Contributed by: Ankit Kumar; Reviewed by: Adv. Manvee

Introduction: Why India’s Gaming Law Changed in 2026

India’s online gaming sector had, until recently, developed into a USD 3.2 billion market for Real Money Games such as Fantasy Sports, Poker, and Rummy. These games were operating in a fractured legal environment under the State-specific gambling legislations, court judgments, and generally allowed skill-based games. But everything changed overnight on 22 August 2025 with the enactment of the Promotion and Regulation of Online Gaming Act, 2025 (“Act” or “PROGA”). Subsequently, on April 22, 2026, the Promotion and Regulation of Online Gaming Rules, 2026 (“Rules”) were notified, and the Online Gaming Authority of India (“Authority”) was established to regulate the Gaming Industry in India. The Rules came into force on 1 May 2026, creating a new compliance framework for online game service providers, gaming startups, e-sports platforms, advertisers, influencers, payment intermediaries, and investors. This marks the compulsion for all the Online Gaming Startups and businesses to comply with this law and marks a significant regulatory shift in India’s gaming, e-sports, digital entertainment, and AVGC ecosystem of India.

The biggest legal shift is clear: online money games, including games based on skill, chance, or both, are prohibited where users pay money or other stakes with an expectation of monetary or other enrichment. E-sports and online social games remain permitted, but they are now subject to determination, registration, user safety, grievance redressal, and payment-related requirements under the Act and Rules. Stakeholders across the gaming ecosystem, including founders, investors, payment service providers, and celebrity endorsers, are now subject to stringent compliance requirements. This article answers the 25 most important questions for startups and companies navigating this new regulatory landscape.

Quick Summary: Online Gaming Law in India 2026

Under PROGA 2025 and the 2026 Rules, online money games are prohibited in India, regardless of whether they are based on skill, chance, or both. E-sports and online social games are permitted, provided they do not involve betting, wagering, or other stakes. E-sports require recognition under the National Sports Governance Act, 2025, and registration with the Online Gaming Authority of India. Online social games may require determination or registration if notified or directed by the Government or Authority.

Quick Answer: What Is Banned and What Is Allowed?

What Is the Promotion and Regulation of Online Gaming Act, 2025?

The Promotion and Regulation of Online Gaming Act, 2025 (Act No. 32 of 2025) is a central statute enacted by Parliament to promote and regulate online gaming, recognise e-sports and online social games, and prohibit online money gaming services. It extends to the whole of India and also applies to online money gaming services offered within India or operated from outside India. The Act operates in addition to other laws, but has an overriding effect only to the extent of any inconsistency with another law.

The Act does three things simultaneously:

• Prohibits all online money games and criminalises their offering, advertisement, and payment facilitation.
• Promotes e-sports and online social games as legitimate, structured categories of online gaming.
• Establishes a new regulatory body, the Online Gaming Authority of India, to administer the framework.

The Act is in addition to existing laws, but where there is an inconsistency with another law, the Act prevails only to the extent of that inconsistency. Its offshore reach is specifically framed around online money gaming services offered within India or operated from outside India.

What Are the Promotion and Regulation of Online Gaming Rules, 2026?

The Rules (notified by the Ministry of Electronics and Information Technology, or MeitY, in April 2026) flesh out the operational details of the Act. Key aspects covered include:

• The “Determination” process, how the Authority classifies a game as an online money game, online social game, or e-sport.
• The “Registration” process, including who must register, how registration is processed, and the validity of a Certificate of Registration, which may be valid for a period up to ten years unless surrendered, suspended or cancelled earlier.
• The Authority’s composition, functions and powers.
• User safety standards and grievance redressal mechanisms.
• Obligations for payment providers, advertisers and intermediaries.

The Rules operationalise the Act by setting out the framework for determination, registration, Authority functions, user safety features, grievance redressal and compliance obligations for online game service providers and other relevant stakeholders.

