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Cleared by the Union cabinet only a day earlier, the Promotion and Regulation of Online Gaming Bill, 2025 cleared its first legislative hurdle amid criticism from people in the gaming industry, who cited thousands of crores in revenues and investments involving the sector. The government, however, believes the benefits of banning online money games outweighs the costs, a senior government official requesting anonymity said. In Lok Sabha, where the bill sailed through amid opposition parliamentarian's protests, minister Ashwini Vaishnaw said the legislation was necessary to tackle a segment of gaming that is of significant concern. "Over the last 11 years, digital technology has expanded on a massive scale, giving India a new identity. One sector closely tied to this growth is online gaming, which has three key segments," Vaishnaw told Parliament. "The first is e-sports, an emerging field that promotes strategic thinking, teamwork, and cultural exchange. The second is online social games like solitaire, chess, and sudoku that many of us have played. The third, however, is online money games - a segment that has become a serious concern for society today." The law bans all online money games, from fantasy sports to poker, rummy and online lotteries. Facilitators face up to three years imprisonment, fines of ₹1 crore, or both. Advertising such platforms carries penalties of two years imprisonment and fines up to ₹50 lakh. Government estimates suggest 450 million Indians play online money games, with approximately ₹20,000 crore lost annually. The industry generates ₹31,000 crore in annual revenues, has attracted ₹25,000 crore in foreign investment since June 2022, and supports around 400 startups, according to the letter floated by the industry body to Amit Shah. "Many families suffer because people in their families get addicted to online money games, and life-long savings are lost to these money games," Vaishnaw said. The senior government official cited above added the bill was kept under wraps as it was considered too sensitive to publicise. Online gaming encompasses a broad spectrum, from casual mobile games to money-based platforms. Several states have targeted the latter, citing constitutional authority to regulate gambling. However, this approach has created legal confusion over skill versus chance games, with courts delivering conflicting rulings on platforms like rummy and fantasy cricket. At present, India has no federal regulation on online gaming. A patchwork of laws exists, with states like Tamil Nadu, Karnataka and Andhra Pradesh banning online money gaming outright, whilst Sikkim and Nagaland require licensing for operators. Industry bodies were not consulted before Tuesday's Cabinet approval, HT has learnt, though the government had held multiple rounds of conversations with stakeholders over the last three to four years. The All India Gaming Federation, E-Gaming Federation, and Federation of Indian Fantasy Sports have written to Home Minister Amit Shah calling the ban a "death knell" for the industry. The organisations said the sector contributes over ₹20,000 crore in annual taxes and employs more than 200,000 people, with projections to double by 2028. The government official cited above added that there was recognition the industry will be affected but said companies should look at other ways to turn their platforms towards recreational games. The bill still has a long way to go before being fully operational - it needs to next be approved by the Rajya Sabha, before rules are framed for its implementation. IT secretary S Krishnan told HT the government would hold consultations with stakeholders before drafting implementation rules. "All ministries supported the bill. The finance ministry raised concerns over payment transactions, and the Financial Intelligence Unit will keep a close watch on them," he added. Critics argued the ban abandons a more measured regulatory approach and would benefit offshore operators while harming compliant domestic companies. The legislation effectively scraps proposed amendments to IT Rules 2023 that would have created a system where self-regulatory bodies vetted online real-money games and provided consumer complaint channels. "The IT Rules amendment was a proportionate framework that adequately addressed consumer welfare concerns and would have created a way to signal to consumers which platforms can be trusted and which cannot. Most importantly, it gave them an opportunity for recourse," said Megha Bal, director at Esya Centre, a tech policy think tank. "The government has, in one fell swoop, wiped out companies that were onshore and willing to comply with a regulatory framework," Bal added. The legislation comes amid an Enforcement Directorate investigation into celebrities promoting betting platforms, with the agency questioning film stars, cricketers and influencers over money laundering concerns. The bill, however, promotes e-Sports as legitimate competition while banning money-based gaming, marking one of the world's strictest regulatory approaches to digital gambling. Lok Sabha Speaker Om Birla urged MPs to back the bill, calling it a "good bill," even as opposition protests disrupted proceedings. "I request members to return to their seats and discuss the matter. I am ready to allow a debate. Do you not want to debate this issue?" he asked amid the uproar.