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Introduction 

In recent years, the online gaming sector has seen tremendous growth and is one of the fastest-growing components of the creative economy, contributing significantly to innovation, employment generation and export earnings. India possesses a large pool of skilled young professionals, strong technological capabilities and a rapidly growing domestic market, which together provide an opportunity for the country to assume a leadership role in the global value chain of online gaming. With this, the online gaming industry has also faced an environment of exploitation, abuse, with notable cases of fraud, money laundering, and other emerging cybercrimes. In order to protect the interests of players, ensure fair play and competition, safe and secure online gaming environment, the need for introducing and establishing dedicated gaming regulation was a need of the hour. 

On 20 August 2025, the Union government introduced a new bill, ‘Promotion and Regulation of Online Gaming Bill, 2025’ in Lok Sabha that seeks to prohibit online money gaming, including advertisements and financial transactions related to such platforms. From the introduction, the said bill was passed at 5 PM on the same date. Further, the upper house of parliament (Rajya Sabha) passed the bill on 21st August 2025. The bill can be seen as a progressive step towards building safer online gaming spaces for everyone, especially for our youth and combating the emerging cybercrime threats present in the online gaming landscape.

Key Highlights of the Bill

The Bill extends to the whole of India. It also applies to any online money gaming service offered within India or operated from outside the country but accessible in India.

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1. Definition of E-sports:

Section 2(1)(c) of the Bill defines e-sports as:-

(i)  is played as part of multi-sports events; 

(ii) involves organised competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules; 

(iii) is duly recognised under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3; 

(iv) has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players; 

(v) may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and 

(vi)shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes; 

2. Prohibition of Online Money Gaming and Advertisement thereof
   The Bill prohibits the offering of online money games and online money gaming services. It also bans all forms of advertisements or promotions connected to online money games. This includes endorsements by individuals or entities.
3. Financial Transactions
   Banks, financial institutions, and other intermediaries are barred from facilitating transactions related to online money gaming services.
4. Criminal Liability
   Violation of the provisions on online money gaming can result in imprisonment for up to three years, or a fine of up to ₹1 crore, or both. Repeat offenders face stricter punishment with higher fines and longer jail terms.
5. Cognizable and Non-Bailable Offences
   Offences relating to offering online money gaming services and facilitating financial transactions for such games are categorised as cognizable and non-bailable. This gives law enforcement agencies greater power to act without requiring prior approval.

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In conversation with CyberPeace ~

Shailendra Vikram Singh, Former Deputy Secretary (Cyber & Information Security), Ministry of Home Affairs, GOI . He highlighted that

"The passage of the Promotion and Regulation of Online Gaming Bill, 2025 in the Lok Sabha highlights the government’s growing priority on national security, public safety, and health in digital regulation. Unfortunately, the real money gaming industry, despite its growth and promise, did not take proactive steps to address these concerns. The absence of safeguards and engagement left the government with no choice but to adopt a blanket ban."Having worked on this issue from both the government and industry side, the clear lesson is that in sensitive digital sectors, early regulatory alignment and constructive dialogue are not optional but essential. Going forward, collaboration is the only way to achieve a balance between innovation and responsibility.”

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CyberPeace Outlook

The Promotion and Regulation of Online Gaming Bill, 2025, marks a decisive policy shift by simultaneously fostering the growth of e-sports, educational and social gaming, and imposing an absolute prohibition on online money games. By recognising e-sports as legitimate, skill-based competitive sports under the National Sports Governance Act, 2025, and establishing a central Authority for oversight, registration, and regulation, the Bill creates an institutional framework for safe and responsible development of the sector.  The Bill completely bans real money games (RMGs), regardless of whether they are skill-based or chance-based or both, hence it poses significant questions on RMG companies' legal standing, upon which the gaming industry has raised its conundrum. Further, it addresses urgent threats such as cybercrime, gaming addiction, online betting, money laundering, and the misuse of gaming platforms for illicit activities. The move reflects a balanced approach, encouraging innovation and digital skill-building, while safeguarding public order, consumer interests, and financial integrity.

References

1. https://prsindia.org/files/bills_acts/bills_parliament/2025/Bill_Text-Online_Gaming_Bill_2025.pdf
2. https://prsindia.org/billtrack/the-promotion-and-regulation-of-online-gaming-bill-2025
3. https://www.hindustantimes.com/india-news/rajya-sabha-clears-online-gaming-bill-a-day-after-lok-sabha-approval-101755766847840.html

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Introduction

The year, 2022 has been a year of transition and change for the gaming industry. This year esports and gaming including the industry’s greater increased acceptance by the sports authorities and higher prize pools for top players,  has been more commercial than ever, according to research by the year 2025 the industry will witness growth by 5 million dollars and around 420 million active gamers from India. Since, India is on the way to become world’s largest gaming market, with revenue earned in 2021 increasing by up to 28%, or 1.2 billion dollars, and predicted to reach 2 billion dollars by 2024 as a result of the COVID-19 expanding internet access throughout the country.