Key Definitions Businesses Must Understand

Online Money Game

An “online money game” is an online game, irrespective of whether it is based on skill, chance, or both, where a user pays fees, deposits money, or provides other stakes with the expectation of winning monetary or other enrichment in return. E-sports are expressly excluded if they satisfy the statutory conditions.

Note: The old distinction of ‘Skill vs. Chance‘ no longer applies. Any game of pure skill with monetary stakes is also outlawed. Fantasy sports, poker, rummy, and other prediction games paid in stakes come under this heading.

E-Sport

An online game that: (i) forms a part of multi-sports events; (ii) involves organised competitive multiplayer events governed by pre-defined rules; (iii) is covered under the National Sports Governance Act, 2025 and is registered with the Authority; (iv) the result of the game is entirely dependent on skill (physical dexterity, mental acuity, strategy); (v) may have entry fees and prizes; and (vi) involves no betting, wagering or stakes.

Online Social Game

An online game that: (i) does not involve staking of money or other stakes; (ii) may require subscription or access fee (not a wager); (iii) is provided solely for the purposes of entertainment, recreation, and development of skill; and (iv) is neither an online money game nor an e-sport.

Other Stakes

Anything equivalent or convertible to money, such as credits, coins, tokens or other in-game currency or objects, whether purchased directly or indirectly. In-game currency purchased using real money will qualify for this definition.

1. Is Online Gaming Legal in India in 2026?

Yes, partially. Online gaming is legal in India, but only in the permitted categories. E-sports (as defined in the Act) and online social games (such as free-to-play games, subscription-based games, and ad monetised games) are fully permitted. Online money games, involving the deposit of real money or other stakes, expecting monetary gains in return, are criminalised from 1 May 2026.

2. Are Real Money Games Banned in India?

Yes. The Act prohibits online money games and online money gaming services, including their offering, advertisement, and payment facilitation, and prescribes criminal penalties for specified contraventions. Offering, operation, aiding, abetting, or advertising of any online money game, or facilitation of payment for the same, is a criminal offence.

3. What Is an Online Money Game?

Any game played online in which a user makes payments, deposits money, or takes other forms of stakes such as virtual coins, credits or tokens purchased using real money, expecting monetary gain or some other kind of benefit as a result, is considered an online money game. The nature of the game, whether based on skill or chance, or both, is irrelevant. E-sports are explicitly excluded from this category despite the existence of entry fees and prize money, so long as they meet all the conditions set out in the Act.

4. Is the Skill vs. Chance Test Relevant Any More?

Not anymore. The Act has done away with this test once and for all by defining online money games as games that operate “irrespective of whether such game is based on skill, chance, or both.” This represents a paradigm shift from the previous legal position in that skill-based games were treated differently from gambling. Under the new law, the sole criterion for online money games is monetary stakes accompanied by monetary returns.

5. Are Fantasy Sports Apps Legal?

Traditional fantasy sports formats that require users to pay entry fees or other stakes with an expectation of winning money or other enrichment are likely to fall within the definition of online money games and cannot be offered as online money gaming services in India. A fantasy sports product may need to be redesigned as a non-staking online social game or, where legally possible, structured within the e-sports framework only if it satisfies all statutory conditions. Operators in this field must either switch to free-to-play and ad-supported models, which would be considered online social games or find a way of satisfying the requirements for recognition as an e-sport. Operators in this space must either restructure the product into a non-staking online social game model or assess whether the product can satisfy the statutory conditions for e-sports recognition and registration. However, a competitive or skill-based format will not automatically qualify as an e-sport unless all conditions under the Act and Rules are satisfied.

6. Are Rummy, Poker, and Paid Contests Allowed?

No. Online rummy, poker and other paid contests will fall within the prohibited online money game category where users pay fees, deposit money or provide other stakes with the expectation of monetary or other enrichment. Free-to-play versions may continue only if rewards, coins, credits or in-game assets are not equivalent or convertible to money and do not create a staking, wagering or cash-out structure.

