Centre Plans Single Law for Online Gaming, Ending State-Wise Confusion

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The Indian central government is planning to introduce a unified regulatory framework for online gaming, replacing the current patchwork of state-level laws. This move aims to address user safety, financial risks, and jurisdictional conflicts.

According to Mint, the home ministry has formed a committee with its officials, legal experts, and gaming industry executives to discuss the way forward. The committee is evaluating whether a new law is required to distinguish gaming from gambling. This distinction has remained contentious despite the Supreme Court classifying online gaming as skill-based and gambling as chance-based.

The government sees strong growth potential in the sector. “The industry has made multiple presentations showcasing its scope to attract foreign investments. A single law will provide regulatory clarity and allow India’s Financial Intelligence Unit (FIU) to crack down on offshore platforms,” said an anonymous source cited by Mint. The ministry of electronics and information technology’s (Meity) proposed self-regulatory body framework has not effectively addressed this issue.

The move is also driven by two concerns: taxation clarity and offshore platforms hosting gaming and betting. Online gaming companies have challenged GST notices worth ₹1.12 trillion in the Supreme Court. The court stayed these notices, and hearings will begin on March 18.

Unified regulation would benefit the industry, said Jay Sayta, a technology and gaming lawyer. “Gaming companies play a crucial role in India’s nascent gaming industry. Stifling them can push users towards black-market platforms,” he added.

Several states have attempted to regulate online gaming individually. Karnataka tried to ban it in 2021, Maharashtra sought restrictions in 2023, and Tamil Nadu imposed state-specific regulations earlier this year. Each move faced legal challenges, highlighting the need for a unified law.

Industry Leaders Advocate for Unified Regulation to Boost Investments

An executive from a leading online gaming firm told Mint that state-wise regulations create “regulatory spillage” since gamers interact across states. “A single law can revive foreign investments, which dropped by over 90% due to regulatory uncertainty,” the executive said.

Online gaming companies generated $2.4 billion in revenue in FY24, according to a report by Google and venture capital firm Lumikai. Sporta Technologies (Dream11), Gameskraft Technologies, and Play Games24X7 accounted for $1.7 billion of this revenue.

These companies thrived between 2020 and 2022 during the pandemic. Between March 2021 and 2022, Dream11, Games24X7, and Galactus Funware (Mobile Premier League) raised nearly $1 billion from global investors like Sequoia Capital and Tiger Global.

The Centre’s regulatory push follows previous efforts. In 2022, Meity became the nodal ministry for the sector, and the home ministry formed a group of ministers to examine the matter.

Industry leaders believe unified regulation can consolidate startups into larger entities. Roland Landers, CEO of the All India Gaming Federation (AIGF), said fragmented regulations have “significantly slowed” foreign investments. “A progressive, centralized regulatory framework is essential to sustain investor interest,” he added.

Meity’s earlier proposal for self-regulatory bodies to certify real-money games did not take off, as officials questioned their impartiality. The government now believes a single law is crucial for regulating India’s growing online gaming sector.

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