India's real-money gaming industry is facing unprecedented challenges. On August 19, 2025, the Indian federal cabinet approved the draft "2025 Online Gaming Promotion and Regulation Act," planning to completely ban all online games involving real money transactions (Real-Money Gaming, abbreviated as RMG). This move marks the Indian government's strong regulation of the real-money gaming industry, which may have a profound impact on the industry.
According to the latest report from gaming venture capital firm Lumikai, India's online gaming generated $3.8 billion in revenue in the fiscal year 23-24, of which real-money games contributed $2.4 billion. On average, more than 100 million players participate in such games every day, and the scale of users is astonishing. By 2024, the Indian real-money gaming market size has exceeded $3.2 billion, accounting for 85% of the total size of India's online gaming market.
However, with the change in government policy, the real-money gaming industry is under tremendous pressure. For example, Mobile Premier League (MPL) announced significant layoffs of local staff in India and suspended all gaming operations involving monetary transactions. Additionally, Dream11 also stated that the ban reduced its revenue by 95% overnight. These actions reflect the industry's rapid response to policy changes.
Despite facing difficulties, the Indian real-money gaming industry still has some positive factors. India has the most real-money gaming startups in the world, surpassing the United States and the United Kingdom. These companies have accumulated rich game development experience and a large user base, laying the foundation for transformation. The widespread use of smartphones and low data tariffs in India provide a good infrastructure for the development of the gaming industry. Real-money gaming companies have established mature payment and user management systems, which can be smoothly transferred to other types of games.
Esports and social games are rapidly developing in India, becoming potential transformation directions for real-money games. By 2029, the market size of India's online gaming industry is expected to reach $9 billion, with non-real-money games occupying a larger share. The esports sector is growing rapidly, with the Indian esports industry reaching 3 billion Indian rupees (about 257 million RMB) in 2021, expected to reach 11 billion Indian rupees (about 942 million RMB) by 2025, with 1.5 million esports players. Casual and social games are also important development directions. These games do not involve real money transactions but can profit through advertising, subscription fees, and access fees.
In the face of the government's ban, real-money gaming companies need to take immediate action to respond to the changes. First, switch to the free-to-play (F2P) model, developing casual, social, and esports games that do not involve real money transactions. Profit through advertising, in-app purchases (virtual items, skins, effects, etc.), subscription models, and membership services. Secondly, delve into the esports sector, where the cost of hosting esports events is relatively low, with Skyesports League events offering prizes of 2.5 million Indian rupees (about 2.1 million RMB). Expanding to overseas markets is also a strategy, although the main revenue of Indian real-money gaming companies currently comes from domestic sources, they can consider expanding to countries and regions with clear regulatory frameworks for real-money gaming, such as Europe, Latin America, and Southeast Asia. Finally, strengthen communication with regulatory agencies, participate in setting industry standards and codes of conduct, and enhance industry transparency and social responsibility.
Additionally, companies also need to address payment channel restrictions and adjust advertising strategies. The draft bill stipulates that no bank, financial institution, or payment service provider may provide funding channels or authorization for real-money games, meaning the lifeline of real-money gaming payments will be cut off. Companies need to completely reconstruct the payment model, transitioning to a fully virtual currency system, and establish a game economy system based on virtual currency and virtual items. Regarding advertising restrictions, even if real-money games are banned, companies can still promote other types of games through legal means. Meta has allowed advertisers to place real-money gambling game ads in India, but they must obtain Meta's written permission and comply with age restrictions.
Policy adjustments may impact the Indian government's tax revenue and employment. Real-money games contribute hundreds of millions of dollars/nearly ten billion RMB in goods and services tax to the Indian government each year. If the bill is fully implemented, it could lead to the loss of 400,000 companies, 200,000 jobs, and an annual tax revenue loss of 200 billion rupees (about 16.49 billion RMB). These economic factors may affect the final passage and implementation of the bill.
Despite facing challenges, India's gaming market still has tremendous development potential. By 2029, the market size of India's online gaming industry is expected to reach $9 billion, with non-real-money games occupying a larger share. The rapid development of esports and social games provides new growth points for the industry. Companies need to be flexible in responding to policy changes and adjusting business strategies to survive and develop in the new regulatory environment.
In conclusion, the Indian government's ban on real-money games has had a profound impact on the industry. Companies need to quickly adapt to the new policy environment and explore new business models to maintain competitiveness in the fiercely competitive market. In the future, esports and social games may become new growth points for the Indian gaming industry. However, the development of the industry still needs to pay attention to policy changes and market demands to achieve sustainable development.
