India’s online gaming bill redraws the playing ad-spend playbook

The Promotion and Regulation of Online Gaming Bill, 2025, passed by the Lok Sabha yesterday, is poised to redraw India’s digital entertainment economy. Introduced by Electronics and IT Minister Ashwini Vaishnaw and cleared by the Cabinet, the Bill creates a decisive split between e-sports and social or educational games on one side, and real money gaming (RMG) on the other.

For the advertising, media, and marketing fraternity, the consequences are profound. A law designed primarily to safeguard consumers could, in practice, upend revenue flows that have powered everything from prime-time cricket sponsorships to influencer-led performance campaigns and billboards at many a highway.

At its core, the legislation proposes a blanket prohibition on “online money games” — defined as any digital game based on skill, chance, or both, where players stake money in the hope of financial returns. If enacted, the Bill would outlaw the offering, operation, promotion, advertisement, or facilitation of such games.

Banks and payment providers would be barred from processing related transactions. Advertising violations would carry up to two years in prison and fines of INR 50 lakh; operating such platforms could lead to three years’ imprisonment and fines of INR 1 crore. Repeat offenders face even steeper penalties.

Addressing the Lok Sabha, Vaishnaw noted that the digital and online ecosystem has grown exponentially in India. “On one hand are casual games and e-sports, which are educational and entertaining. On the other are online money games that have impacted the lives of multiple families. These firms operate opaquely and bring hazards including money laundering and terror funding,” he opined.

Enforcement will fall to a newly created Online Gaming Authority, empowered to categorise games, settle disputes, and issue compliance codes. The regulator will also hold investigative powers, including search, seizure, and arrests without warrant under the Bharatiya Nagarik Suraksha Sanhita, 2023.

A ban with teeth

The sharp line drawn against RMG strikes at the financial heart of India’s online gaming market. According to the 2025 FICCI-EY Media & Entertainment Report, India’s online gamer base expanded to 488 million in 2024, with an addition of 33 million new gamers, including both casual and real money gamers, across all devices. During the year, more than 155 million gamers engaged with RMG sub-segments such as fantasy sports, rummy, poker, and other transaction-based games, registering a 10% year-on-year growth.

By industry estimates, 86% of sector revenues currently come from RMG formats led by companies like Dream11, Games24x7, Winzo, MPL, Zupee, GamesKraft, 99Games, KheloFantasy and My11Circle. Their importance to the marketing ecosystem is hard to overstate. According to TAM Sports data, top advertisers under the ecommerce-gaming category in IPL 17 in 2024 were Dream11, My11Circle, Zupee and Winzo Games. These aggressive advertisers could face existential uncertainty if the Bill is passed.

An industry expert told Campaign that RMG contributes close to 4% of India’s overall advertising expenditure. Though this may appear small, the category has been expanding rapidly, fuelled by wider smartphone penetration, the ease of digital payments, and the popularity of gaming in tier-2 and tier-3 cities.

“Ad investments from RMG firms remain in the mid-single digits as a share of the total market, but the pace of growth has made it a significant player. Recent regulatory actions, such as the 28% GST levy, have already tightened margins, prompting operators to recalibrate acquisition budgets and concentrate more heavily on performance-driven campaigns,” he noted.

With this ban, that momentum halts abruptly. For broadcasters, digital platforms, sports franchises, and the influencer economy, the knock-on effects will be immediate.

Dealing with a curveball

Unsurprisingly, the industry has mounted resistance. The All India Gaming Federation (AIGF) has appealed to Union Home Minister Amit Shah, warning that prohibition could cripple over 500 startups and alienate millions of players. Their argument: regulation, not prohibition, is the key to protecting consumers while preventing migration to offshore or underground networks.

Anurag Dhandhi, Business Head at Probo, echoed this view. While conceding that the Bill marks a major step towards safeguarding the interests of all stakeholders, including consumers, employees, vendors, investors, and promoters, he cautioned that “a more balanced regulatory approach would better safeguard consumers, generate sustainable tax revenues, create jobs, and prevent the migration of users to unregulated platforms.”

Ananay Jain, Partner at Grant Thornton Bharat, sees both promise and peril. “The blanket restrictions on certain real-money games may stifle segments of the gaming market that were previously generating significant revenue, particularly in mobile gaming and tournament-based platforms.”

The implications for the advertising economy are unambiguous. With RMG brands suddenly removed from the field, broadcasters will need to fill sponsorship gaps in marquee events like IPL. Influencer agencies will lose some of their most aggressive performance-marketing clients. Digital platforms will feel the pinch in high-value categories like programmatic video and social inventory.

