Ban on Real Money Games Across India: Saving the Youth or Killing the Industry?

1. What Lurked Behind the "Explosive Growth"

India is now considered the world's second-largest online gaming market, following China. Approximately 480 million people enjoy some form of online gaming, with "online money games," where cash or points are wagered, at the center of this trend.Lexology

Card games like Rummy, online poker, fantasy sports, cricket prediction games…. With just a smartphone, one can join in minutes, and flashy ads promising "a dream from a few hundred rupees" have flooded TV and social media. However, behind this glamorous image, there are people whose lives are quietly being destroyed.

According to government estimates, about 450 million people in India lose over 200 billion rupees (more than 200 billion yen) annually on online money games.Phys.org

Moreover, the losses are not just "entertainment expenses." Debt, family breakdown, depression, and suicide—the chain of these issues has become visible as a social problem in recent years.

2. Researchers Uncover "Addiction as a Business Model"

A recent analysis reported by Phys.org applied the term "exploitation" to this issue. A research team led by Gaurav Pathak from Jindal Global Law School in India analyzed financial data from major online money game companies and suicide statistics, concluding that the business model fundamentally relies on user addiction.Phys.org

According to them, some companies spend up to 70% of their revenue on promotional expenses.Phys.org

Bonuses, cashbacks, free bets…. Users are given a "winning experience" in the initial stages, getting "hooked" by the pleasure of rewards, and then the stakes are gradually raised. Even when losing, push notifications and emails keep tempting them with messages like "Just one more win to recover."

In clinical settings, there is an increase in young people diagnosed with "Internet Gaming Disorder."Phys.org

Some psychiatrists warn, "The essence is almost the same as gambling addiction; it's just that the smartphone screen has become the casino."

3. The End of the 150-Year "Skill vs. Chance" Debate

India's gambling regulations date back to the 19th-century "Public Gambling Act, 1867." This law adopted the view that "pure skill games" are not gambling, prohibiting only games dominated by chance.Phys.org

As a result, debates like "Is Rummy a skill?" "What about fantasy sports?" continued endlessly, and courts had to judge each game as "skill or chance." This led to discrepancies where something was legal in one state and illegal in another.Phys.org

However, the situation changed dramatically with online gaming. In an era where a single app spans nationwide users and is even provided from overseas servers, the "state-by-state" and "game-by-game" distinctions became inadequate.

4. PROG Act: A Blanket Ban on Games Involving Stakes

To put an end to this confusion, in August 2025, the Indian Federal Parliament passed the "Promotion and Regulation of Online Gaming Act, 2025" (PROG Act).King Stubb & Kasiva

The key point of this law is simple.

• Games that involve paying stakes or entry fees for monetary returns are banned, regardless of skill or chance

• Violations can result in up to three years of imprisonment or hefty fines

• Services provided from overseas are also subject to regulation if they target residents of India
  King Stubb & Kasiva

On the other hand, the following forms are permitted.

• Free-to-play models

• Subscription models with monthly fees

• Ad-supported models based on advertising revenue

In other words, the government is not denying "games" as a form of entertainment itself. They are trying to separate the combination of stakes and highly addictive monetization methods.Phys.org

5. Researchers View it as a "Welfare State Move"

Pathak and his team position this new law not merely as "anti-business" but as a "redesign of the new gaming market as a welfare state."Phys.org

Online money games tend to have a structure where a small number of "heavy users" support much of the overall revenue. Businesses that generate income based on users betting disproportionately large amounts relative to their income can indeed be said to be "structurally harmful" from a "consumer protection" perspective.

The research team points out that the PROG Act could serve as a "reference model" for other countries. In fact, in Europe and Southeast Asia, regulations surrounding paid gacha and loot boxes are tightening, and the "boundary between games and gambling" is becoming an international policy issue.King Stubb & Kasiva

6. Industry Backlash: "200,000 Jobs" and "2.5 Trillion Yen Market" at Risk

Criticizing these regulations as "overkill" are the gaming industry and some economic analysts.

India's online gaming industry, including online money games, is estimated to be a market worth about 2.5 trillion yen, with related employment reaching 200,000 according to some estimates.mint

Real money game companies spend over 450 billion rupees annually on advertising alone and have been major sponsors of sports broadcasts and influencer marketing.IPLF

If the PROG Act effectively makes real money games "game over"—

• Closure or withdrawal of existing apps

• Massive layoffs (reports suggest some companies are considering cutting 60% of their domestic staff in India)

• Reduction in sponsorship income for sports leagues and media

Such "side effects" are becoming a reality.IPLF

7. Constitutional Debate: Free Business or Public Good to Protect?

The legal amendment has sparked fierce disputes in the courts. The business side has filed a constitutional lawsuit, arguing that it violates "freedom of occupation" and "freedom of business" (Article 19(1)(g) of the Indian Constitution).King Stubb & Kasiva

Additionally, there is a challenge from the perspective of federalism, questioning whether gambling regulation should inherently belong to the "state's" authority. The criticism is that the central government's move to impose nationwide uniform regulations is an "overreach of legislative power."SSRN

In response, the government emphasizes that "what online money games bring is not mere entertainment but a national risk leading to financial crimes, tax evasion, and money laundering."The Economic Times

From the perspective of public interest and protection of the vulnerable, strong intervention is justified.

8. Reactions on Social Media: Applause and Booing Intersect on Timelines

The debate over the merits of the law is unfolding not only in TV discussions but also intensely on social media.

On X (formerly Twitter), hashtags #OnlineGamingBill2025 and #RealMoneyGaming frequently trend, and timelines are filled with mixed opinions.

• "I have a brother who used to lose money on online rummy every payday. Honestly, I'm relieved by this law." (Female user in her 20s)

• "As someone working in a gaming company, this blow has made my future career prospects bleak. While addiction measures are necessary, an outright ban is too extreme." (Male engineer in his 30s)

• "Many talk about 'personal responsibility,' but how much free choice is possible in an environment surrounded by algorithms and ads?" (Policy researcher)

These are summaries of typical posts, but many similar tones are observed. Industry insiders and lawyers on LinkedIn argue that "detailed rule-based regulation like in financial markets is more realistic than a blanket ban,"linkedin.com

while psychiatrists and educators express support, saying, "Now is the necessary step to protect the youth."X (formerly Twitter)