LET'S TALK SPORTS LAW

[Author: Kushal Taparia, Second Year student at Gujarat National Law University]

In recent years, India’s online gaming sector has witnessed remarkable growth fortified by increased investments, technological advancements while being unregulated all this while. The current valuation of the Indian Gaming industry stands at $3.7 billion where Real Money Gaming (RMG) accounts for roughly 85% of the total revenue generated. Since the time of the boom of this industry, it has faced countless obstacles in the form of provision of taxation owing to its nature of being unregulated. The age-old debate and the pivotal question of “game of skill vs. game of chance” created a friction of sorts between the government and the consumers. The government has always been clear on its narrative of “game of skill v. game of chance” and has always upheld and promoted the former while imposing restrictions on the latter. The Promotion and Regulation of Online Gaming Act (hereinafter referred to as the ‘Act’), 2025 marks a historic shift in India’s legal landscape, ending the wait for a statutorily regulated industry. The Act, has been framed as a dual-purpose mechanism to promote innovation and safeguard the interests of the users, establishing a centralized framework with a grievance redressal forum. However, the Act’s ambitious scope to formalize such a dynamic industry is met with complex legal and on ground implementation challenges.

The Pre-Legislative Landscape – A Tapestry of Judicial Interpretation

The legal status of online gaming presents a hysterical case study on how an old-fashioned law can be stretched to govern a modern, highly advanced technological reality. Prior to 2025, the sector was primarily regulated by the Public Gambling Act, 1867, a statute conceived long before the digital age. The judiciary, in the absence of legislative guidance, became the primary adjudicator, developing the “dominant factor” test to distinguish permissible games of skill from illegal games of chance, a benchmark test laid down in cases like RMDC v. Union of India.

The Public Gaming Act, while initially functional, proved inadequate and too outdated to meet the expectations for the scale and complexity of the online gaming industry, which is projected to reach $9.1 billion by 2029, over time. The application of the skill-chance test became a source of immense litigation and inconsistency. The legality and the future of fantasy sports platforms like Dream11 is highly unpredictable. While the Hon’ble Bombay High Court in Gurdeep Singh Sachar v. Union of India, initially casted doubt on its validity but a division bench later upheld it, affirming that success in such fantasy sports required substantial skill, knowledge, and judgment which reaffirms the principles of “game of skill”. The most significant constitutional impediment was the allocation of legislative power. “Betting and gambling” are a state subject under Entry 34, List II of the Seventh Schedule. The Act creates a Central Online Gaming Authority (“COGA”), a specialized body empowered to classify permissible online games, issue licenses to intermediaries, and formulate regulations on advertising such games, player protection and the fairness of disputes. This moves the regulatory function from the courts to an expert administrative agency. The Act has not discarded the skill-chance distinction but has moved towards a licensing-based system where only the licensee shall hold the rights to such games. It explicitly prohibits “wagering on an uncertain event” but creates a regulated pathway for RMG platforms that obtain a COGA license and adhere to its rules. 

An End Game for RMG or Scope for Legislative Relaxation?

Real money gaming (RMG) also encompasses activities such as online poker, rummy and fantasy sports. Until this point, these were considered games of skill rather than chance, and had protections in the form of legal precedents. But the Act now seems disconnected from the ground reality. Now any involvement of monetary incentives will be deemed as illegal. The act imposes prohibitions on marketing as well and prohibits all kinds of flashy advertisements during cricket matches, including sponsorships on the Indian cricket team jersey. Dream 11 has been the Indian Men’s Cricket Team title sponsor since 2023 and the deal between the Board of Control for Cricket in India (BCCI) and Dream 11 was valued at Rs. 358 crores. After the Act was enforced, Dream 11 backed off as title sponsor of the Indian Cricket team and has been replaced with Apollo Tyres as their new title sponsor. The Supreme Court (‘SC’) took over the entire batch of petitions against the Promotion and Regulation of Online Gaming Act, 2025, that were previously pending in the High Courts of Delhi, Karnataka, and Madhya Pradesh. The main contention of the petitioners is that this Act bans skill-based online games and restricts their legitimate business activities It is contended that legislatures may regulate it in the public interest, but cannot prohibit it outright.

