Page 32 - The Indian EYE 050126

BUSINESS & TRADE MAY 01, 2026 | The Indian Eye 32

India Tightens Grip on

Online Gaming as New Law Targets

Economic Leakages

With a sweeping regulatory framework, the government seeks to curb financial

drain from online money games while promoting safer digital gaming sectors.

OUR BUREAU broader light-touch philosophy.
Importantly, the law lays down
New Delhi / Mumbai
objective criteria for classification.
ndia is set to fundamentally re- These include whether a game in-
shape its online gaming eco- volves staking money, offers monetary
Isystem as the Promotion and rewards, or allows external moneti-
Regulation of Online Gaming Act, sation of in-game assets. Such clarity
2025, along with its operational rules, is expected to reduce ambiguity and
comes into force on May 1, 2026. The legal disputes that have historically
move reflects a calibrated govern- plagued the sector.
ment strategy: crack down on online Beyond economic considerations,
money gaming that is seen as drain- the framework also addresses user
ing household finances and hurting protection—another area where un-
the broader economy, while still en- regulated gaming has raised alarms.
couraging innovation in e-sports and The rules mandate “user safety fea-
social gaming. tures” such as age-gating, time lim-
At the core of the new frame- its, parental controls, and fair-play
work is a clear and uncompromising monitoring. These safeguards aim to
stance—online money gaming is now protect vulnerable users, especially
explicitly banned across the coun- minors, from excessive gaming and
try. According to MeitY Secretary S. Members of a political parties stage a protest against online gaming in New Delhi (ANI File Photo) financial exploitation.
Krishnan, “money games have been To ensure accountability, a two-ti-
banned completely in India and on- scrutinising transactions linked to on- However, e-sports—seen as a high- er grievance redressal mechanism
line money games are no longer per- line money gaming platforms. growth and globally competitive seg- has been introduced. Users can first
mitted.” This marks one of the most This financial chokehold is ex- ment—will require mandatory reg- approach the gaming platform and, if
decisive policy interventions in India’s pected to significantly disrupt the istration, reflecting their increasing unsatisfied, escalate complaints to the
fast-growing but loosely regulated business models of illegal gaming economic significance. appellate authority. A further appeal
digital gaming sector. operators. By cutting off payment To manage the ecosystem, the can be made to the MeitY Secretary,
The government’s concern stems gateways and banking support, the government has established the On- creating a structured dispute resolu-
from the economic and social impact government is targeting the economic line Gaming Authority of India, a cen- tion system.
of unregulated betting-style platforms. lifeline of these platforms, thereby re- tralised regulator with a multi-min- The government has also stream-
These platforms, often operating in ducing their reach and impact. isterial structure. Its expanded lined regulatory procedures to im-
legal grey zones, have been associated At the same time, the government membership includes representatives prove ease of doing business. Regis-
with significant financial losses among has been careful not to stifle the legit- from the Ministry of Home Affairs, tration certificates, where required,
users, capital outflows, and rising con- imate segments of the gaming indus- Finance, Law, Sports, and Informa- will now be valid for ten years instead
cerns around addiction and financial try. In fact, the rules explicitly adopt tion and Broadcasting, ensuring a co- of five. Additionally, companies are
distress. The new law aims to plug what Krishnan described as a “regu- ordinated approach to enforcement guaranteed a fair hearing before any
these leakages by eliminating the legal lation-light” approach for permissible and policy oversight. suspension or cancellation of regis-
space for such games to operate. categories such as online social games The Authority’s responsibilities tration, addressing industry concerns
A major pillar of enforcement and e-sports. “We wanted to keep this include maintaining a public list of about arbitrary enforcement.
lies in bringing the financial system entire thing as regulation-light as pos- prohibited games and conducting As the May 1 deadline approach-
into the regulatory net. Banks and sible,” he said, underscoring the intent classification processes. This classi- es, the success of this ambitious
financial institutions are now directly to reduce compliance burdens and fication, known as “determination,” framework will depend on enforce-
accountable under the law. Any entity support industry growth. will assess whether a game falls under ment—particularly the cooperation of
“participating in promoting this activi- Under the new system, most on- banned money gaming or permissible financial institutions—and the indus-
ty or providing financial transactions line social games can operate without categories. The process is triggered try’s ability to adapt. If implemented
for such activity will also be guilty of mandatory registration or classifica- in limited scenarios—either by the effectively, the new rules could not
an offence,” Krishnan said. This effec- tion. This is designed to encourage Authority itself, through applications only curb economic losses but also
tively transforms banks into frontline startups and developers while avoid- by e-sports providers, or via govern- bring long-term stability and credibili-
enforcers, responsible for blocking or ing excessive bureaucratic hurdles. ment notifications—keeping with the ty to India’s digital gaming market.

www.TheIndianEYE.com