India’s government has brought into force a comprehensive new regulatory framework for online gaming, with the Promotion and Regulation of Online Gaming Act 2025 and its accompanying Regulation of Online Gambling Rules 2026 both taking effect on May 1. The framework establishes a centralised regulatory body, the Online Gaming Authority, and creates a formal classification system designed to separate permissible social and skill-based games from prohibited online money games.
The introduction of the rules comes less than a year after India enacted a broad ban on real-money online gambling in August 2025, making this one of the most dramatic regulatory overhauls in global iGaming history.
The classification system divides online games into three categories: prohibited online money games, where users pay fees or stakes with a reasonable expectation of monetary gain; permissible social games; and permissible e-sports. The Online Gaming Authority will have 90 days from the receipt of a complete application to make a classification determination, giving operators a defined timeline for regulatory certainty. Decisions will consider the game’s revenue model, the nature of any fees or rewards, and whether in-game assets can be monetised outside the platform environment.
A two-tier grievance system has also been introduced, giving users pathways to appeal classification decisions first to the platform, then to the Authority, and finally to the Secretary of MeitY as an appellate authority. Enforcement proceedings are designed to be digital-first, with a goal of completing investigations within 90 days. Penalties will be proportionate, taking into account factors including user harm, severity, recurrence and the gains derived from any violation.
The backdrop to this regulation is striking. India banned real-money iGaming after data suggested that a third of the population had lost a combined $2.3 billion annually on online wagers. The August 2025 legislation criminalised not just online play but its advertisement, with potential penalties including fines and prison sentences of up to five years. Critics argued at the time that the ban would simply redirect Indian players to unregulated offshore operators rather than eliminating demand.
The new framework appears designed partly to address that concern, by creating a legal space for non-monetary gaming while maintaining the prohibition on real-money gambling and cutting off licensed payment providers from facilitating prohibited transactions.
For the broader iGaming industry, India represents a cautionary tale about how quickly a major emerging market can close to commercial operators. The country had been widely viewed as one of the most promising growth opportunities in global online gaming before the 2025 ban. The new regulations restore some structure but make the legal landscape significantly more complex for any operator previously active in the market, and the prohibition on real-money gaming remains firmly in place.