After a lengthy debate, the government has finally decided to bring online gaming under the purview of the law. The President of India has changed the rules governing e-sports and requested that the Sports Ministry and the Ministry of Electronics and Information Technology (MeitY) include e-sports in multi-sport competitions. India’s gaming sector has reached new heights this year, with the country winning its first bronze medal in the first esports event organized by this year’s Commonwealth Games, and this is only the beginning.

Indian government takes on E-sports

The Indian government has given esports a huge boost. It has been introduced into the traditional sports disciplines of the nation. Droupadi Murmu, the President of India, changed the regulations governing eSports using the authority “conferred by clause (3) of Article 77 of the Constitution,” and requested that “e-Sports be included as part of multi-sports events” from the Ministries of Electronics and Information Technology and Sports. Some crucial points will clarify the government’s position on e-sports.

• E-sports were added as a demonstration sport to the 2018 Asian Games in Jakarta, which meant that medals earned in the sport were not counted in the official total of medals.
• There is a greater desire for Esports to be integrated with school curricula.
• E-Sports (Electronic Sports) have been acknowledged by the Indian government as a component of multi-sport tournaments.

Why is e-sports important?

The Indian Esports Industry has worked hard to distinguish Esports from the broader category of “Gaming.” Esports is a competitive sport in which esports athletes compete in specific video game genres in a virtual, electronic environment using their physical and mental prowess, according to the industry.

According to studies, as individuals have gotten more screen aware and online gaming has become a part of their life, internet gaming not only improves fine motor skills but also sharpens the mind. The industry has the most users and stakeholders, and it has become critical to governing it; consequently, legislation is required to regulate it.

The online regulation bill 2022

The Online Gaming (Regulations) Bill, 2022, was recently filed in the Lok Sabha to create an effective regulatory mechanism for the online gaming business to prevent fraud and misuse of things related to or incidental to it. There are 20 sections spread throughout three chapters. It intends to establish an Online Gaming Commission, the authority, mandate, and jurisdiction of which will be specified by the Bill. An online gaming server will be licensed, relinquished, revoked, or suspended by the Commission’s key highlights of the bill to make it more clear

• The Bill establishes a regulating agency, the Online Gaming Commission (“OGC”), comprised of five members chosen by the Central Government, each with at least one specialist in the fields of law, cyber technology, and law enforcement experience.
• The OGC will be able to oversee the functions of online gaming websites, issue periodic or special reports on Online Gaming issues, recommend appropriate measures to control and curb illegal Online Gaming, grant, suspend, and revoke licenses for online gaming websites, and set fees for license applications and renewals.
• Without a website and a non-transferable and non-assignable license, the Bill proposes to make online gambling illegal. Anyone operating an online gaming server or website without a license risks up to three years in prison and a fine. The permission will be good for a six-year term.
• The license intended to be given under the Bill may be terminated or canceled if the licensee violates any of the license’s requirements or any of Bill’s provisions. However, the Bill does not apply to anybody providing backend services in India, including hosting and maintenance for any international gaming website situated outside of India.
• The bill also mentions the Foreign Direct Investment and Technology Collaboration in Online Gaming

Few misses in the bill that can be addressed to make it stronger and a better version

• The law does not address Know Your Customer (KYC) requirements, customer complaint procedures, advertising and marketing restrictions, user data protection, responsible gaming guidelines, and other concerns.
• In the bill, there is no clear distinction between money involved in the game. This is a matter of concern and needs to be addressed so the money laundering aspect can be determined.
• The distinction between “games of chance” and “games of skill” is not addressed in the Bill. Furthermore, the Bill does not specify whether its prohibitions apply only to for-real-money games or to free games.‍

Conclusion

Despite the bill’s flaws, it has offered optimism to the burgeoning gaming sector, which desperately needs a robust regulatory and legal framework free of ambiguity, allowing players to play safely, and encouraging entrepreneurs to enter the field with safety and security. An improved regulatory framework will increase job prospects while also assisting the government. A transparent framework will also aid in the protection of the rights of actors and stakeholders.

The race for global leadership in AI is in full force. As China and the US emerge as the ‘AI Superpowers’ in the world, the world grapples with the questions around AI governance, ethics, regulation, and safety. Some are calling this an ‘AI Arms Race.’ Most of the applications of these AI systems are in large language models for commercial use or military applications. Countries like Germany, Japan, France, Singapore, and India are now participating in this race and are not mere spectators. 

