India's new federal framework for online gaming, which took effect on May 1, banned real-money gaming regardless of skill or chance. But Aaron Kamath, head of practice at Nishith Desai Associates, points to 'a number of areas of uncertainty' that may lead operators into unintentional breach.
The PROG Act 2025 and its 2026 rules divide digital gaming into three categories: prohibited online money gaming, esports, and social online games. The definition of money gaming is broad. Any activity in which a user places a stake — money, credits, tokens or 'other value' — with the expectation of monetary return or enrichment counts as a violation. 'In practice almost any format with paid entry and a cash prize falls under the ban,' Kamath says. 'So the long-running debate over skill versus chance has lost relevance.'
The law does not define what counts as a 'game' or 'gameplay', leaving the boundary unclear for adjacent formats such as opinion trading, lotteries, promotional contests and quizzes. It is also unclear who bears the compliance burden: the definition of 'gaming service provider' could in theory extend to app stores and aggregator platforms, though Kamath believes the obligation rests with the company directly offering the game. Another issue is the procedure for recognising esports. Registration is only possible for games recognised under the National Sports Governance Act 2025, but the criteria for such recognition were not set out when PROG took effect.
Violation carries imprisonment of up to three years and a fine of up to 1 crore rupees (around $106,000). The ban extends to advertising and payment processing. Major operators — Dream11, MPL, Zupee, PokerBaazi — suspended cash games in August 2025 after a Supreme Court ruling. Dream11 moved to free-to-play with monetisation through advertising and sponsorship. Social games with subscriptions, paid access, advertising and in-game purchases remain legal, provided the payment is not a stake.
