Cabinet Approves Bill To Ban Online Money Games; Promote Safe E-Sports

The Union Cabinet on Tuesday approved a bill to ban ‘online money games’, where users pay a fee or deposit money in the hope of winning.

The proposed legislation, set to be introduced in the Lok Sabha on Wednesday, punishes those who offer, encourage, or induce players to participate with up to three years’ imprisonment or a fine of Rs 1 crore. The law also extends to banks facilitating these transactions.

The Promotion and Regulation of Online Gaming Bill seeks to differentiate money-based games from online social games or e-sports, where players do not use money.

A regulatory body will be established to oversee the sector, according to sources. Online social games will allow users to pay subscription or one-time access fees, but will not involve money stakes.

The proposed law defines an ‘online money game’ as one played by a user who pays a fee, deposits money, or stakes other assets with the expectation of winning.

Authorities have expressed concern that unregulated online money gaming platforms pose risks to national and economic security, particularly through the use of digital wallets and cryptocurrencies for money laundering and illicit transfers. Authorities believe that offshore entities are circumventing tax and legal obligations.

Serious Social & Financial Concerns

Government sources highlighted that online money gaming contributes to addiction among children and youth, mental health issues, financial losses, and even suicides. Law enforcement agencies face challenges in tracking and regulating these platforms, particularly those operating from abroad.

The legislation proposes penalties of up to two years in prison or a fine of Rs 50 lakh for entities advertising online money games.

Those offering such games, along with banks engaged in related transactions, could face ‘cognisable and non-bailable’ offences, with repeat violations attracting at least three years’ jail and fines of Rs 10-20 lakh.

Advertisers could face two to three years in prison and fines of Rs 5-10 lakh. Authorities may also hold senior executives liable if they consent to, connive in, or neglect offences.

The bill also allows authorities to block platforms and online money gaming services if entities or individuals fail to comply.

In addition, the legislation seeks to encourage Indian startups to create culturally relevant content, reduce reliance on foreign platforms, and promote self-reliance in the digital gaming ecosystem.

The new law will create a safer, regulated environment for online gaming in India, protecting citizens and promoting the growth of legitimate digital gaming enterprises.

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