Drawing the Line: India’s Online Gaming Act, 2025 and its Divergence from Global Regulatory Frameworks

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This article has been prepared for general informational purposes based on legislation, policy documents, and publicly available materials from the jurisdictions referenced. The analysis of non-Indian jurisdictions is based on information available in the public domain as of the Reference Date. For documents originally published in languages other than English, translations have been generated using Google Translate and other AI-based tools for ease of reference. This article does not constitute legal advice and should not be relied upon as such.

Authors: Riddhi Rahi (Ms.) and Tushar Todi (Mr.)

Date of First Publication: 16 October, 2025

India’s new online gaming law bans real-money games nationwide, a stark contrast to the regulated markets of the UK, USA, Curaçao, and Anjouan. Our comparative guide examines what this means for the viability of compliance and licensing across these jurisdictions.

A. Introduction

India’s regulatory approach to online gaming has pivoted from a patchwork of state laws and judicial tests to a single central framework: the Promotion and Regulation of Online Gaming Act, 2025 (the ‘Indian Act’). The Indian Act does two things at once. First, it seeks to promote and regulate legitimate segments of the sector, which it defines as ‘e-sport’ and ‘online social game’, by creating a central Authority and prescribing recognition, registration and promotional measures. Second, it imposes a national prohibition on ‘online money game’ (online game played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes), making offering, facilitating, advertising or enabling such games an offence and empowering blocking, financial restrictions and criminal penalties.

These twin tracks – the promotion of non-monetary gaming and a blanket ban on real-money online gaming are the Indian Act’s defining features, and will determine how operators, payment processors, advertisers and vendors must re-design business models for India. 

This article takes a comparative view of India’s new regulatory framework. It examines how the Indian Act contrasts with the UK’s license-led regime, the United States’ state-centred approach, focusing on New York, California and two common offshore licensing options: Curaçao and Anjouan. The aim is to place India’s reforms in a global context, highlighting trends and emerging developments shaping the online gaming industry.

B. India

1. The Indian Act adopts a dual approach. It establishes a formal regulatory and promotional track for e-sports and online social games, creating a system of recognition and oversight. At the same time, it broadly outlaws online money games and prescribes criminal penalties, administrative sanctions (including suspension/cancellation of registration and blocking of information), and expanded investigation/search/seizure powers. 
2. What does the Indian Act expressly provide?

   a. The Indian Act introduces a definition of an online game in 3 categories 

   1. “E-sport”: To qualify, as an e-sport, the game must be played as a part of multi-sports events, and involves organised competitions, governed by predefined rules, recognised under the National Sports Governance Act, 2025, and registered with the designated agency or authority under the Indian Act. Outcomes are determined by factors such as human skill, physical dexterity, mental agility, or strategic thinking. Entry fees can be charged for participation or to cover administration costs, and prize money may be awarded, but the prohibition is absolute: no bets, wagers, or any other stakes of any kind are allowed. 
   2. “Online money game”: An “online money game” covers any online game whether skill-based, chance-based, or a combination of both, if it requires players to pay fees, deposit money, or place stakes in expectation of winning something of monetary value or other enrichment. The only carve-out is e-sports, which are kept outside this definition. 
   3. “online social game”: An “online social game” is one that does not involve staking or participation with the expectation of monetary returns. The law allows developers to charge subscription or one-time access fees, so long as these are not in the nature of stake or wager. The game must be offered purely for entertainment, recreation, or skill development, and it must not qualify as an e-sport or an online money game.

   b. The Indian Act empowers the Central Government to constitute an Authority to recognise, categorise and register e-sports and online social games and to determine whether it qualifies as an online money game. It also prohibits offering aid, abetting, inducing, or otherwise indulging or engaging in the offering of online money game. To date, the Central Government has not notified any authority under the Indian Act 

   c. Imposes penalties: up to 3 years’ imprisonment and fines up to ₹1 crore for core offences, with escalated mandatory minimum imprisonment and higher fines for repeat convictions; some offences are cognizable and non-bailable. 

   d. Exposes company officers to personal liability unless they can prove lack of knowledge or that they exercised all due diligence. 

3. In October 2025, the Ministry of Electronics and Information Technology released the draft Promotion and Regulation of Online Gaming Rules, 2025 (“Indian Draft Rules”) for consultation. These draft Rules set out the proposed criteria and timelines for the recognition, categorisation and registration of e-sports and online social games. They also outline the tests intended to distinguish these from online money games, empower the Online Gaming Authority to register, suspend or cancel games, and prescribe mechanisms for grievances, appeals and penalties. 

