A planned ban on online gaming threatens a rapidly expanding business that has become a source of jobs, tax income, and foreign investment in India. The decision threatens to eliminate 200,000 jobs, Rs 25,000 crore in foreign direct investment, and Rs 20,000 crore in tax income.  It may also drive 45 crore Indian users to move towards unlawful offshore services.

According to industry estimates, the online gaming sector today employs over 200,000 highly qualified people and is home to over 400 start-ups, which have raised around Rs 25,000 crore in foreign direct investment (FDI). The sector also makes a considerable contribution to government finances, with a possible loss of Rs 20,000 crore in tax revenue if limitations are imposed, an especially important aspect given the present economic recession.

The business also generates almost Rs 6,000 crore per year for associated segments like advertising and technological services. Experts worry that a ban might drive over 45 crore Indian users towards illegal offshore services, increasing their hazards and eroding regulatory supervision. They contend that, rather than prohibitions, a well-defined and balanced regulatory structure would better serve user safety while protecting jobs, investment, and revenue opportunities.

“Instead of cracking down on these notorious offshore firms, the government is choosing to penalize Indian companies that follow rules, pay taxes, and create jobs,” said an industry representative. “This flawed approach not only risks shutting down a legitimate industry but also allows the black market to thrive unchecked.”

Earlier, the Union Cabinet adopted a measure promoting and regulating internet gambling, and the government is likely to prohibit platforms that provide any online money gaming service.  The bill is set to be introduced in Parliament on Wednesday.

According to a source, the Union Cabinet approved the Promotion and Regulation of Online Gaming Bill on Tuesday, which prohibits online money gaming or its advertisements and prescribes imprisonment or fine, or both, for those offering or advertising them, in order to distinguish such games from eSports or online social games.

The Bill proposes that anyone who provides online money gambling services in violation of the requirements will face up to three years in prison, a fine of up to Rs 1 crore, or both. The clauses also provide for up to two years in prison, a fine of up to Rs 50 lakh, or both, for individuals who engage in illegal advertising.

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