Bet off the table: India rewrites online gaming future

The Online Gaming Act halts real-money play, pushing jobs, capital, and brands to pivot toward e-sports, free-to-play, and global growth paths.

- BY JAIDEEP GHOSH

The passage of the Promotion and Regulation of Online Gaming Act, 2025, has sent a powerful regulatory shockwave through India’s digital economy, effectively outlawing all real-money games (RMG) while simultaneously attempting to promote e-sports and social gaming.

This is a fundamental restructuring of a sector that had drawn millions in venture capital, provided thousands of jobs, and created a new advertising category in India’s sports economy.

The ban, while presented as a step to foster a “healthy” ecosystem, creates a significant short-term social and economic cost. The Act has already been challenged in the courts, though most larger players seem reluctant to do so and instead intend to focus on a pivot strategy.

JOBS AT STAKE: HUMAN CAPITAL FALLOUT

The most immediate and tragic impact of the ban is on human capital. The prohibition could threaten over two lakh jobs across more than 400 startups. The affected functions—including operations, customer support, and marketing—are those directly tied to the now-defunct RMG business model.

A significant portion of this talent pool is expected to migrate, including to the now-promoted e-sports and game development studios. However, many core skills of the RMG business are not directly transferable to meet the needs of e-sports and social gaming sectors. This creates a need for rapid reskilling in areas such as live ops, community management, and IP development.

Further, while the government aims to boost the creative economy and game development exports, this poses a substantial risk of “brain drain”.

CAPITAL SHOCK AND INVESTOR RETREAT

Investors value predictability! This law marks one of the largest sudden value erosions of VC-backed assets in the Indian digital economy, comparable to earlier corrections in the edtech sector.