Mumbai: Investors in real-money gaming startups are in wait-and-watch mode after the government unveiled a sweeping ban that could wipe out the billion-dollar industry.
The ‘Promotion and Regulation of Online Gaming Bill 2025’ bill was passed in the Lok Sabha on Wednesday by a voice vote amid protests by Opposition members. It will become law after it is cleared in the Rajya Sabha.
The bill treats fantasy games and online gambling alike, effectively criminalizing an industry that generated over $2 billion in revenue last year.
Bankers and investors Mint spoke with said the new law, which would affect leading gaming companies such as Dream11, Gameskraft, and Games24x7, runs counter to ensuring policy continuity and improving the ease of doing business in India. But they also held hope.
“We are waiting to see if the bill goes through any iterations. I hope that the government will see reason and give levy. For now, it is not a write-off for us,” said a prominent investor in a large gaming company. The investors and bankers spoke on condition of anonymity.
Global investors have over the past five years pumped in a staggering $2.8 billion into India’s real-money gaming market—the largest subcomponent of the domestic online gaming sector. However, the real-money gaming market’s growth hinges on resolution of the taxation issues and regulatory clarity.
The Supreme Court is expected to pronounce its decision later this year on whether fantasy sports and online poker and rummy should be treated as games of skill or gambling. Its verdict will determine if real-money gaming startups have to pay nearly $20 billion (about ₹1.5 trillion) in retrospective tax claims from the Directorate General of GST Intelligence.
Investor bets, IPOs under pressure
While Dream11 and Mobile Premier League cornered a bulk of the venture capital money, other companies including Zupee, FanCraze, and Rario have also raised funds from investors betting big on India’s gaming sector, show data from Venture Intelligence.
Prominent investors in India’s online gaming space include Tiger Global, TPG, ChrysCapital, Kalaari Capital, DST Global, Alpha Wave Global, RTP Global, Steadview Capital, Lumikai, Peak XV, and Malabar Investments, the data showed.
“A lot of global investors have bet big on the segment. Government has to ensure [it gives] out the right signalling,” said another investor in the gaming sector. “Ease of doing business and such measures [the new bill] are counterintuitive. Policy continuity is critical for global investors looking to invest in India.”
The new bill could also affect the plans of gaming companies that were preparing for an initial public offering of shares. “The [government’s] latest move could further elevate uncertainties and may indefinitely delay their [the IPO] timelines,” an investment banker said.
Shares of Nazara Technologies Ltd fell 12.8% to ₹1,220 each on NSE on Wednesday. The company clarified it had no direct involvement in the real-money gaming space, although it holds a 46.07% stake in Moonshine Technologies Pvt. Ltd, which runs PokerBaazi.
Nazara invested over ₹800 crore in Moonshine through a mix of cash and stock last year, and also holds convertible shares worth ₹255 crore.
Also read | The journey of India’s online gaming industry
Destabilising an industry
The Promotion and Regulation of Online Gaming Bill, 2025 prohibits not only playing but also paying for and advertising on fantasy sports apps Dream11 and My11 Circle, online rummy platforms such as RummyCulture and RummyCircle, and casual games like Pool Champs and Online Carrom.
Real-money gaming platforms accounted for nearly two-thirds, or $2.4 billion, of the overall Indian online gaming industry’s $3.8 billion revenue in FY24, according to gaming investment firm Lumikai. Dream11, Gameskraft, and Games24x7 alone accounted for $1.36 billion of the revenue.
“The Online Gaming Bill, 2025, in its current form, risks conflating constitutionally protected games of skill with games of chance, thereby undermining decades of settled jurisprudence,” said Snigdhaneel Satpathy, partner at law firm Saraf and Partners.
“The Supreme Court as well as various High Courts have an established jurisprudence of more than 60 years that games such as rummy or fantasy sports, which involve substantial skill, do not constitute gambling—even when played for stakes,” Satpathy said.
“By proposing a blanket prohibition on all online money games, including those based on skill, the bill not only challenges this legal precedent but also threatens to destabilize a burgeoning sector that contributes significantly to employment, foreign direct investment, and government revenues,” he added.
Gameskraft-backed All India Gaming Federation (AIGF), Dream11-backed Federation of Indian Fantasy Sports (FIFS), and Games24x7-backed E-Gaming Federation (EGF) have urged the government to withdraw the ban, warning that it would wipe out a legitimate sector that employs thousands and has attracted billions in investment.
Satpathy said a prohibitionist approach could push legitimate operators underground, reduce tax collections, and stifle innovation in a sector recognized globally for its potential.
“Given the constitutional and economic aspects that must be considered, the government needs to reconsider the bill’s current trajectory and adopt a more nuanced, consultative approach,” he said. “A regulatory framework that distinguishes between games of skill and chance, while ensuring responsible gaming practices, is not only constitutionally sound but also economically prudent.”
