Gaming bodies write to Amit Shah; urge to block blanket ban, warn of Rs 20,000 crore tax loss

India’s leading online gaming industry associations have urged home minister Amit Shah to intervene in the government’s proposed Promotion and Regulation of Online Gaming Bill, 2025, warning that a blanket ban on real-money games could cripple the sector, cost the exchequer nearly Rs 20,000 crore annually in taxes, and drive crores of users to unsafe offshore operators.

In a joint representation, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF) and Federation of Indian Fantasy Sports (FIFS) said the draft law which seeks to prohibit all real-money games, including those based on skill would “strike a death knell” for an industry that today employs more than 200,000 people, has attracted Rs 25,000 crore in foreign direct investment (FDI), and contributes over Rs 20,000 crore in annual tax revenues.

“The only beneficiary of this bill will be illegal offshore gambling operators,” they said in the letter, a copy of which ET has seen. “By shutting down regulated and responsible Indian platforms, crores of users will be driven to unregulated matka networks and offshore betting websites without safeguards, consumer protections or taxation.”

These associations represent online gaming companies including Dream11, Games 24×7, Mobile Premier League (MPL), Zupee and Gameskraft.

These companies have raised capital from marquee investors such as Tiger Global, Peak XV Partners, Alpha Wave Global, ChrysCapital and Z47 (earlier Matrix Partners India).

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According to the draft Online Gaming Bill, 2025, which is expected to be tabled in the Parliament on Wednesday, the government aims to prohibit real money games such as fantasy sports, digital rummy or e-poker, while promoting e-sports. The bill was approved by the Union Cabinet on Tuesday.

Also Read: Government proposes dedicated regulator for online gaming under new law

The proposed law seeks to curb online real money gaming by declaring any advertisement or promotion of such games as an offence, while also banning facilitation of any transaction or authorisation of funds by bank or financial institution for the purpose of such games.

Sector at risk

According to the associations, the online skill gaming industry has grown into a Rs 2 lakh crore enterprise with Rs 31,000 crore in revenue, and is projected to double in size by 2028. India’s gamer base has surged from 360 million in 2020 to over 500 million in 2024, making it one of the world’s fastest-growing digital entertainment markets.

Executives cautioned that a ban would derail this growth trajectory, deter global investors, and lead to the shutdown of more than 400 companies. “This legitimate, job-creating industry is being treated on par with offshore gambling operators, when what is needed is progressive regulation, not prohibition,” one industry leader said.

“Instead of protecting people, this bill risks exposing them to fraud, exploitation, and unsafe practices may end up helping illegal offshore operators, which is one of the biggest national security threats to the country today,” the letter stated.

Call for regulation

The proposed bill empowers a new regulator to register titles, block unlawful content, and investigate violations. It also prescribes heavy penalties: up to three years’ imprisonment and Rs 1 crore in fines for operators, and up to two years and Rs 50 lakh for advertisers.

But industry bodies argue that smart regulation – distinguishing skill from chance, enforcing user safety, and ensuring taxation clarity – is a better alternative.

“With your guidance, India can set a global example by building a safe, transparent and thriving digital gaming ecosystem,” the industry groups told Shah in their letter, seeking a meeting with him to discuss the issue.

Also Read: Proposed online gaming bill could wipe out India’s real money gaming sector, push users offshore, warn industry leaders