Why online gaming ban may not pass judicial scrutiny
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Why online gaming ban may not pass judicial scrutiny
The proposed law is arbitrary because it marks a reversal from the government’s consistent stance of fostering the gaming industry. It is disproportionate, because it leans on the heaviest tool – prohibition – when lighter options like regulation and oversight exist. It doesn’t differentiate between offshore betting operators and homegrown gaming firms, ignoring crucial differences in their compliance posture. It risks being overly paternalistic, eroding citizens’ autonomy to decide how they spend their leisure. It paints offshore betting services and domestic RMG operators with the same brush by prohibiting both. It offers no consumer protection since they operate outside Indian law, leaving users without recourse. An outright prohibition is the most intrusive step of all. Time and again, evidence shows that bans do not eliminate addictive behaviours, but only displace them into darker, unregulated markets. In 2023, the industry employed over 1,00,000 people and this number is projected to double by the end of 2025. In the landmark Justice K S Puttaswamy vs Union of India case, the Supreme Court affirmed that the right to privacy is fundamental.
The recent online gaming ban is unlikely to survive constitutional scrutiny. The Promotion and Regulation of Online Gaming Bill, 2025, passed on Thursday in the Rajya Sabha, prohibits online money games, or real money games (RMGs), where users deposit money with the expectation of winnings. Its stated goal is to shield people from harms like addiction, financial loss, and fraud.
The proposed law is arbitrary because it marks a reversal from the government’s consistent stance of fostering the gaming industry. It is disproportionate, because it leans on the heaviest tool – prohibition – when lighter options like regulation and oversight exist. It doesn’t differentiate between offshore betting operators and homegrown gaming firms, ignoring crucial differences in their compliance posture. And it risks being overly paternalistic, eroding citizens’ autonomy to decide how they spend their leisure.
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Fundamental rights, like the right to do business, are protected against arbitrary state action. For years, the government has recognised the contribution of online gaming to India’s digital economy. In Parliament, whenever asked what it intends to do about RMGs, the government’s consistent answer has been that they will be regulated, not prohibited. In 2023, the Information Technology (IT) Rules were amended to create a regulatory framework for money gaming. Companies were invited to consultations on the Prevention of Money Laundering Act, to ensure more transparency, and on the Digital Personal Data Protection Act, to build better safeguards. In 2023, the Goods and Services Tax was reformed to tax the RMG market.
The signals were clear – build for the long term, because the state intends to regulate and tax you.
On the back of these, an ecosystem took shape. In 2023, the industry employed over 1,00,000 people and this number is projected to double by the end of 2025. INR 23,000 crore was invested in online gaming between 2020-2024. Companies poured money into know-your-customer checks, anti-money laundering protocols, and grievance redressal mechanisms because they believed they were building in line with the government’s stated policy.
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The government has offered no new facts or reasoning to justify this reversal. Addiction, fraud, and money laundering were all known risks in 2023, when the IT Rules were amended to regulate money gaming with the clearly stated objective of expanding gaming innovation.
The proposed law treats unequals equally. It paints offshore betting services and domestic RMG operators with the same brush by prohibiting both. Offshore platforms heighten laundering concerns because of the cross-border nature of transactions. They also offer no consumer protection since they operate outside Indian law, leaving users without recourse. Domestic operators, by contrast, have been seeking legitimacy and have voluntarily adopted industry codes on platform fairness and anti-money laundering. Treating both alike ignores this distinction and ends up pushing users towards the very unsafe operators the law claims to guard against.
The law also fails the test of proportionality. Indian jurisprudence has long required that state action be the least intrusive measure available to achieve stated aims. An outright prohibition is the most intrusive step of all. Globally, regulators have turned to measures like self-exclusion tools, voluntary time and money limits, and parental controls. Indian industry-led standards were aligning with such trends, and also towards anti-money laundering compliance and certifications to ensure games are fair and randomised.
The constitutional principle of proportionality also requires a direct linkage between government action and the stated objective. Time and again, evidence shows that bans do not eliminate addictive behaviours, but only displace them into darker, unregulated markets. Global examples of coercive action to limit gaming, like in the United States, also demonstrate tax losses and users’ migration to offshore platforms. In those spaces, the risk of money laundering is even higher due to the cross-border nature of transactions.
In the landmark Justice K S Puttaswamy vs Union of India case, the Supreme Court affirmed that the right to privacy is fundamental. The Court observed that privacy protects an individual’s liberty by securing “dignity” and “autonomy” and includes the right to determine how one should exercise the freedoms guaranteed by the Constitution. This includes the right of an individual to have a non-exhaustive choice of preferences of various facets of life, such as family, marriage, faith and even what to wear or drink.
Interventions with an individual’s right to autonomy and self-determination on a facet of their life as basic as recreation are against the rights conferred on citizens by Articles 19 and 21. By denying people the right to choose the kind of recreational activity they want to indulge in, a case could be made that the state is interfering with their autonomy as reaffirmed under Puttaswamy.
Courts in India have also reaffirmed that fundamental rights cannot be curtailed on the basis of shifting standards of public morality. A blanket ban on RMGs has undoubtedly been driven by morality-based disapproval rather than analysis of alternative enforcement tools. If challenged, the ban risks being struck down for violating constitutional guarantees.