7. Are Free-to-Play Games Allowed?

Yes. Free-to-play games are allowed under the category of online social games. Such platforms may generate revenue through ads, subscriptions or in-game purchases, so long as the latter are not considered “other stakes” that will lead to monetary gains or rewards. In-game rewards, currencies or assets must be confined to the game ecosystem and not be transferable or redeemable for money. However, if in-game rewards, currencies, credits or assets are equivalent or convertible to money, or are linked to an expectation of monetary or other enrichment, the game may be treated as an online money game.

8. Are E-Sports Allowed?

Yes, but with strict regulation. E-sports are recognised as a legal category in the Act and therefore allowed to charge entry fees as well as distribute prize money. In order to qualify as an e-sport, the following conditions must be met: (i) the game must be recognized under the National Sports Governance Act, 2025; (ii) it must be registered with the Online Gaming Authority of India; (iii) it must be played as organized multiplayer competitive events; and (iv) the outcome of the game must solely be determined by the player’s skill and not involve betting or wagering.

Caution: Operators should not assume that a competitive game becomes an e-sport merely because it involves skill, entry fees, or prize money. To qualify as an e-sport, the game must satisfy the statutory criteria, including recognition under the National Sports Governance Act, 2025, registration with the Authority or agency, multiplayer competitive format, skill-based outcome, and absence of betting, wagering, or other stakes.

9. Can Social Gaming Platforms Operate?

Yes. Online social games are another of the two lawful operating categories created by the Act. Platforms providing casual games, educational games, mobile games, and other forms of skill development or entertainment may continue operating, provided they do not involve money stakes or in-game assets capable of monetisation. Currently, there is no need to determine or register online social games unless the Central Government orders so for particular categories. Nonetheless, operators should be ready for a potential Suo motu determination by the Authority.

10. Do Gaming Startups Need Registration?

It depends on the category:

• Online Money Games: No registration is possible. Banned entirely.
• E-Sports: Registration is required where the online game is intended to be offered as an e-sport. The Authority processes the application through the determination and registration framework, and registration requires satisfaction that the e-sport is recognised under the National Sports Governance Act, 2025. The Certificate of Registration may be valid for a period up to ten years, unless surrendered, suspended, or cancelled earlier.
• Online Social Games: Registration is not automatic for every online social game. It may be required where the Central Government notifies a game or category for registration, or where the Authority considers registration necessary under the Rules, having regard to factors such as user harm, scale, transaction value, country of origin, public interest, or user protection.

Voluntary registration is no longer available under the final Rules. Online Gaming Service Providers (“OGSPs”) cannot self-certify compliance through a registration; they must await a government direction.

11. What Is the Online Gaming Authority of India?

The Online Gaming Authority of India is the new central regulator constituted under the Act, functioning as an attached office of MeitY and headquartered in the NCT of Delhi. It will comprise a Chairperson (an Additional Secretary of MeitY) and five other Members, all ex officio senior bureaucrats from central government ministries.

The Authority’s functions include:

• Determining whether a game is an online money game, an online social game, or an e-sport.
• Registering e-sports and (where directed) social games.
• Issuing directions, guidelines, and codes of practice.
• Inquiring into complaints and adjudicating user grievances.
• Coordinating with financial institutions and law enforcement for enforcement.
• Assisting enforcement and issuing directions or orders relating to online games, advertisements, and financial transactions; blocking of online money gaming services is dealt with under the Act where there is failure to comply with sections 5[1], 6[2], or 7[3].

Appeals from the Authority’s decisions lie before the Appellate Authority, the Secretary, MeitY.