C. United Kingdom

The Gambling Act 2005 (the ‘UK Act’) (covering England, Wales and Scotland) frames regulation around three categories gaming, betting and lotteries and treats a “game of chance” broadly (including games that mix skill and chance or where superior skill can remove chance) while expressly excluding sport. A “prize” means money or money’s worth, and a person is playing for a prize if they acquire any chance of winning one, whether or not they risk losing anything. Remote gambling is captured by the UK Act and requires a remote operating licence from the Gambling Commission. Purely skill-based games that offer no monetary prize fall outside the UK Act. 

1. Effective 7 August 2025, the Licence Conditions and Codes of Practice (LCCP) tightens remote-operator duties: customer funds must be held in segregated accounts and operators must disclose whether and how those funds are protected on insolvency; firms must implement cash and cash equivalents’ controls, carry out (and at least annually review) AML/TF risk assessments, and comply with the UK Money Laundering Regulations; operators must verify and keep customer ID data accurate before permitting gambling and provide the Commission with requested information; digital-advertising rules bar ads on sites offering unauthorised copyrighted content and require contractual termination rights over third-party partners who provide unauthorized access to copyrighted content. 
2. In short:

   Games where chance predominates will generally fall within “gaming” and, if stakes are involved, are likely to be regulated as gambling.

   1. Games of skill (no monetary deposit): Pure skill games offered for free (no payment to play, no stake) are not captured by the gambling licensing regime because there is no stake/consideration and the games are free to play. 
   2. Games of skill (with monetary deposit / prize for payment): Where players pay to enter (consideration) and there is an element of chance or prize, the activity risks being treated as gambling. 
   3. Gambling/betting (including remote): Betting and remote gambling fall within the UKGC licensing regime and the operator licences are required for remote and non-remote activities.

D. United States

Over time, states assumed primary authority to licence and regulate gambling within their borders and the US regime is highly decentralised with state-by-state regimes. 

In the U.S., whether an activity constitutes gambling hinges on the presence of three key elements: (1) chance, (2) consideration, and (3) prize. The removal of any one of the elements likely means the activity does not constitute gambling. Pure skill-based free games with no consideration and no monetary prize are generally low regulatory risk in most states.

1. New York
   1. 2024 New York Laws (NY Penal L § 225.00 (2024)) (the ‘NY Laws’), Defines gambling as: A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome. 
   2. The NY Laws: “Contest of chance” means any contest, game, gaming scheme or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein. 
   3. Article I, Section 9, of the New York Constitution prohibits lotteries or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state, licensed sports betting, lottery, and charitable games. 

2. California
   1. 2024 California Code (CA Bus & Prof Code § 19801 (2024)) (the ‘California Code’) “Gambling operation” means exposing for play one or more controlled games that are dealt, operated, carried on, conducted, or maintained for commercial gain 
   2. State law prohibits commercially operated lotteries, banked or percentage games, and gambling machines, and strictly regulates parimutuel wagering on horse racing.
   3. It is the policy of this state that gambling activities that are not expressly prohibited or regulated by state law may be prohibited or regulated by local government. 
   4. All gambling operations, all persons having a significant involvement in gambling operations, all establishments where gambling is conducted, and all manufacturers, sellers, and distributors of gambling equipment must be licensed and regulated.

3. Inshort:
   1. Games of skill (no monetary deposit): Pure skill games offered for free are not treated as gambling, provided there is no consideration. The classification however remains state-specific. 
   2. Games of skill (with monetary deposit / prize for payment): Where players pay to enter (consideration) or winners receive monetary/convertible prizes, the activity may be treated as gambling depending on state law and whether chance predominates skill. Many states will require licensing or otherwise prohibit such models.
   3. Gambling/betting (including remote): Betting and remote/online gambling are regulated; where permitted an operator licence is required and operators must comply with state-specific obligations. 

E. Curaçao

As of December 24 2024, the new Landsverordening op de kansspelen (LOK), translated as the National Ordinance on Games of Chance, has come into effect, marking a pivotal reform in the regulation of Curaçao’s online gaming sector. Offering online gaming in or from Curaçao without the appropriate LOK licence is prohibited. This prohibition also extends to entities that directly or indirectly control player databases and player transactions in or from Curaçao. 

