotteries).

Games of skill are usually permitted, while games of chance are restricted or banned.

Example: In K.R. Lakshmanan v. State of Tamil Nad(1996), the Supreme Court held horse racing as a game of skill.

1. State-Level Legislations

Several states have their own gaming/betting laws, creating a fragmented regulatory environment.

Example: Nagaland Prohibition of Gambling and Promotion & Regulation of Online Games of Skill Act, 2016 – one of the first state laws regulating online skill-based games.

Challenges in Regulating Online Gaming in India

1.Fragmented Legal Framework

lGaming and betting are state subjects, leading to different rules across states.

lExample: States like Telangana and Tamil Nadban online games, while Nagaland and Sikkim regulate certain skill-based games, creating legal uncertainty.

2.Addiction and Mental Health Risks

lEasy access to mobile gaming has led to addiction, especially among youth, causing financial losses and psychological harm.

lExample: Reports of suicides linked to losses in real-money games like online rummy have triggered public concern in Tamil Nadand Kerala.

3.Illegal Betting & Black Money

lMany offshore or unregulated platforms operate without licenses, enabling illegal betting, money laundering, and tax evasion.

lExample: Enforcement Directorate has investigated offshore betting apps like Mahadev Online Book in 2023.

4.Consumer Protection Gaps

lPlayers have limited grievance redressal mechanisms when cheated or misled by gaming platforms.

lAds often exaggerate winnings, encouraging irresponsible behavior.

5.Balancing Innovation and Regulation

lOver-regulation may stifle India’s booming gaming startup ecosystem and investment potential, while under-regulation may lead to social harms.

lStriking the right balance remains a challenge.

Conclusion

The online gaming sector in India sits at the crossroads of digital innovation and social responsibility. On one hand, it promises economic growth, employment, and global recognition through esports; on the other, it raises concerns of addiction, illegal betting, financial fraud, and child safety. The current fragmented regulatory framework has created uncertainty for both investors and consumers. Going forward, India needs a balanced, uniform, and future-ready regulatory ecosystem that safeguards players, ensures responsible gaming practices, and at the same time fosters innovation in this rapidly evolving industry.