The draft Promotion and Regulation of Online Gaming Rules, 2025 (draft rules) are an attempt to structure a digital gaming regulatory framework. They distinguish between legitimate online gaming, such as esports and social games, and prohibited activities defined as online money games. This balances the growth of safe, skill-based gaming while preventing the social and financial harm caused by gambling.
Under section 19 of the Promotion and Regulation of Online Gaming Act, 2025, the draft rules will set up the Online Gaming Authority of India (OGAI), an independent regulatory body with civil court powers. Although expedient, this raises significant concerns about regulatory overreach, procedural fairness and administrative discretion. The OGAI may initiate inquiries, compel attendance, classify games, cancel registrations and impose penalties.
Aman Avinav
Partner
Phoenix Legal
Such rights may infract separation of powers doctrine and suffer from excessive delegation. The OGAI may determine of its own volition whether or not any game is an online money game. This may breach the states’ exclusive jurisdiction over betting and gambling. Such overlap may lead to enforcement inconsistency and invite judicial scrutiny.
Any company applying for registration must provide full details about its games’ workings, revenue models, target ages, grievance redress and safety features. Once registered, a company has to notify the OGAI of material changes, including updates to gameplay, monetisation and status under the National Sports Governance Act, 2025. Although transparent, this structure skews the burden on small and medium-sized developers, who often lack sufficient resources.
The draft rules require a three-tiered grievance framework. This starts with an internal complaints mechanism, moving to a grievance appellate committee and finally involving the OGAI itself. Intended to strengthen consumer protection, this multi-layered system may be time and resource intensive and cause procedural delay.
The OGAI has wide discretion as to enforcement and orders. It may impose monetary penalties, suspend or cancel licences and prohibit operations “as it deems fit”. The definition of “online money games” as any digital activity involving “stakes, fees, or consideration in the nature of a wager” introduces further ambiguity.
Larger esports organisations and international investors welcome the recognition of esports as a legitimate sporting discipline. However, domestic developers and operators of skill-based games worry that the binary approach hampers regulatory nuance. Many gaming companies call for technical experts, behavioural scientists and industry representatives to be included in the OGAI’s structure, so that policy decisions reflect technological and commercial realities. Startups fear that the costs of registration, disclosure and reporting may stifle innovation and consolidate the market.
Financial institutions and intermediaries worry that they are the bodies to carry out real-time transaction monitoring. Fintech companies have approached the Reserve Bank of India to identify gaming-related transactions, process refunds and distinguish legitimate transfers from those of banned platforms. Without standardised protocols, institutions may simply block entire transaction categories.
The definitions of stakes and wagers must incorporate standards, such as minimum thresholds, distinguishing casual participation from hardcore gambling. The OGAI should have an advance classification unit to advise whether a game is licit. The overlapping roles of the Ministry of Information and Broadcasting and the OGAI ought to be combined into a single-window system. The nature, intent and gravity of breaches should determine penalties, with allowances for voluntary disclosure and first-time infractions.
The current 180-day period for refunding pre-existing user balances should be extended to one year for banks to trace and reimburse dormant or cross-border accounts. A committee of the central and state governments should harmonise enforcement and avoid conflicting interpretations.
The draft rules are a sincere effort to establish accountability and user safety. However, success will depend on tempering enforcement zeal with procedural fairness, industry consultation and evidence-based policymaking.
Aman Avinav is a partner at Phoenix Legal
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