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Page 32 - The Indian EYE 050126
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    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.

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