1. The stricter gaming licence requirements introduced in Curaçao in 2025 are expected to strengthen the jurisdiction’s global standing by providing benefits for current license holders, increasing trust and recognition for existing licence holders. However, these changes could make Curaçao less appealing to new entrants and startups, potentially prompting them to explore alternative jurisdictions. 

F. Anjouan

1. The Computer Gaming Licensing Act 007 of 2005 (the ‘Anjouan Act’), legalizes gaming by computer internet; provides for the licensing of computer service operators who provide computer internet users with the facility to wager against each other on sporting events or other games of chance. 
2. As per the Anjouan Act, ‘computer gaming service’ means any computer service which allows computer users to wager on sporting events or other games of chance against each other through the ‘Computer Internet’. 
3. No person shall provide, or in any way assist in providing, a computer gaming service unless they obtain a licence. Anyone offering such services without a licence is deemed to have committed an offence. 
4. Free-to-play skill games are permitted and fall outside the Anjouan Act. Even when entry fees or prizes are involved, these remain lawful so long as they are structured as skill-based competitions and do not amount to wagering between participants. Only computer-based wagering (on sporting events or games of chance) is regulated by the Anjouan Act. Such wagering is prohibited without first obtaining a licence from the Anjouan Board.

G. Regulatory contrasts and India’s path ahead

Across jurisdictions, the dividing line is fairly consistent: when games involve chance, consideration, and prize, they are treated as gambling and regulated (or prohibited). Where one of those elements is absent, say, pure skill with no monetary deposit, regulators usually step back. The United Kingdom and United States both follow this structure, but with different emphases. The UK Act places everything with a material chance element and stakes under the remit of the Gambling Commission. The U.S. is fragmented: each state decides, but the ‘chance, consideration, prize test’ is generally the common denominator.

What distinguishes the Indian Act is its twin-track approach. On one side, it formally recognises and regulates e-sports and online social games through registration and oversight by a dedicated Authority. On the other hand, it draws a hard line against online money games, regardless of whether skill or chance predominates, attaching criminal penalties, administrative sanctions, and officer liability. The Indian Draft Rules, which remain at the consultation stage and are yet to be notified, leave critical substantive questions unanswered. Although the Indian Act refers to ‘other stakes,’ the draft Rules neither define the term nor clarify whether it includes digital assets, in-game currencies or reward mechanisms. There is no guidance on operational standards, such as how game mechanics will be assessed for integrity, whether randomisation methods require certification, or if platforms will be subject to audit or anti-manipulation obligations. Until such standards are prescribed in subordinate instruments, the practical boundaries between prohibited money games and permissible online social games remain uncertain. 

By contrast, offshore regimes such as Curaçao and Anjouan are shifting in the opposite direction. Curaçao’s 2024 National Ordinance on Games of Chance (LOK) introduces tighter licensing, moving away from its historically permissive stance. Anjouan’s framework, while older, remains narrower, focusing only on wagering on sporting events or games of chance, while leaving free-to-play or structured skill competitions outside its scope. 

Taken together, the Indian Act reflects a more cautious and restrictive approach compared to its peers. From a comparative perspective, India’s approach stands out as a deliberate policy shift towards prohibition with state-supervised recognition, in contrast to the license driven regimes in the UK, US, Curaçao, and Anjouan. 

Where India appears to be heading is towards a binary regime: one track for e-sports and online social games that are recognised, registered, and supervised; and another where all online money games are prohibited outright. India is shifting to a model where the Central Government or the Authority decides what qualifies as permissible. This signals a policy choice to carve out e-sports as part of the broader sports ecosystem, to create a supervised space for online social games, and to prohibit online money games that involve stakes and winnings.

H. Conclusion

Taken together, the Indian Act reflects a deliberate policy shift, a binary regime that recognises and regulates e-sports and online social games, while imposing an outright prohibition on online money games.

Instead of leaving classification to courts, the Indian Act empowers the Central Government and the Authority to draw the line, signaling a move away from litigation-driven outcomes towards regulatory determination. In effect, India is moving towards a promotional yet protectionist stance, enabling a regulated space for skill-based competition and recreation, but using prohibition and penalties to shut down models that resemble gambling or money gaming. 

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Riddhi Rahi (Ms) and Tushar Todi (Mr)

Riddhi Rahi (Ms)

Associate at Alaya Legal

Tushar Todi (Mr)

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