India Enacts Groundbreaking Online Games Law for Growth

India is set to transform its online gaming landscape with the introduction of the Promotion and Regulation of Online Games Act, which will take effect in October 2025. This landmark legislation aims to establish a regulatory framework for the burgeoning gaming industry, addressing the need for consumer protection and fostering investment in the sector. With a rapidly growing base of over 450 million online gamers and projected revenues exceeding $5 billion by 2027, the Indian government recognizes the necessity for formalizing this dynamic market.

Addressing the Regulatory Gap

Currently, the online gaming sector in India operates under a patchwork of state laws and outdated legislation inherited from British colonial times. Some states, such as Tamil Nadu and Telangana, have outright banned real-money gaming, while others enforce varying regulations. This inconsistency has created confusion for investors and hindered the industry’s potential. According to a report by KPMG, the absence of a cohesive national policy has made it challenging for businesses to navigate the market landscape efficiently.

The new act establishes a centralized regulatory authority, the Online Gaming Regulatory Authority of India (OGRAI), which will issue mandatory licenses to all online gaming operators. This move signifies a significant shift towards treating gaming as a legitimate industry rather than a fringe activity.

Key Provisions of the New Law

The Promotion and Regulation of Online Games Act introduces several core provisions aimed at enhancing the integrity of the online gaming ecosystem.

One of the most crucial aspects is the requirement for operators to obtain a National Online Gaming License, which will ensure compliance with federal regulations. The act distinguishes between skill-based, chance-based, and hybrid games, clarifying the legal status of various gaming formats.

Another pivotal feature is the enhanced consumer protection measures. Previously, players had to rely on platforms like CCN for feedback and reviews. Now, online gambling sites will be obligated to publish regular reports and undergo mandatory audits by third-party agencies. These changes aim to create a safer and more transparent environment for players.

The legislation also promotes responsible gaming practices, addressing growing public concerns. Measures such as deposit caps, cooling-off periods, and mandatory self-exclusion tools will be implemented. Additionally, platforms must verify the age and identity of all users through India’s DigiLocker system to prevent underage participation.

To safeguard player data, the act aligns with the Digital Personal Data Protection Act. Operators are required to store player data within India and disclose any overseas transfers. Furthermore, all transactions must utilize channels approved by the Reserve Bank of India, effectively closing off unregulated payment gateways that have previously plagued offshore betting sites.

Industry Response and Future Outlook

The response from industry stakeholders has been largely positive. Domestic companies like Dream11, Nazara Technologies, and MPL have welcomed the new law as it provides a clear framework for conducting business. International investors are also showing interest, particularly from U.S. and Southeast Asian gaming companies looking to tap into one of the fastest-growing markets.

While the new regulations may lead to increased compliance costs for companies, many view this as a necessary investment for greater market clarity and predictability. The legislation is seen as a crucial step toward positioning India as a leader in regulated digital entertainment.

The Promotion and Regulation of Online Games Act represents a significant development not only for India but also for the global digital landscape. If implemented successfully, it could provide both consumer protection and substantial economic opportunities, effectively reshaping the future of online gaming in the country.