Online Gaming Bill: A Door Closes, Another Opens

From pirated games to bootlegged consoles to hole-in-the-wall gaming cafes, the Indian gaming landscape has come a long way to become a $3.7 billion worth industry. Spurred by the desperate need for in-house entertainment in the lonesome Covid-19 lockdown period, the gaming culture zoomed ahead unlike any other times. Investment started flowing in, hundreds of gaming companies opened shop, and both rural and urban India connected to play games, thanks to easier mobile and internet access.

But then the government changed the whole game. Recently, the Promotion and Regulation of Online Gaming Bill, 2025, was passed in the Parliament, that imposed a blanket ban on real money games (RMG) citing harms of addiction and gambling. These include casino-style games like poker, rummy, blackjack, and roulette, as well as skill-based ones like fantasy games, where players can wager and win real money.

The move virtually plunged gaming companies into an existential crisis, leaving them scrambling to reboot strategies. For one, the country’s biggest online fantasy sport platform Dream 11, valued at $8 billion, which was once the lead sponsor of the Indian cricket team, not only shut its RMG operations but also pulled out of the $358 crore sponsorship deal, leaving Team India without a jersey sponsor days before the Asia Cup kicks off in the UAE. But while the move has triggered debates on whether a blanket ban was warranted or not, can it open up an opportunity for esports – an arena for professional gamers - to take the centre stage?

Legitimising Starts with Distinction

It's worth noting that just a week back, India achieved a landmark moment by winning its first-ever Esports World Championship Gold at the 2025 Pokémon World Championships.

However, despite the talent, real money gaming (RMG) has far eclipsed esports. RMGs have been the real drivers of growth for the gaming industry, contributing nearly 86% of total revenues in 2024 even with regulations and a hefty 28% GST in place. That’s because e-sports in India has, so far, operated without a dedicated framework and long-term investment to support its growth.

But what the online gaming bill has done is bring clarity by separating esports and RMG into different categories, which can be seen as the first step toward promoting esports as a "skill-based competitive sport".

The Challenges That Need to be Overcome

Despite this recent law and the fact that Indian government had recognised esports as a legitimate sport back in 2022 (the same year esports debuted as a medal sport at the Asian Games), the legal and regulatory ambiguity around esports has been lingering, causing challenges for stakeholders.

1. Infrastructure deficits:
   India lacks adequate infrastructure to support competitive gaming, with insufficient arenas and training facilities hindering the development of professional esports.
2. Sponsorship and investment gaps:
   Like any mainstream sport, esports relies on audience viewership as a primary revenue source. While interest in esports continues to grow, the sector still faces a shortage of substantial sponsorship and investment compared to more established global markets, limiting financial viability for teams and players.
3. Lack of a unified governing body:
   The Indian esports has been deeply fragmented, with multiple games and platforms operating. Only recently, the creation of a National esports body was announced.

Even on the game development side of things, India has been lacking deep-pocketed and sustained investment due to unreliable policies, and has become an outsourcing destination for game developers working on AAA (big budget) games.

Several major studios including Rockstar Games, Electronic Arts (EA), Ubisoft, KRAFTON, Tencent, and Sony Interactive Entertainment have leveraged India's talent for game development projects such as GTA6. However, the available talent pool for AVGC-XR (Animation, Visual Effects, Gaming, Comics, and Extended Reality) has not translated into successful domestic production ventures, barring a few exceptions.

Charting the Way Forward

Several nations offer blueprints for developing an esports ecosystem. For instance, Denmark has integrated esports into the curriculum across 70 schools, while US has been encouraging esports through initiatives like collegiate programmes and high school clubs since the past decade to create a talent pipeline from an early age. China, on the other hand, had recognized esport gaming as an official profession in 2019. Meanwhile, Saudi Arabia is racing to establish itself as a global hub of esports with a $38 billion investment into the sector as a part of its National Gaming and Esports Strategy that aims to create thousands of local jobs from game development to event planning by 2030.

While the gaming bill is a promising start, India could benefit from shifting its approach from recognition towards a more active cultivation of the esports ecosystem with concrete initiatives that includes developing bootcamps and educational programs as suggested by industry leaders, creating scholarship programs for emerging talent, and perhaps most importantly, implementing tax reforms that treat esports as legitimate sports rather than gambling.