Legal grey zones

The Bill is not without its legal vulnerabilities. Betting and gambling are state subjects under the Constitution, and several High Courts have ruled that skill-based games cannot be banned outright. The Supreme Court has also reserved judgment in the INR 21000 crore Gameskraft case, which will determine whether skill games for stakes amount to gambling.

Akshat Rathee, co-founder and managing director of Nodwin Gaming, flagged the risk of ambiguity. He lauded the government’s intent to recognise and promote esports, as highlighted in the Bill, as an encouraging step towards building a structured and globally competitive ecosystem.

“However, for this vision to truly materialise, it is critical that the terminology used in the bill, particularly the distinctions between esports, online gaming, online social gaming, and online money gaming be clearly defined and uniformly understood. The absence of precise definitions has often led to ambiguity and conflation around the term 'esports',” Rathee added. This lack of definitional clarity could complicate enforcement, potentially ensnaring legitimate platforms alongside banned ones.

A silver lining: E-sports and social gaming

If RMG is the loser, e-sports emerges as the Bill’s big winner. For the first time, it has been formally recognised as a legitimate competitive sport under the National Sports Governance Act, 2025. The Ministry of Sports is tasked with setting standards for tournaments, building training academies, and integrating e-sports into the national sports agenda.

The Bill also seeks to promote educational and social games, enabling the government to register titles, foster development platforms, and back culturally relevant content. By doing so, it positions gaming as a tool for skill-building, youth engagement, and even digital literacy.

Industry voices have been quick to seize on this as a turning point. “E-sports thrives on mastery, discipline, and sustained dedication over time. With government recognition secured and infrastructure development beginning to take shape, India is positioned to carve out a strong role in the global esports and gaming ecosystem. What comes next is critical—directed investment in competitive venues, training bootcamps, education-led programmes, and scholarship opportunities that can help groom new talent, be it future world-class athletes or gaming creators shaping digital culture,” said Abhishek Sakpal, an independent marketing consultant.

At the same time, e-sports’ new legitimacy creates an opening. Structured tournaments, streaming platforms, and gaming creators could emerge as the next frontier for marketers seeking engaged, young audiences. But scale will not come overnight, and returns will depend heavily on how quickly infrastructure — from arenas to bootcamps — takes shape.

Animesh ‘Thug’ Agarwal, Co-founder and CEO of S8UL, captured this balancing act: “By drawing a clear line between skill-based competitive gaming and betting, it safeguards the integrity of our ecosystem while opening doors for structured growth.”

Thornton’s Jain added that by clearly defining permissible gaming categories, the Bill resolves the ambiguity that previously left legal skill-based games in a grey zone. This clarity encourages domestic and international investment, facilitates professional tournaments, streaming platforms, and educational initiatives, and unlocks new revenue streams and employment opportunities.

Pranshul Dwivedi, a senior product manager at an e-sports company agreed. He felt that whether athletes, teams, platforms, or game publishers, this clarity means they can function without ambiguity, assured that the rules of the sector are firmly in place. “When the government’s intent is matched by regulatory precision, India has the chance not only to join the global esports movement, but to emerge as one of its major centres,” Dwivedi added.

For brand marketers, this opens legitimate avenues for sponsorships, content collaborations, and community-building, particularly among Gen Z audiences. The question is whether e-sports can scale quickly enough to offset the advertising void left by RMG.

A watershed moment

Compared to earlier patchwork laws, the 2025 Bill represents a sweeping, centralised attempt to regulate digital gaming. Sakpal noted that the new framework “balances innovation, accountability, and player protection, giving the industry room to grow while mitigating social risks.”

Yet the transition will be messy. The sudden withdrawal of RMG money could destabilise advertising revenues in the short term, even as new opportunities in e-sports, social gaming, and educational titles gradually expand.

Dwivedi pointed out that long-term success will depend on “effective enforcement, collaboration with stakeholders, and adaptive updates to match emerging technologies, including VR/AR gaming, metaverse applications, and international e-sports.”

For agencies and brand marketers, this is the start of a new playbook. The traditional reliance on fantasy cricket and RMG sponsorships is over; the future may lie in cultivating e-sports audiences, educational gaming platforms, and culturally relevant casual titles.

The Lok Sabha’s vote marks a watershed moment — not just for gaming, but for the intertwined worlds of advertising, marketing, and media. After the Rajya Sabha's assent, and pending the President's sanction, India’s gaming economy will no longer operate in grey zones. The guardrails are up. For marketers, the challenge is to recalibrate — and to do it fast.