The Government of India’s Ministry of Electronics and Information Technology (MeitY) has launched the IndiaAI Mission, an umbrella program for the use and development of AI technology. This MeitY initiative lays the groundwork for supporting an array of AI goals for the country. The government has allocated INR 10,300 crore for this endeavour. This mission includes pivotal initiatives like the IndiaAI Compute Capacity, IndiaAI Innovation Centre (IAIC), IndiaAI Datasets Platform, IndiaAI Application Development Initiative, IndiaAI FutureSkills, IndiaAI Startup Financing, and Safe & Trusted AI.

There are several challenges and opportunities that India will have to navigate and capitalize on to become a significant player in the global AI race. The various components of India’s ‘AI Stack’ will have to work well in tandem to create a robust ecosystem that yields globally competitive results. The IndiaAI mission focuses on building large language models in vernacular languages and developing compute infrastructure. There must be more focus on developing good datasets and research as well.

Resource Allocation and Infrastructure Development

The government is focusing on building the elementary foundation for AI competitiveness. This includes the procurement of AI chips and compute capacity, about 10,000 graphics processing units (GPUs), to support India’s start-ups, researchers, and academics. These GPUs have been strategically distributed, with 70% being high-end newer models and the remaining 30% comprising lower-end older-generation models. This approach ensures that a robust ecosystem is built, which includes everything from cutting-edge research to more routine applications. A major player in this initiative is Yotta Data Services, which holds the largest share of 9,216 GPUs, including 8,192 Nvidia H100s. Other significant contributors include Amazon AWS's managed service providers, Jio Platforms, and CtrlS Datacenters. 

Policy Implications: Charting a Course for Tech Sovereignty and Self-reliance

With this government initiative, there is a concerted effort to develop indigenous AI models and reduce tech dependence on foreign players. There is a push to develop local Large Language Models and domain-specific foundational models, creating AI solutions that are truly Indian in nature and application. Many advanced chip manufacturing takes place in Taiwan, which has a looming China threat. India’s focus on chip procurement and GPUs speaks to a larger agenda of self-reliance and sovereignty, keeping in mind the geopolitical calculus. This is an important thing to focus on, however, it must not come at the cost of developing the technological ‘know-how’ and research. 

Developing AI capabilities at home also has national security implications. When it comes to defence systems, control over AI infrastructure and data becomes extremely important. The IndiaAI Mission will focus on safe and trusted AI, including developing frameworks that fit the Indian context. It has to be ensured that AI applications align with India's security interests and can be confidently deployed in sensitive defence applications.

The big problem here to solve here is the ‘data problem.’ There must be a focus on developing strategies to mitigate the data problem that disadvantages the Indian AI ecosystem. Some data problems are unique to India, such as generating data in local languages. While other problems are the ones that appear in every AI ecosystem development lifecycle namely generating publicly available data and licensed data. India must strengthen its ‘Digital Public Infrastructure’ and data commons across sectors and domains.

India has proposed setting up the India Data Management Office to serve as India’s data regulator as part of its draft National Data Governance Framework Policy. The MeitY IndiaAI expert working group report also talked about operationalizing the India Datasets Platform and suggested the establishment of data management units within each ministry.

Economic Impact: Growth and Innovation

The government’s focus on technology and industry has far-reaching economic implications. There is a push to develop the AI startup ecosystem in the country. The IndiaAI mission heavily focuses on inviting ideas and projects under its ambit. The investments will strengthen the IndiaAI startup financing system, making it easier for nascent AI businesses to obtain capital and accelerate their development from product to market. Funding provisions for industry-led AI initiatives that promote social impact and stimulate innovation and entrepreneurship are also included in the plan. The government press release states, "The overarching aim of this financial outlay is to ensure a structured implementation of the IndiaAI Mission through a public-private partnership model aimed at nurturing India’s AI innovation ecosystem.”

The government also wants to establish India as a hub for sustainable AI innovation and attract top AI talent from across the globe. One crucial aspect that needs to be worked on here is fostering talent and skill development. India has a unique advantage, that is, top-tier talent in STEM fields. Yet we suffer from a severe talent gap that needs to be addressed on a priority basis. Even though India is making strides in nurturing AI talents, out-migration of tech talent is still a reality. Once the hardware manufacturing “goods-side” of economics transitions to service delivery in the field of AI globally, India will need to be ready to deploy its talent. Several structural and policy interfaces, like the New Education Policy and industry-academic partnership frameworks, allow India to capitalize on this opportunity. 

