India Online Gambling Ban: A Missed Opportunity for Safer Gambling

The India online gambling ban has just taken a dramatic step: parliament has cleared a bill that bans all forms of online real-money play. The Promotion and Regulation of Online Gaming Bill 2025 now waits for presidential assent, but its message is already clear.

This is not a marginal industry. Nearly half a billion Indians play online, and more than 155 million engage with real-money formats like fantasy sports, rummy, poker, and sports betting¹.

The new India online gambling ban pulls the plug on the very segment that fuels the sector’s growth, setting the stage for a clash between prohibition and progress.

India Online Gambling Ban: Policy Intent vs. Outcome

According to the government, the India online gambling ban is about protecting people from harm … addiction, fraud, and money laundering. On paper, that sounds responsible. In reality, bans don’t stop people from playing (think Germany, Netherlands and so on). They push players to unsafe, even shady offshore sites and feed black markets. 

A Thriving Market at Risk

The India online gambling ban lands right at the heart of India’s digital economy. EY India estimated that the sector would create 250,000 jobs by 2025 and was already contributing to India’s digital ambitions². Real-money gambling is not a fringe corner of the market, it represents 86 percent of revenues and a valuation of nearly US$3.7 billion³.

Casual gaming and eSports often grab the headlines, but those markets are largely in the hands of foreign players. The real domestic value lies in skill-based gambling, where Indian start-ups built fantasy sports, card games, and rummy platforms from the ground up. Banning this sector wipes out homegrown competitiveness while leaving the stage open to international giants and fueling black market operations.

The tax loss that comes with the India online gambling ban will also bite. Earlier this year, the government imposed a 40% GST on gaming services, which operators were already struggling to absorb. With prohibition, the legitimate tax base disappears altogether. Billions will flow to offshore operators, who pay no taxes in India, while players are left with zero safeguards. This is nothing new and reality in many (over-)regulated international markets.  Take Telangana, an Indian state that banned real-money play.
Gambling didn’t disappear, it just moved to offshore sites and unlicensed apps, leaving players completely exposed and the government empty-handed.

ESG Blind Spots in the India Online Gambling Ban

The bill was meant to make gambling safer but in reality, it leaves serious key issues unaddressed. The weak spots of the India online gambling ban are obvious and hard to ignore.

Environmental

By forcing gambling activity offshore, the law shifts traffic and data storage to digital markets with looser sustainability standards, undermining the benefits of keeping that ecosystem at home.

Social

The ban zeroes in on real-money play while overlooking the bigger danger in casual games: loot boxes, in-app purchases, and microtransactions that nudge players into spending. The Internet and Mobile Association of India (IAMAI) flagged this back in 2023⁴, calling these game mechanics true drivers of overspending and addiction.
On top of that, the Indian online gambling ban bill sidesteps basic youth safeguards. Age checks, parental controls, and spending caps that are common in all regulated jurisdictions, aren’t a thing in the black markets. And, that’s where players will be flocking too …

Governance

Courts in India have long drawn a line between skill-based games and pure chance. By lumping them together, the law dismisses precedent and undermines the constitutional right to trade under Article 19(1)(g). It also scraps the 2023 plan for a self-regulatory system overseen by the government, replacing it with a blanket ban that damages regulatory credibility.

Far from improving ESG standards, the India online gambling ban undercuts them alltogether.

Innovation and Investment Fallout

The Indian online gambling ban is more than a “mere” gambling story. It’s a test of whether the subcontinent wants to be seen as a stable, forward-looking digital economy.

Skill-based gambling was one of the few sub-sectors where Indian start-ups led the market. Now, they are treated like outlaws. That kills digital “Made in India”-ambitions and sends a signal that rules can flip … overnight. International operators like Flutter, which bought Junglee Games in 2021, are suddenly holding assets they may not be able to use. Local venture capital, which had poured money into fantasy sports and rummy platforms, will think twice before backing another Indian digital play.

If one sector can be shut down this quickly, others may wonder: what or who’s next?

Global Models India Could Learn From

India is hardly alone in dealing with gambling risks. There are many examples of over-regulated jurisdictions that lead to a reverse effect: instead of protecting players, it forces them into unregulated markets and obscure platforms with zero player protection.

However, there are plenty of examples that could have positively influenced the regulation without the need to outright ban everything gambling related.

• In Belgium and the Netherlands loot box mechanics are counted as gambling. The implication: these games come with restrictions or bans to protect younger players.

• In Japan operators are forced by law to disclose all odds. Hence Japanese players know exactly what they’re paying for .. no guessing RTPs.
  
• The United Kingdom goes further: affordability checks, self-exclusion lists, and ad restrictions embed responsibility without banning consumer choice.

• The European Union is testing caps on spending, age verification, and stricter ad rules, deemed to be way more effective in player protection

• The Scandinavias show what a balanced approach could look like. Sweden and Denmark operate licensing regimes that enforce strict safeguards. And most importantly in a safe market that is both competitive and taxable (win-win!). Norway takes a tougher approach, but even there the state provides legal alternatives rather than pushing players altogether to the black markets

India had similar options on the table, but took another approach. By going with prohibition, it has made gambling less visible but far more difficult to regulate and do what the bill was set to do: protect players and prevent addiction.

Conclusion: India Online Gambling Ban

The India online gambling ban is somewhat framed as a move to protect players, yet the outcome could be very different. A smarter route was available. Regulation built on transparency, age safeguards, and responsible play would have kept the sector both safe and sustainable. Instead, India has walked backwards at the very moment it should have been leading.

Prohibition is not protection. Without an ESG-based framework, the ban is more likely to deepen risks than reduce them. Be future-ready and lead iGaming in a sustainable future by joining our iESG Membership.

Sources:

1. EY India: “New frontiers: Navigating the evolving landscape for online gaming in India (2023)“
   https://www.ey.com/en_in/insights/media-entertainment/new-frontiers-navigating-the-evolving-landscape-for-online-gaming-in-india
2. IAMAI (Internet and Mobile Association of India): “Digital Gaming Sector Overview (2023)“
   https://www.iamai.in/sectors/digital-gaming
3. Reuters: “India passes bill to ban online games played with money (2025)“
   https://www.reuters.com/world/india/india-passes-bill-ban-online-games-played-with-money-2025-08-21
4. Taylor Wessing: “An iPhone, a Gambling Problem, and the Loot Box Debate: Antwerp Enterprise Court’s LS v. Apple Ruling“
   https://www.taylorwessing.com/en/insights-and-events/insights/2025/03/an-iphone-a-gambling-problem-and-the-loot-box-debate
5. UK Gambling Commission: “Player Protection Framework“
   https://www.gamblingcommission.gov.uk/public-and-players
6. Swedish Gambling Authority: “National Licensing Rules“
7. https://www.spelinspektionen.se/en/