12. What User Safety Features Are Required?

The Rules define “user safety features” broadly to include technical, procedural, operational, behavioural and system-related safeguards, assessed based on a risk assessment of the game. These may include:

• Age verification or age-gating mechanisms
• Time restrictions on gameplay
• Parental controls
• User reporting tools
• Grievance redressal mechanisms
• Counselling support
• Fair-play and integrity monitoring tools

Every online game service provider offering an online social game or e-sport must maintain a functional grievance redressal mechanism. It must also comply with directions, orders, guidelines, or codes of practice issued under the Act in relation to the designation of a point of contact and publication of contact details. User complaints unresolved by the OGSP can be escalated to the Authority and then to the Appellate Authority.

13. Can Influencers Promote Gaming Apps?

The answer will depend completely on the nature of the game that is to be advertised. Influencers, celebrities, and social media personalities can be criminally liable for advertising or promoting online money games. The penalties include imprisonment of up to two years and fines as much as ₹50 lakh. As per the Act, the responsibility to take care of the situation lies on all parties concerned in the advertising process, namely, the gaming company, advertising agency and the individual who promotes the product.

However, it is safe to promote the legally permitted categories like e-sports and online social games. Starting from 1 May 2026, influencers and their management teams are supposed to undertake due diligence prior to undertaking any promotion. This includes ensuring that the game they are promoting falls under the category of those that are allowed by the Act. In cases where there is any doubt about the legality of the game, they must avoid promotions till the situation is clarified.

 14. Can Brands Sponsor E-Sports?

Yes. Under the provisions of the Act, corporate sponsorship of registered e-sports events is legal. Given that e-sports are considered a legitimate competitive sporting activity, brands can legally sponsor such activities and engage in advertising related to them. However, it must be noted that in the case of sponsorship, the brand must ensure that the e-sport in question is registered under the Act as well as recognised under the National Sports Governance Act, 2025.

15. Can Payment Gateways Process Gaming Transactions?

Only legally permitted gaming categories. Banks, payment gateways, financial institutions, and other payment service providers are not supposed to process any transactions connected to online money games. Beginning 1 May 2026, such acts will amount to criminal offences and attract imprisonment of up to three years, along with fines that can go as high as ₹1 crore.

For e-sports and online social games, payment providers must:

• Verify Certificates of Registration before authorising funds where registration is mandated.
• Comply with the Authority’s directions on facilitation, routing, and settlement of payments.
• Immediately suspend transactions if the Authority issues a direction identifying a game as an online money game.
•  What Are the Penalties?

16. Are Founders or Directors Liable?

Yes. In cases where a company has committed an offence under the Act, liability does not lie only with the company itself. All individuals who were responsible for and in control of the relevant part of the business in which the offence was committed will also be liable unless they can prove that the offence was committed without their knowledge or that they had taken all reasonable precautions to prevent the offence.

This includes directors, managers, company secretaries, and any other officer who has consented to the commission of the offence, is guilty of complicity in the offence, or did not take reasonable precautions to prevent the commission of the offence. However, the Act provides immunity to independent directors or non-executive directors who were not involved in the operational decision-making process of the company.

17. Does the Law Cover Offshore Platforms?

Yes. The Act applies to online money gaming services offered within India as well as such services operated from outside India. Offshore platforms targeting Indian users with online money games may therefore face blocking, enforcement directions, and other action under the Act, depending on the facts and the nature of the service. This is because the Act explicitly covers online money gaming services provided within India or those operated outside India but targeting Indian customers.

The Central Government has wide powers under the Act to enforce its provisions. The Act allows authorised officers to investigate offences and, where statutory conditions are satisfied, enter physical or digital places, search and arrest without warrant persons reasonably suspected of having committed, committing, or being about to commit an offence under the Act. Blocking of information relating to online money gaming services is separately contemplated where there is failure to comply with sections 5, 6, or 7.