India’s talent strategy must be robust and long-term, focusing heavily on multi-stakeholder engagement. The government has a pivotal role here by creating industry-academia interfaces and enabling tech hubs and innovation parks.

India's Position in the Global AI Race

India’s foreign policy and geopolitical standpoint have been one of global cooperation. This must not change when it comes to AI. Even though this has been dubbed as the “AI Arms Race,” India should encourage worldwide collaboration on AI R&D through collaboration with other countries in order to strengthen its own capabilities. India must prioritise more significant open-source AI development, work with the US, Europe, Australia, Japan, and other friendly countries to prevent the unethical use of AI and contribute to the formation of a global consensus on the boundaries for AI development. 

The IndiaAI Mission will have far-reaching implications for India’s diplomatic and economic relations. The unique proposition that India comes with is its ethos of inclusivity, ethics, regulation, and safety from the get-go. We should keep up the efforts to create a powerful voice for the Global South in AI. The IndiaAI Mission marks a pivotal moment in India's technological journey. Its success could not only elevate India's status as a tech leader but also serve as a model for other nations looking to harness the power of AI for national development and global competitiveness. In conclusion, the IndiaAI Mission seeks to strengthen India's position as a global leader in AI, promote technological independence, guarantee the ethical and responsible application of AI, and democratise the advantages of AI at all societal levels.

References

• ​​Ashwini Vaishnaw to launch IndiaAI portal, 10 firms to provide 14,000 GPUs. (2025, February 17). https://www.business-standard.com/. Retrieved February 25, 2025, from https://www.business-standard.com/industry/news/indiaai-compute-portal-ashwini-vaishnaw-gpu-artificial-intelligence-jio-125021700245_1.html
• Global IndiaAI Summit 2024 being organized with a commitment to advance responsible development, deployment and adoption of AI in the country. (n.d.). https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2029841
• India to Launch AI Compute Portal, 10 Firms to Supply 14,000 GPUs. (2025, February 17). apacnewsnetwork.com. https://apacnewsnetwork.com/2025/02/india-to-launch-ai-compute-portal-10-firms-to-supply-14000-gpus/
• INDIAai | Pillars. (n.d.). IndiaAI. https://indiaai.gov.in/
• IndiaAI Innovation Challenge 2024 | Software Technology Park of India | Ministry of Electronics & Information Technology Government of India. (n.d.). http://stpi.in/en/events/indiaai-innovation-challenge-2024
• IndiaAI Mission To Deploy 14,000 GPUs For Compute Capacity, Starts Subsidy Plan. (2025, February 17). www.businessworld.in. Retrieved February 25, 2025, from https://www.businessworld.in/article/indiaai-mission-to-deploy-14000-gpus-for-compute-capacity-starts-subsidy-plan-548253
• India’s interesting AI initiatives in 2024: AI landscape in India. (n.d.). IndiaAI. https://indiaai.gov.in/article/india-s-interesting-ai-initiatives-in-2024-ai-landscape-in-india
• Mehra, P. (2025, February 17). Yotta joins India AI Mission to provide advanced GPU, AI cloud services. Techcircle. https://www.techcircle.in/2025/02/17/yotta-joins-india-ai-mission-to-provide-advanced-gpu-ai-cloud-services/
• IndiaAI 2023: Expert Group Report – First Edition. (n.d.). IndiaAI. https://indiaai.gov.in/news/indiaai-2023-expert-group-report-first-edition
• Satish, R., Mahindru, T., World Economic Forum, Microsoft, Butterfield, K. F., Sarkar, A., Roy, A., Kumar, R., Sethi, A., Ravindran, B., Marchant, G., Google, Havens, J., Srichandra (IEEE), Vatsa, M., Goenka, S., Anandan, P., Panicker, R., Srivatsa, R., . . . Kumar, R. (2021). Approach Document for India. In World Economic Forum Centre for the Fourth Industrial Revolution, Approach Document for India [Report]. https://www.niti.gov.in/sites/default/files/2021-02/Responsible-AI-22022021.pdf
• Stratton, J. (2023, August 10). Those who solve the data dilemma will win the A.I. revolution. Fortune. https://fortune.com/2023/08/10/workday-data-ai-revolution/
• Suri, A. (n.d.). The missing pieces in India’s AI puzzle: talent, data, and R&D. Carnegie Endowment for International Peace. https://carnegieendowment.org/research/2025/02/the-missing-pieces-in-indias-ai-puzzle-talent-data-and-randd?lang=en
• The AI arms race. (2024, February 13). Financial Times. https://www.ft.com/content/21eb5996-89a3-11e8-bf9e-8771d5404543

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