In a major move, the Indian government has approved the much-awaited Online Gaming Bill. According to reports by Business Today, the Union Cabinet, chaired by Prime Minister Narendra Modi, gave its approval to the bill on Tuesday, August 19. The bill, titled the Regulation and Promotion of Online Gaming Act, will be introduced in the Lok Sabha on August 20.

The new legislation brings sweeping changes to the way online gaming will operate in India. Most importantly, all financial transactions linked to real-money gaming will be banned. This means that no bank or financial institution will be allowed to process payments for betting, gambling, or any form of online gaming that involves monetary stakes.

Under the provisions of the bill, online betting has been declared illegal and will now be treated as a punishable offense. Advertising of real-money gaming will also be prohibited, making it unlawful for celebrities or companies to promote betting platforms. However, the government has drawn a clear distinction between illegal gambling and legitimate gaming. Esports and skill-based games, which do not involve money but are played for entertainment, will continue to be promoted.

The Ministry of Electronics and Information Technology (MeitY) has been designated as the central regulator to oversee the sector. Any platform found unregistered or illegal will face immediate blocking by the authorities. This centralized approach is aimed at addressing issues such as fraud, gaming addiction, and the confusion created by varying state-level laws.

The government’s decision comes against the backdrop of India’s rapidly expanding online gaming industry, which has seen a surge in both players and platforms in recent years. However, this growth has also raised concerns about addiction, financial fraud, and the vulnerability of young users. Several cases have emerged where youth and children lost significant sums of money through betting apps.

Currently, online gaming faces a patchwork of regulations across different states. The new bill seeks to establish a unified national framework that will apply across the country.

The move is also aligned with the government’s recent tax reforms in the gaming sector. Since October 2023, all online gaming has been subjected to a 28 percent Goods and Services Tax (GST). From the financial year 2025 onwards, winnings from online games are being taxed at 30 percent. Offshore gaming companies have also been brought under the Indian tax net, ensuring no revenue escapes taxation.

The legal framework has been tightening over the past two years. In December 2023, amendments to the Bharatiya Nyaya Sanhita introduced strict penalties for unauthorized betting, including up to seven years in prison and heavy fines. Between 2022 and February 2025, the government blocked over 1,400 betting websites and apps operating illegally in India.

To protect vulnerable groups, the Ministry of Education has issued advisories to parents and teachers warning against the risks of online betting apps. Similarly, the Ministry of Information and Broadcasting has directed that all gaming advertisements must include disclaimers highlighting financial risks and addiction concerns.

The new Online Gaming Bill is intended to streamline these measures into a comprehensive legal framework. By banning real-money gaming transactions and cracking down on illegal platforms, the government aims to curb addiction, fraud, and the growing social challenges linked to online gambling. At the same time, it seeks to encourage legitimate skill-based gaming and esports as a form of safe entertainment.

With the bill now moving to Parliament, the future of India’s online gaming industry is set for a major transformation.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or professional advice. The details are based on publicly available reports and government announcements at the time of writing. Readers are advised to verify information from official sources before making any decisions related to online gaming or financial transactions.