On 1 October 2025, India’s comprehensive gaming law, the Promotion and Regulation of Online Gaming Act, 2025, entered into force. It prohibits real-money online gaming across India, mandates licensing of platforms, properly segregated user funds, AML/KYC compliance and recognises eSports as a development sector. For platforms, advertisers, fintech stakeholders, and legal counsel, this creates both compliance obligations and strategic opportunity around digital entertainment, monetisation models and regulatory governance.
In Depth Analysis
1. Key Provisions at a Glance
- Real-money games (RMG) are broadly banned; games of skill/social gaming may continue under regulatory oversight
- Establishes a national regulator (or empowers existing body) to license, supervise and penalise platforms offering online gaming.
- Platforms must hold user funds in segregated accounts, implement anti-money-laundering (AML) and fraud controls, comply with foreign-exchange rules under RBI/ED as relevant.
- eSports and skill-gaming are promoted, recognising their trade and economy potential.
2. Why It Matters?
- India’s RMG segment (estimated at USD 2–3 billion) faces a structural business-model shift.
- Regulatory clarity provides platforms and investors a longer-term framework, shifting from patchwork state regulation to unified national law.
- For legal counsel, compliance modules must shift from state-by-state rules to federal-law oversight, opening new risk vectors (licensing, AML/FT, consumer-protection).
3. Stakeholder Implications
- Gaming platforms: Revise offerings, segment skill/social gaming, restructure monetisation (ads, subscriptions). Build licensing & compliance frameworks (KYC/AML).
- FinTechs & payment processors: Ensure they do not enable unlicensed platforms; review payment flows, segregated user funds, P2P and collect models.
- Advertisers & influencers: Reassess campaigns promoting real-money gaming; amend contracts and influencer agreements.
- Legal & compliance advisers: Assist clients with licensing strategy, platform classification (skill vs chance), foreign-investment review, consumer-law exposure and AML/FT compliance.
4. Challenges & Strategic Considerations
- Ambiguity around “game of chance” vs “skill game” — platforms must conduct classification reviews quickly.
- Implementation timelines (licensing rules, appeals, enforcement) may roll out over months — early compliance posture is an advantage.
- Offshore platforms targeting Indian users present enforcement and payments challenges.
- Strategic pivots to eSports, tournaments, skill gaming and freemium models will be commercially valuable.
5. Strategic Recommendations
- Identify and categorise all offerings into: (A) RMG (now prohibited), (B) Skill games (regulated), (C) Social/freemium games. Document decision rationale and supporting legal/technical evidence.
- Temporarily suspend monetisation channels linked to RMG until reclassification or licensing strategy is finalised. Redirect users toward non-monetary engagement or skill-based features to avoid enforcement risk.
- If your product can be adapted and licensed under the new regime, begin preparing documentation, AML/KYC processes, segregated-fund accounting and compliance manuals required for application.
- Instruct payment partners to block flows to unlicensed gaming platforms and update merchant onboarding checks. Amend payment-gateway contracts to include compliance warranties and audit rights.
- Revise influencer and advertising agreements to include compliance warranties; remove promotional material that could be construed as advertising RMG. Issue client/investor advisories on regulatory changes.
- Accelerate development of eSports/tournament features, subscription models, ad-supported gameplay, and skill certification mechanisms to preserve revenue while complying with law.
- Engage with regulators and industry bodies to seek practical clarifications (e.g., definitions, phased rollouts) and collaborate on workable compliance standards.
- Establish a compliance officer or function (if not present) to maintain records, conduct AML checks, manage user segregation of funds and coordinate regulatory reporting.
Impact Summary
- Platforms: Urgent need to audit product models and classify gaming offerings; implement licensing & compliance.
- FinTech / payments: Review linkages with gaming platforms; ensure AML/KYC, segregated funds controls.
- Advertisers/influencers: Re-evaluate campaigns promoting real-money games; audit contract exposure.
- Legal teams: Create compliance frameworks for clients in gaming/fintech space; advise on licensing, regulatory risk, business-pivot options.
India’s new Online Gaming Act ends the era of unregulated real money gaming at scale. For platforms and their advisors, this is both a compliance wall and a pivot point, the question is how to re architect business models around skill, competition and entertainment rather than pure wager.