Pandey and Joshi are public policy experts working with Koan Advisory Group, New Delhi. These are their personal views
Why online gaming ban may not pass judicial scrutiny
The proposed law is arbitrary because it marks a reversal from the government’s consistent stance of fostering the gaming industry. It is disproportionate, because it leans on the heaviest tool – prohibition – when lighter options like regulation and oversight exist. It doesn’t differentiate between offshore betting operators and homegrown gaming firms, ignoring crucial differences in their compliance posture. It risks being overly paternalistic, eroding citizens’ autonomy to decide how they spend their leisure. It paints offshore betting services and domestic RMG operators with the same brush by prohibiting both. It offers no consumer protection since they operate outside Indian law, leaving users without recourse. An outright prohibition is the most intrusive step of all. Time and again, evidence shows that bans do not eliminate addictive behaviours, but only displace them into darker, unregulated markets. In 2023, the industry employed over 1,00,000 people and this number is projected to double by the end of 2025. In the landmark Justice K S Puttaswamy vs Union of India case, the Supreme Court affirmed that the right to privacy is fundamental.
The recent online gaming ban is unlikely to survive constitutional scrutiny. The Promotion and Regulation of Online Gaming Bill, 2025, passed on Thursday in the Rajya Sabha, prohibits online money games, or real money games (RMGs), where users deposit money with the expectation of winnings. Its stated goal is to shield people from harms like addiction, financial loss, and fraud.
The proposed law is arbitrary because it marks a reversal from the government’s consistent stance of fostering the gaming industry. It is disproportionate, because it leans on the heaviest tool – prohibition – when lighter options like regulation and oversight exist. It doesn’t differentiate between offshore betting operators and homegrown gaming firms, ignoring crucial differences in their compliance posture. And it risks being overly paternalistic, eroding citizens’ autonomy to decide how they spend their leisure.
Advertisement
Fundamental rights, like the right to do business, are protected against arbitrary state action. For years, the government has recognised the contribution of online gaming to India’s digital economy. In Parliament, whenever asked what it intends to do about RMGs, the government’s consistent answer has been that they will be regulated, not prohibited. In 2023, the Information Technology (IT) Rules were amended to create a regulatory framework for money gaming. Companies were invited to consultations on the Prevention of Money Laundering Act, to ensure more transparency, and on the Digital Personal Data Protection Act, to build better safeguards. In 2023, the Goods and Services Tax was reformed to tax the RMG market.
The signals were clear – build for the long term, because the state intends to regulate and tax you.
On the back of these, an ecosystem took shape. In 2023, the industry employed over 1,00,000 people and this number is projected to double by the end of 2025. INR 23,000 crore was invested in online gaming between 2020-2024. Companies poured money into know-your-customer checks, anti-money laundering protocols, and grievance redressal mechanisms because they believed they were building in line with the government’s stated policy.
Advertisement
The government has offered no new facts or reasoning to justify this reversal. Addiction, fraud, and money laundering were all known risks in 2023, when the IT Rules were amended to regulate money gaming with the clearly stated objective of expanding gaming innovation.
The proposed law treats unequals equally. It paints offshore betting services and domestic RMG operators with the same brush by prohibiting both. Offshore platforms heighten laundering concerns because of the cross-border nature of transactions. They also offer no consumer protection since they operate outside Indian law, leaving users without recourse. Domestic operators, by contrast, have been seeking legitimacy and have voluntarily adopted industry codes on platform fairness and anti-money laundering. Treating both alike ignores this distinction and ends up pushing users towards the very unsafe operators the law claims to guard against.
The law also fails the test of proportionality. Indian jurisprudence has long required that state action be the least intrusive measure available to achieve stated aims. An outright prohibition is the most intrusive step of all. Globally, regulators have turned to measures like self-exclusion tools, voluntary time and money limits, and parental controls. Indian industry-led standards were aligning with such trends, and also towards anti-money laundering compliance and certifications to ensure games are fair and randomised.
The constitutional principle of proportionality also requires a direct linkage between government action and the stated objective. Time and again, evidence shows that bans do not eliminate addictive behaviours, but only displace them into darker, unregulated markets. Global examples of coercive action to limit gaming, like in the United States, also demonstrate tax losses and users’ migration to offshore platforms. In those spaces, the risk of money laundering is even higher due to the cross-border nature of transactions.
In the landmark Justice K S Puttaswamy vs Union of India case, the Supreme Court affirmed that the right to privacy is fundamental. The Court observed that privacy protects an individual’s liberty by securing “dignity” and “autonomy” and includes the right to determine how one should exercise the freedoms guaranteed by the Constitution. This includes the right of an individual to have a non-exhaustive choice of preferences of various facets of life, such as family, marriage, faith and even what to wear or drink.
Interventions with an individual’s right to autonomy and self-determination on a facet of their life as basic as recreation are against the rights conferred on citizens by Articles 19 and 21. By denying people the right to choose the kind of recreational activity they want to indulge in, a case could be made that the state is interfering with their autonomy as reaffirmed under Puttaswamy.
Courts in India have also reaffirmed that fundamental rights cannot be curtailed on the basis of shifting standards of public morality. A blanket ban on RMGs has undoubtedly been driven by morality-based disapproval rather than analysis of alternative enforcement tools. If challenged, the ban risks being struck down for violating constitutional guarantees.
Pandey and Joshi are public policy experts working with Koan Advisory Group, New Delhi. These are their personal views