How the Online Gaming Law in India Could End Up in the Supreme Court

Online gaming in India has drastically increased over the last two decades. As it has gained in popularity, regulation and government oversight have struggled to keep pace. New developments have changed what was once a fragmented and state-regulated market into a single unified one, but one that is also strictly prohibitive. Industry stakeholders in the country are attempting legal forms of resistance to the changes.

As is the case in many countries, the online gaming sector in India has risen sharply in popularity over the last two decades. Brought on by increasing access to the internet and a near-ubiquitous adoption of smartphones, online gaming has become an incredibly popular pastime. Different forms of gaming include online gambling, esports, fantasy sports and many others. However, while the online gaming industry in India has flourished, regulation has struggled to keep pace, and the balance between consumer protections, industry growth and regulation has been a difficult one.

This balance seems to have fallen strongly in favor of regulatory consumer protections recently, with the Indian government passing the Promotion and Regulation of Online Gaming Act, 2025, in August of last year. Industry stakeholders are questioning the wisdom of this new regulation and are seeking legal recourse against it, which seems like it will end up before the Indian Supreme Court.

What Exactly is the New Online Gaming Regulatory Ecosystem in India?

The new act seeks to set out a framework on which online gaming activities can be classified, licensed and regulated across the entirety of India. It attempts to ensure that online gaming as an industry can continue to grow, while also enforcing consumer protections and responsible gaming, and safeguarding against illegal gambling and betting. The most contentious part of the act is in how it treats real-money games, such as those that can be found at the best online casinos, which can also include things like fantasy sports, poker and any other game where a financial prize can be at stake.

Many platforms that are strongly affected by this act, even prohibited entirely, were once incredibly popular, seeing hundreds of thousands or even millions of users on a regular basis. Despite their popularity, however, these platforms had previously existed under a very fragmented and unclear legal framework. The new online gaming act aims to bring India up to speed with other, more modern, developed online gaming environments. While some industry stakeholders are attempting to fight the new regulation, they cannot deny that it brings clarity and unification to what was previously an uncertain and fragmented landscape.

Why Did the Government Deem Such Regulation Necessary?

You might be asking why the Indian government has decided that now is the time for such regulatory changes. There are a few reasons that this regulation seems appropriate from the government’s point of view. It was widely acknowledged that the previous regulatory environment was unsatisfactory, and rising pressure on social mediafrom various groups on the nature of responsible gaming was being felt. The industry was also growing at a prodigious rate, which always brings regulatory and government oversight, as they seek to portion out some of that success to the greater populace.

What Are the Arguments Against the New Regulation?

As we mentioned earlier, the new Promotion and Regulation of Online Gaming Act, 2025, is far from widely praised, with many industry stakeholders choosing to challenge it legally. But what exactly are they claiming is the problem with the act? There are a range of different complaints, with some of the likely issues that will see discussion before the Supreme Court being among the following:

Is this Within the Jurisdiction of the Central Government?

One of the big questions that many stakeholders and legal experts are asking is whether or not the central government actually has the right to pass legislation like this. Under the Indian Constitution, betting and gambling traditionally fall under the purview of the individual states. Despite the claims that the act seeks to unify the online gaming landscape, some states, such as Karnataka and Tamil Nadu, have already passed their own regulations around online gaming.

The argument is that the federal government has stepped over its jursdictional authority by passing the new act, and that the states should be responsible here. Petitions against the new act have been filed under this argument in several different high courts around the country, such as in Delhi, Karnataka and Madhya Pradesh.

Violation of Fundamental Rights

Another strong argument against the new act is that it might violate some rights that the Indian Constitution guarantees. Specifically, the right to freedom of trade and business, and the right to freedom of expression. Several companies have been outspoken about the blanket prohibition being an unjustified and disproportionate reaction.

Contravening Existing Precedent

Usually in law, precedent is everything, and for many decades, Indian courts have ruled that games of skill are allowable and significantly different from games of chance, with more than one case establishing that skill-based games exist outside of gambling prohibition rules. The new act, however, defines things differently. It states that any games with a stake are prohibited, regardless of whether they are based on skill or chance.

Economic and Industry Backlash

Despite the wording of the new act stating that it seeks to ‘promote online gaming as an emerging industry’, the immediate consequences of the act’s implementation have seen dire consequences for the industry. Many stakeholders in the industry are reporting huge losses, and there have been layoffs and falling investment rates.

What Will Happen Now?

The future is uncertain, but the Indian Supreme Court is treating the matter seriously. It has transferred any pending and future challenges of the new Online Gaming Act from the different high courts to itself. It seems the Supreme Court is willing to recognize that the claims surrounding the new act are serious enough to warrant a proper judicial response.

It seems that the Supreme Court intends to scrutinise the practical implications of the law as well as its intent. Some lawyers have commented that they expect the deliberations not just to include the constitutional rightness of the act, but also whether or not the new law is fairly balancing innovation and regulation in what could be a valuable digital industry for India.

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