18. What Should Startups Do Immediately?

• Assess your product: Does it constitute an online money game? Seek legal advice immediately if there is any uncertainty.
• If you are an RMG platform, cease all online money game operations immediately.
• If you are pivoting: Restructure your revenue model to eliminate any staking or monetary-return element. Document the pivot clearly.
• Establish a functional grievance redressal mechanism and identify internal personnel who can act as the point of contact where required by directions, orders, guidelines or codes of practice issued under the Act.
• Review all advertising and influencer agreements.
• Brief your payment partners on your classification status.
• Monitor notifications from MeitY; further directions on registration, data retention, and user safety standards are expected.

19. What Documents Should Gaming Companies Prepare?

• Seek Legal opinion on game classification (online money game vs. online social game vs. e-sport).
• Updated terms of service and privacy policy compliant with the Act and Rules.
• Grievance redressal policy, internal escalation matrix and point-of-contact documentation, where required under applicable directions, orders, guidelines or codes of practice.
• Point of Contact designation documentation.
• Revenue model documentation demonstrating absence of wagering elements (for social game OGSPs).
• For e-sports: NSGA recognition application and Authority registration application.
• Board resolution acknowledging the new regulatory framework and assigning compliance responsibilities.

20. Can a Real-Money Gaming Startup Pivot?

Yes, but carefully. Two viable pivot structures exist:

Pivot to Online Social Games: Eliminate all monetary staking. Monetise through advertising, subscriptions, or in-app purchases where rewards cannot be redeemed for real money. This is the path most OGSPs are likely to pursue.

Pivot to E-Sports: Restructure as a competitive gaming platform meeting the Act’s definition, multi-player, skill-only, no wagering, recognition under NSGA 2025, and registration with the Authority. This path is more complex and requires navigating the still-evolving NSGA framework.

The transition window contemplated in the draft rules was not included in the final Rules. Legacy player funds will need to be managed on a case-by-case basis, and clarity from MeitY may be required.

21. What Should Investors Check Before Funding Gaming Startups?

• Confirm the startup’s game classification with independent legal advice.
• Review whether the revenue model involves any staking or wagering element.
• Check for pending litigation under prior gaming laws or GST disputes.
• Assess the strength of the e-sports or social game thesis against the Act’s definitions.
• For e-sports investments: verify the status of NSGA recognition and Authority registration.
• Include appropriate representations and warranties about regulatory compliance in transaction documents.
• Evaluate management’s personal liability exposure and the company’s compliance infrastructure.

22. What Should Advertisers Check?

• Before accepting any gaming advertising mandate, confirm the game’s classification through legal diligence.
• Maintain written records of the classification basis as a due diligence defence.
• Cease all ongoing campaigns for online money games immediately.
• Update standard advertising contracts to include representations from gaming clients on regulatory compliance.
• Where classification is ambiguous, pause campaigns until clarity is obtained.

23. What Should Payment Companies Check?

• Conduct a compliance audit of all existing gaming merchant relationships.
• Immediately suspend transactions for any merchant continuing to offer online money games.
• Recalibrate internal onboarding and KYC protocols for gaming merchants.
• Prepare systems to verify Certificates of Registration once the Authority issues direction on verification and transaction-gating.

24. What Is the Future of Gaming Startups in India?

The news is not all grim. India remains a massive gaming market with over 400 million gamers, and the Act explicitly seeks to promote innovation, attract responsible investment, and position India as a globally competitive gaming ecosystem. The two permitted categories, e-sports and online social games, represent a significant and growing opportunity.

The Downloadable Content, “DLC” ecosystem, global multiplayer tournaments, and the halo effect of international e-sports leagues offer viable commercial models for e-sports operators. Free-to-play casual games monetising through advertising, subscriptions, and non-wagering in-app purchases represent an equally large segment.

The key uncertainty in the near term is how the Authority exercises its powers, particularly its suo motu determination powers and the yet-to-be-prescribed user safety standards. The sector should treat 1 May 2026 as the start of a regulatory journey, not the end.

