India’s online gaming industry is growing rapidly. A recent study by Mordor Intelligence revealed that the gaming market in India reached USD 2.2 Billion in 2023 and is expected to grow to $8.6 Billion by 2028. However, the industry’s regulatory structure is very fragmented, hindering sustainable growth.
Each state currently manages its gaming policies under the Public Gambling Act of 1857, an approach that has become outdated in today’s interconnected digital landscape. Online gaming platforms operate across state lines, making state-by-state regulations impractical.
For instance, a person sitting in Telangana can and should be able to get services from Karnataka or Kashmir. Recognising the challenge, the Ministry of Electronics and Information Technology (MeitY) introduced the Intermediary Guidelines and Digital Media Ethics Code in 2021, with amendments in 2023. This initiative created a foundation for defining and regulating online gaming at a national level, with the goal of a more streamlined and consistent approach. However, these efforts are yet to be materialised into a concrete gaming policy and regulation.
Challenge for International Gaming Companies
While Indian regulations are evolving, international online gaming companies face unique obstacles. These companies (often known as offshore gaming platforms) cannot register under current Indian gaming laws, which focus on gambling rather than skill-based games.
This leaves them outside the scope of India’s tax system, both direct and indirect. However, demand for online gaming is surging, fueled by India’s 650 million smartphone users and 790 million wireless broadband subscribers. Without a clear registration pathway, consumers increasingly turn to offshore games, many of which are Real Money Games (RMGs). This trend emphasises the need for a robust, national framework that includes all types of gaming formats.
Defining Games of Skill vs. Games of Chance
One of the core regulatory challenges is distinguishing games of skill from games of chance. This distinction is crucial, as skill-based games have more potential for regulatory inclusion under new guidelines. Amendments to the IT Act, 2000, attempt to clarify these definitions, enabling greater control over what games are legally permissible.
To further ensure clarity and fair play, Indian gaming platforms have organised themselves under Self-Regulating Organisations (SROs). These SROs enforce a strict code of conduct, making sure that only games genuinely based on skill are marketed as such. This step not only aids transparency but also aligns with legal provisions under the Indian Gambling Act.
Addressing Consumer Protection and Responsible Gaming
As part of this regulatory alignment, the SROs have proactively addressed concerns from both policymakers and the public. They implement age restrictions, offer tools to self-limit time and spending and use data analytics to monitor gaming behaviour.
Similar safety features, such as Know Your Customer (KYC) verification and fully digital transactions, are also employed by international gaming companies to prevent money laundering risks. These safeguards underscore the industry’s commitment to responsible gaming practices, reinforcing the need for a national framework that holds all gaming companies, domestic and international, to consistent standards.
Establishing a Transparent and Revenue-Contributing Industry
A unified national policy would allow international gaming companies to register, operate transparently, and contribute to India’s economy through taxes. Currently, these companies are often misinterpreted as “illegal” simply because they lack a formal registration process in India. In reality, offshore platforms can operate within Indian law as long as they avoid misleading advertising, inappropriate content, or themes that violate local standards. A unified framework would remove this grey area, helping companies comply fully with Indian regulations.
Implementing a national-level framework for online gaming will create a transparent, regulated environment that supports sustainable industry growth. It will also encourage international companies to contribute to India’s tax revenue and adhere to high ethical standards. With demand for online gaming rising across the country, a unified regulatory approach is essential to protect consumers, foster responsible gaming, and drive economic growth for India.
(The author is a Practitioner Development Economist and retired Secretary to GoI)
Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.