The Ministry of Electronics and IT (MeitY) in India has issued 1298 orders between 2022 and 2024 to block online betting, gambling, and gaming websites. But executives from real money gaming firms allege that non-compliant offshore platforms continued to thrive in India.

Additionally, the Directorate General of Goods and Services Tax Intelligence (DGGI), in a note published in March, said it had blocked 357 non-compliant offshore RMG entities, with 700 more under scrutiny.

With the ban on homegrown RMG platforms, offshore entities are expected to thrive, cornering the entire Indian market through a web of channels on social media messaging platforms and proliferation of these apps operated from regulatory havens.

“The cracking down on offshore platforms led us to believe that the centre was focussed on curbing these operators by working with the homegrown industry as partners. There were risk and analytics people advising the government on illegal money flows and suspicious behaviour,” an executive with knowledge of the matter said.

Executives added that the industry co-operated with the government on cracking down the offshore entities during the past few months. Offshore entities continued to promote their services through outdoor advertising, despite government orders to block them, they said.

Executives noted that bans on legitimate operators in states like Andhra Pradesh and Tamil Nadu pushed RMG activity towards offshore companies in the past.

They cautioned that after a complete ban is imposed on companies in India, there could be a rise in instances of financial distress and money laundering, since offshore entities are immune to regulatory scrutiny.

“The demand does not evaporate because of this ban, the demand is still there. It’s just that a different set of operators will be available now to fulfill that,” an executive said.

PRAHAR’s (Public Response Against Helplessness and Action for Addressal) July 2024 survey of 2500 gamers in Telangana—where RMG has been banned for eight years—found more than 94% of players still accessing offshore or illicit apps through VPNs, Telegram groups, or sideloaded platforms.

India’s lower house of parliament has passed a sweeping online gaming bill that, while promoting esports and casual gaming without monetary stakes, imposes a blanket ban on real-money games — threatening to disrupt billions of dollars in investment and significantly impact the real-money gaming industry, which could see widespread shutdowns.

Titled the Promotion and Regulation of Online Gaming Bill, 2025, the legislation aims to prohibit real-money games nationwide — whether based on skill or chance — and ban both their advertisement and associated financial transactions.

“In this bill, priority has been given to the welfare of society and to avoid a big evil that is creeping into society,” India’s IT minister Ashwini Vaishnaw said in Parliament while introducing the bill.

The proposed legislation restricts banks and other financial institutions from allowing transactions for real-money games in the country. Anyone offering these games could face imprisonment for up to three years, a fine of up to ₹10 million (approximately $115,000), or both. Additionally, celebrities promoting such games on any media platform could be liable for up to two years of imprisonment or a fine of ₹5 million (roughly $57000), the bill states.

Vaishnaw said the decision to bring the legislation was to address several incidents of harm, including cases where individuals reportedly died by suicide after losing money in games. However, industry stakeholders largely attribute these incidents to offshore betting and gambling apps, which many believe will not be addressed by this legislation.

“This law is bound to face litigation as it fails the test of proportionality under Article 19(1)(g). Instead of safeguarding consumers, it dismantles compliant onshore companies while opening the door wider for illegal offshore betting platforms that are the real source of financial harm,” said Meghna Bal, director of the New Delhi-based think tank Esya Centre.

Article 19(1)(g) of India’s Constitution guarantees citizens the right to practice any profession or carry on any occupation, trade or business.

Ahead of the bill’s introduction in the Indian Parliament, industry bodies wrote to Prime Minister Narendra Modi, urging him to intervene. The letter — sent by the Federation of Indian Fantasy Sports, All India Gaming Federation and E-Gaming Federation warned that the proposed legislation could benefit “illegal offshore gambling operations” while forcing Indian businesses to shut down. These industry bodies represent Dream Sports, MPL, WinZO, Gameskraft, Nazara Technologies and Zupee, among other real-money gaming companies.

“By shutting down regulated and responsible Indian platforms, it will drive [millions] of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators who operate without any safeguards, consumer protections, or taxation,” the letter stated. (Matka is a form of illegal gambling that originated in India, involving betting on random numbers.)

The three industry bodies estimated that real-money gaming startups in India have a combined enterprise valuation of ₹2 trillion (approximately $23 billion), generate cumulative revenues of ₹310 billion (around $3.6 billion), and contribute ₹200 billion (roughly $2.29 billion) annually in direct and indirect taxes. They also project a 28% compound annual growth rate that would double the industry’s size by 2028. The industry groups warned that the blanket ban could result in the loss of more than 200,000 jobs and the closure of over 400 companies.

A similar letter was also written to Indian Home Minister Amit Shah by these three industry associations.

The bill was passed by voice vote in a noisy lower house less than seven minutes after it was introduced for debate. It now requires approval from the upper house and the president to become law.

Meanwhile, some companies in casual gaming and esports have welcomed the move.

“We applaud this decision as it allows us to focus on the ongoing concerns as a business — monetization, retention, and most importantly, building great IP for India and the world, rather than having to explain to our audiences what we are to begin with,” said Sumit Batheja, CEO and co-founder of Ginger Games, which is part of Krafton’s Indian gaming incubator and makes hyper casual games.

Krafton is the South Korean gaming company behind the popular battle royale game PUBG.

In 2023, the Indian government amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to curb “user harm” from real-money games and proposed self-regulatory bodies to limit illegal betting and gambling while allowing legitimate games. However, the self-regulation approach faltered due to conflicts among industry stakeholders over enforcement and standards.

New Delhi imposed a 28% tax on online gaming in 2023 to curb real-money play, prompting an outcry from industry stakeholders. Top investors — including Tiger Global, Peak XV Partners and Kotak — urged Modi to reconsider, warning of $2.5 billion in write-offs and the potential loss of one million jobs. The tax, however, remained in place, even as companies challenged its retrospective application in the Supreme Court. Recent reports suggest it may be revised upward to 40% under new rules.

A recent survey conducted by YouGov on behalf of the Betting and Gaming Council (BGC) revealed that a substantial majority of 74% of people in the UK view gambling as an integral part of the nation’s culture. This insight underscores gambling’s deep-rooted presence and significance within British society.

While there is public support for stricter regulation of the gambling industry, the study shows that many feel a strong connection to gambling as a uniquely British phenomenon. Grainne Hurst, CEO of the BGC, expressed concerns that excessively stringent regulations could harm the regulated gambling sector, pushing consumers toward unregulated offshore operators instead.

Hurst also cautioned lawmakers against tax increases that might inadvertently undermine consumer protection, referencing the Netherlands as an example, where tougher tax policies led to a decline in safeguards for gamblers.

The survey highlighted rising public dissatisfaction with government actions towards regulating gambling. Approximately 31% of respondents believe current restrictions are too stringent and may benefit the illegal gambling market by limiting the regulated industry’s competitiveness.

The BGC emphasized that only 0.4% of adult gamblers experience gambling-related problems. Although this represents a small fraction, these issues could still have notable economic implications due to lost productivity and earnings. In response to the threatened tax hike, the British Horseracing Association announced plans to cancel races in September as a protest, signaling potential risks to the sustainability of the sector.