The Supreme Court will hear 4 issues on the Act which is supposed to be enforced starting 1^st October, 2025:

1. Whether the Parliament is well within its reach to pass such an Act on a subject matter which is reserved for the States?
2. Whether the removal of Game of Skill v. Game of Chance and criminalising such business activities is violative of Article 19?
3. Whether total prohibition, backed by severe criminal penalties, meets the test of proportionality under Article 21?
4. Whether the definition of online money games infringes and goes against the constitutional provisions?

Shades of Grey: The Enduring Ambiguity in Classification

The Act directs the banks to stop processing transactions being done on RMG platforms, resulting in overcautious banks freezing accounts or blocking payments for unrelated purposes. The price of non-compliance is heavy as it goes up to five years’ imprisonment and INR 2 crores fines for offenders, with repeat offenders being struck harder. Offences are now serious, cognisable and non-bailable, resulting in possible arrests without warrant. However, what the Act does not accommodate into its provision, is the use of Cryptocurrency as a method of payment in the RMG apps and websites. 

Currently, cryptocurrencies are not regulated in India, and the government has stated that cryptocurrencies are not legal tender and advised their citizens against transacting with these currencies. These RMG still use non-fiat money currencies such as Cryptocurrencies, non-fungible tokens (NFT) as a method of payment and withdrawal. The Government of India and Reserve Bank of India (RBI) have not imposed a blanket ban on cryptocurrencies hence leaving a wide discretion for users and such RMG platforms to continue their business while openly defying the Act as there will be no enforcement mechanism which can hold such users liable under the Act. The Central Board of Direct Taxes provided clarification on TDS applicability on online gaming winnings to deduct TDS at the rate of 30% on any winnings drawn by a user from winning online games. If such winnings are withdrawn via Bank Transfer, UPI, NEFTs or other such mechanisms, the Act has the authority to enforce the law and hold the people who are participating in such activities as liable and impose the relevant punishment. However, if the deposit and withdrawal of money is via Cryptocurrency, the enforcement mechanism can under no such circumstance hold the people liable as there an no existing provision banning how Cryptocurrency is used. In Internet and Mobile Association of India vs. Reserve Bank of India, the Hon’ble SC held that the RBI lacked jurisdiction to forbid dealings in cryptocurrencies and the blanket ban was based on an erroneous understanding that it was impossible to regulate cryptocurrencies.

A New Dawn for Digital Play: Prospects and Predictions

The Supreme Court’s decision to consolidate all challenges against the Promotion and Regulation of Online Gaming Act, 2025, marks the final, critical standoff point in a long-standing legal battle. The Court’s eventual ruling will not merely validate or invalidate a statute but will fundamentally shape the future of the Indian Gaming industry. A ruling upholding the Act would force the industry to a standstill, with platforms facing a plethora of contradictory regulations, whereas a ruling withholding the Act would finalise the everlasting dispute of RMG and its future in the Indian industry. The United States online gaming industry has always lacked a uniform legislature applicable to all states, complex tax rules, payment restrictions, and rising concerns over gambling sports betting addictions. These challenges were addressed by implementing:

• State licensing frameworks
• Clearer taxation structures
• Strict KYC
• Responsible gambling
• Closer cooperation with financial institutions and regulators

Now the US Gaming Industry’s market size stands at USD 63.36 billion in 2025 and is projected to reach USD 99.33 billion by 2030. It now specialises in digital distribution, mobile-first design, and the rapid normalization of subscription access to premium catalogues.

Ultimately the SC may uphold the Act but should read down certain provisions to respect and balance the interests of the consumers and the companies, perhaps clarifying COGA’s role. Regardless of the outcome, the “new dawn” will be defined by clarity. The era of ambiguous legislature is ending, making way for a future governed by clear legislative rules and regulatory oversight, finally allowing India’s online gaming industry to evolve responsibly.

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Preferred Citation: Kushal Taparia, The Digital Wager: Decoding India’s Promotion and Regulation of Online Gaming Act, 2025, and Its High-Stakes, Sports Law Review India, available at <https://sportslawreviewindia.blog/2026/01/03/the-digital-wager-decoding-indias-promotion-and-regulation-of-online-gaming-act-2025-and-its-high-stakes/> Published on 3 January, 2026.