The Union government’s decision to impose a blanket ban on real money gaming (RMG), with the passage of the Promotion and Regulation of Online Gaming Bill in the parliament, has drawn sharp criticism from Karnataka IT minister Priyank Kharge, who called it a “knee-jerk reaction” that could damage India’s digital economy.
The online gaming sector has grown rapidly in recent years, generating close to ₹20,000 crore annually through GST and income tax. Over 2,000 gaming startups operate in the country, many of them providing coding, design, and backend services for global platforms. Industry estimates suggest that more than two lakh jobs in IT, AI design, and the creative economy are linked to this ecosystem. The sector has also attracted around ₹23,000 crore in foreign direct investment (FDI) over the past five years, said Kharge.
Kharge warned that the ban threatens this entire ecosystem. “Thousands of people will be unemployed, the gaming talent pool will shrink, and allied sectors like data centres, advertising, and cybersecurity will be hit. If the government is talking about building a $10 trillion digital economy, how does shutting down this vertical send the right signal to global investors?” he said.
A senior government official had told HT that the Centre weighed the revenue from online money games against their social costs and concluded that the latter outweighed the financial gains. The official added that 45 crore players have lost ₹20,000 crore to online money games.
{{/usCountry}}A senior government official had told HT that the Centre weighed the revenue from online money games against their social costs and concluded that the latter outweighed the financial gains. The official added that 45 crore players have lost ₹20,000 crore to online money games.
{{/usCountry}}The government is also of the view that these money games not only create a financial burden but also contribute to behavioural changes like addiction and related suicides among youth.
Beyond jobs and revenue, Kharge argued that prohibition will push users to unregulated offshore platforms. Industry observers have also raised similar concerns, pointing out that platforms based in China and Eastern Europe often operate without mechanisms like KYC or tax compliance, raising risks of money laundering, data theft, and even terror financing.
The minister said the industry itself has been demanding regulation, not prohibition. “Addiction won’t end by banning platforms. Instead, users will flock to offshore servers where no safeguards exist. If they lose money there, who will they complain to?” he asked. Estimates suggest that India could lose nearly ₹8 lakh crore annually to unregulated foreign operators if players migrate en masse.
Government officials have acknowledged that the ban will affect the industry but maintain that companies can reorient themselves towards recreational and casual games that do not involve monetary stakes.
Kharge, however, drew a comparison with India’s earlier attempt to block pornography websites, saying such bans only drove users to VPNs and unregulated domains. He also criticised the timing of the Online Gaming Bill, describing it, along with other recent pieces of legislation like the the Constitution Amendment Bill, 2025, the Government of Union Territories (Amendment) Bill, 2025, and the Jammu and Kashmir Reorganisation (Amendment) Bill, 2025, as a “diversion” from the Election Commission’s ongoing scrutiny of electoral rolls.
“It is common sense that illegal markets will threaten national security. How many URLs can you block? They will just reappear under different domains. And if servers move abroad, they go beyond India’s ambit,” Kharge said.
HT reached out to IT ministry officials for a comment but did not immediately receive a response.