Real estate gaming companies are upset as India moves to propose a comprehensive ban on business under new laws.
The Indian government will ban real money games, whether based on skills or chance, under proposed online gaming regulations, which have also been verified by one consultant with the Indian Ministry of IT and three sources working closely with the Indian government and real estate gaming companies, based on drafts seen by TechCrunch.
The law, proposed to be called promotions and regulations of the Online Games Act of 2025, restricts online games with realistic interests and prohibits both advertising and financial transactions.
“Banks, financial institutions, or others who promote financial transactions or approval of funds will not promote, permit, aid, assist, induced or promote the transaction or approval of funds towards payments for online money game services,” the draft said.
Real-Money Gaming is the largest revenue driver in the online gaming industry in India, generating $3.8 billion in revenue for the 2023-24 fiscal year. This was an up 23% year-on-year increase, according to a recent report by gaming-focused VC company Lumikai. Real money games alone accounted for a total of $2.4 billion, the company said.
However, the sector is being scrutinized amid public concern over incidents of harm, including cases where an individual is allegedly killed by suicide after losing a large amount of money in the game. Industry stakeholders attribute these cases primarily to offshore betting and gambling apps despite repeated claims of enforcement actions by federal and state authorities, such as website blocking and account freezes.
In 2023, the Indian government is in motion a industry called “devastating” and “unconstitutional” with a 28% tax on online games. Top investors, including Tiger Global and Kotak, urged Prime Minister Modi to reconsider, warning him of $2.5 billion amortization and 1 million unemployment. The corporations are challenging retroactive applications before the Supreme Court, but the tax has remained. However, the new rules could potentially rise to 40%, several recent reports suggest.
The bill says it could face imprisonment with a fine of up to three years, up to £10 million (about $115,000) or both. Similarly, celebrities who promote such games on any media platform could be liable for up to two years in prison or a fine of £5 million (approximately $57,000). The bill also gives the Indian government the power to establish a regulatory authority to oversee its implementation.
“If the law comes into effect, businesses will be closed,” the founder of India’s large real money gaming startup told TechCrunch, demanding anonymity as the draft has not yet been released.
Investors are equally concerned about the proposed legislation, which is expected to be introduced to the Indian Parliament for discussion soon.
“All unicorns in this sector will be heavily affected by the move if it is realized,” said an investor at the Indian Real Manny Games startup, but has not agreed to be cited in the record as the Indian government has not yet announced.
Dream Sports, Games24x7 and Winzo are one of India’s top real money gaming startups. Collectively, they raise billions of dollars and generate huge revenue from millions of users. India has the most real money game startups in the world per Tracxn.
Many of these companies also offer unrelated games, but one founder told TechCrunch that more than 85% of total revenues account for real estate gaming accounts. The draft was not published, so they did not comment on the record, but they agreed to share their thoughts anonymously.
Similarly, some startups are exploring their way out of India to maintain their business amidst the national regulatory challenges. They were also not yet fruitful for them as they currently generate nearly 100% of their revenues from India alone, the founder above said.
This is not the first time New Delhi has tried to regulate the Real Money Game. In 2023, the Indian government revised its information technology (mediation guidelines and digital media ethics code) rules to curtail “user harm” related to real money games in 2021. It proposed creating a self-regulatory body to approve legal games, while limiting illegal bets and gambling. However, the self-regulation model has declined due to conflicts between industry stakeholders over enforcement and standards.
A local report on Tuesday suggested that the Indian union cabinet had cleared the proposed bill for introduction in the House as early as Wednesday. However, the Indian government did not confirm the development.
India’s IT Ministry did not respond to requests for comment.
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