.svg)
India’s online real-money gaming (RMG) companies and investors have begun shutting down operations, writing off hundreds of millions of dollars in losses and scrambling for new business plans after central government ambush legislation banned the RMG sector.
An industry seemingly set for regulatory certainty ahead of a Supreme Court ruling on goods and services tax (GST) obligations was instead all but destroyed last week when the government rammed the surprise ban through parliament without debate and secured presidential assent, all within 48 hours.
The Promotion and Regulation of Online Gaming Act 2025 prohibits supply of real-money gaming in the online space, regardless of skill or chance components of the games, and hands out three-year jail terms for first offenders.
By criminalising skill games with stakes, the legislation also thumbs its nose at the Supreme Court, a multi-party appeal to which seems the only remaining option for industry holdouts.
But the damage is done. Domestic operators and their domestic and foreign investors are shutting down platforms and warning of major financial losses, staff retrenchments and unrecoupable investments for an RMG industry valued in the tens of billions of dollars.
Dublin- and New York-based gambling giant Flutter said in a statement on Monday (August 25) that it has ceased its Junglee Games operations in India, stripping the company of much of an estimated $200m in revenue and $50m in adjusted EBITDA for 2025.
Flutter said it is “actively evaluating options to encourage the restoration of the 70-year-old constitutional protection afforded to skill-based games” even as it adapts to the new law.
“I am extremely disappointed with the sudden changes to the regulatory landscape in India,” CEO Peter Jackson said, though he did not elaborate on whether Flutter would launch, join or fund a Supreme Court appeal.
One opening for more nimble operators is the legislation’s absence of penalties against gamers themselves and the apparent lack of a prohibition on RMG operators offering services from outside India.
Siddhartha George, Harini Sudersan and Satyajit Nair, writing for Poovayya Advocates & Solicitors on legal news website Bar and Bench, said such operators may be able to offer services from outside India while carrying out “operations and game development” at home.
“Whether this could offer some interim opportunities while they seek to pivot or change their operational methodology remains to be seen,” they wrote on Tuesday (August 26).
Still, the real hope for the RMG domestic industry lies with an appeal to the Supreme Court on the constitutionality of a law that ignores Court determinations on skill gaming, overrides protections for commerce and encroaches on state powers, including those states where skill gaming with stakes is legal.
The consensus among dismayed Indian legal observers is that court action is inevitable and that, in the interim, the ban will provide rich fuel for an already colossal underground gaming market.
Ranjana Adhikari, a Mumbai-based partner with law firm Shardul Amarchand Mangaldas & Co, stated that the law ignores “a long line of established judicial precedents that recognise the offering of skill-based games as a constitutionally protected business activity”.
The legislation “not only raises serious legal questions but also risks driving consumers toward unregulated and illegal platforms, thereby increasing user vulnerability instead of reducing it.
“Several stakeholders in the industry are already considering a legal challenge to the blanket ban imposed by the [Act] on real-money skill games, and court petitions are likely to be filed,” she told Vixio GamblingCompliance.
One problem for the industry lies in how the Court will respond, if at all, to the government’s apparently strategic pre-empting of its ruling.
“At this stage, it is difficult to comment on how the judgment in the Gameskraft case [on gaming industry GST obligations] and the imminent challenges to the [Act] will interplay in the next few weeks as no date has been set for the Gameskraft judgment,” Adhikari explained.
“Things will probably become clearer once the Supreme Court hopefully opines on the key regulatory principles for the industry in its Gameskraft judgment, and the scope of the legal challenge to the [Act] gradually crystallises.”
Leading Players Fold
However, in a powerful symbolic boost for the government, leading online card game operator Gameskraft Technologies, the same company that triggered the current Supreme Court showdown, declared it will not sue over the ban.
In a statement on Tuesday, Gameskraft said: “As a responsible and law-abiding corporate entity, Gameskraft has no intention of pursuing any legal challenge to the legislation. We fully respect the legislative process and remain committed to operating within the framework of the law.
“Compliance has always been non-negotiable for us. While this moment brings challenges, it also brings the opportunity to reimagine what’s next – responsibly, lawfully and in the interest of long-term value creation for all stakeholders.”
Harsh Jain, CEO of Dream Sports, the parent company of leading fantasy sports app Dream11, also said his team will not appeal, despite acknowledging that company profits will be wiped out.
“I think the government has made it clear that they don't want this right now,” he told MoneyControl.com. “I don't want to live in the past. We want to focus entirely on the future and not fight with the government on something that they don't want.
“Now, if for whatever reason the law changes or regulations come in which allow us to continue with that business model, then the law is telling us you're allowed to do it again. Today, the law stands,” he added.
The Gameskraft and Dream11 positions leave open the question of which companies, trade groups or regional governments have the resources and political backbone to lead a legal challenge against a government that stripped the legislative process of debate and committee review.
With the passage of the law resembling an executive or presidential edict rather than an act of parliament, plaintiff companies and individuals could be exposed to wider risk with a government that may have deliberately undermined the apex court’s authority.
E-gaming Uncertainty
The “promotion” element of the Act banning online RMG refers to social gaming and particularly e-games, a growing sector that the government believes will attract investment and spur economic development.
For a time, the e-games segment went out of its way to distance itself from more legally precarious RMG companies and trade groups, but this year the e-games trade body, the E-Gaming Federation, joined hands with its online skill gaming and fantasy sports counterparts to promote industry standards and compliance.
Despite being the nominal beneficiary of the legislation, e-sports figureheads and lawyers say the legislation is still prescriptive, bureaucratic, encroaches on civil liberties and introduces more market uncertainty.
Nodwin Gaming managing director Akshat Rathee told Storyboard18.com on Thursday that promotion of esports is an “encouraging step”.
But “for this vision to truly materialise, it is critical that the terminology used in the bill, particularly the distinctions between esports, online gaming, online social gaming and online money gaming, be clearly defined and uniformly understood”.
The George, Sudersan and Nair analysis in Bar and Bench said “restrictive” definitions for e-games, whose events require central government registration, may rule out “independent tournaments or hybrid formats”.
It also warns that empowering an e-gaming Central Authority under the Act to register and categorise every e-game would result in a workload both “impracticable and Herculean”.
“The Authority risks being overwhelmed, creating regulatory bottlenecks that may hinder innovation and investment in the gaming sector,” they wrote.
Vaibhav Kakkar, senior partner with the Saraf and Partners law firm, said on Tuesday in the VCCircle online outlet that the “broader implication is chilling: a government body acting as the final arbiter for which digital games Indians are allowed to play.
“This is not only administratively unfeasible given the sheer volume and dynamism of the gaming world but also raises civil liberties concerns.
“At best, such intervention will bury startups and small studios in endless bureaucracy.
“At worst, if ever made efficient, it would be a colossal misallocation of state resources, wasting taxpayer money on a task the market and existing legal processes can handle far more deftly.”