Startup Compliance Checklist

1. Game Classification
   • Obtain a legal opinion confirming whether your game is an online social game, e-sport, or online money game.
   • Document the revenue model in writing (how users pay, what they receive, whether rewards are redeemable for money).
   • Review in-game currency and virtual asset mechanics for “other stakes” exposure.
2. Regulatory Compliance
   • If offering e-sports: initiate the NSGA 2025 recognition process and Authority registration application.
   • Establish a functional grievance redressal mechanism and identify internal personnel who can act as the point of contact where required by directions, orders, guidelines or codes of practice issued under the Act.
   • Establish a grievance process that allows user complaints to be resolved internally, with escalation to the Authority and thereafter to the Appellate Authority where applicable.
   • Monitor MeitY notifications for mandatory determination or registration of social games.
3. Operations
   • Update terms of service and privacy policy.
   • Implement age verification or age-gating where relevant.
   • Brief and train internal compliance, product, and marketing teams.
4. Commercial Relationships
   • Review and update advertising and influencer agreements.
   • Provide payment partners with legal opinions or classification documentation.
   • Include gaming law compliance representations in investor documents.
5. Legacy Issues (former RMG operators)
   • Cease online money game operations immediately.
   • Develop a plan for reconciliation and return of legacy player funds.
   • Document the pivot structure with legal support.

Conclusion

India’s Promotion and Regulation of Online Gaming Act, 2025, and the 2026 Rules represent a major shift in Indian online gaming regulation. The framework moves away from the earlier skill-versus-chance debate for online money games and prohibits online games where users pay money or other stakes with an expectation of monetary or other enrichment.

In the case of start-ups and gaming businesses, the first priority will be establishing legal certainty regarding classification. Determining whether a given online social game constitutes a legal activity or an online money game is not always straightforward and may be determined by the design of in-game assets, the possibility to redeem rewards in the real world, and the revenue model of the gaming platform. Any errors made in classification could have severe consequences, with founders, directors, and employees potentially facing criminal charges.

The impact of the Act extends beyond gaming operators alone. Payment intermediaries, advertisers and influencers may face direct exposure where they facilitate or promote online money games. Investors, while not regulated in the same manner as operators or payment facilitators, should conduct enhanced legal diligence on product classification, revenue models, payment flows and management liability before investing in gaming businesses.

The Online Gaming Authority of India remains in its infancy, and its long-term regulatory strategy remains unclear. This will largely depend on how the Authority wields its determination and suo motu power, as well as the criteria it sets for user protection, compliance with rules, and data retention. Companies and stakeholders should actively participate in the regulatory process and stay abreast of notifications issued by the Ministry of Electronics and Information Technology (MeitY).

The Indian online gaming industry is moving into a new phase. While the legal landscape has drastically changed, there are many opportunities left untouched.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. The classification of any online game depends on its design, revenue model, payment flows, reward structure, user terms, in-game assets and actual operations. Gaming companies should obtain legal advice before launching, advertising, facilitating payments for, or restructuring any online game in India.

People Also Ask: Online Gaming Law in India 2026

Is online gaming banned in India in 2026?

No. Online gaming is not completely banned. Online money games are prohibited, while e-sports and online social games are permitted subject to the Act and Rules.

Are real money games banned in India?

Yes. Online money games involving payment of money or other stakes with an expectation of monetary or other enrichment are prohibited under PROGA 2025.

Are e-sports legal in India?

Yes. E-sports are recognised, but they must satisfy the statutory conditions, including recognition under the National Sports Governance Act, 2025 and registration with the Authority or agency.

Can influencers promote gaming apps in India?

Influencers should not promote online money games. Promotion of permitted online social games or e-sports should be undertaken only after classification and compliance diligence.

Do online social games need registration?

Not automatically in every case. Registration may be required where notified by the Central Government or directed under the Rules.

[1] Prohibition of online money game and online money gaming service.

[2] Prohibition of advertisement related to online money game.

[3] Prohibition of transfer of fund.