of players into the hands of illegal matka networks, offshore gambling websites, and fly-by-night operators who operate without any safeguards, consumer protections, or taxation,” the letter stated. (Matka is a form of illegal gambling that originated in India, involving betting on random numbers.)
The three industry bodies estimated that real-money gaming startups in India have a combined enterprise valuation of ₹2 trillion (approximately $23 billion), generate cumulative revenues of ₹310 billion (around $3.6 billion), and contribute ₹200 billion (roughly $2.29 billion) annually in direct and indirect taxes. They also project a 28% compound annual growth rate that would double the industry’s size by 2028. The industry groups warned that the blanket ban could result in the loss of more than 200,000 jobs and the closure of over 400 companies.
A similar letter was also written to Indian Home Minister Amit Shah by these three industry associations. Some Indian and global investors are also calibrating their response, a person familiar with the matter told TechCrunch. The source did not want to be named, as the plans are not yet public.
Publicly listed Nazara Technologies, which has previously invested in real-money gaming platforms including PokerBaazi and Classic Rummy, saw its share price fall 12.84% on Wednesday to close at ₹1,220 (about $14). The company, however, earlier clarified in a stock exchange filing (PDF) that it has “no direct exposure” to real-money gaming businesses and that these platforms do not contribute to its revenues based on its latest reported financials.
Dream Sports and MPL, two of the top real-money gaming startups, declined to comment, while WinZO, another popular real-money startup, did not respond.
The bill was passed by voice vote in a noisy lower house less than seven minutes after it was introduced for debate. It now requires approval from the upper house and the president to become law.
Meanwhile, some companies in casual gaming and esports have welcomed the move.
“We applaud this decision as it allows us to focus on the ongoing concerns as a business — monetization, retention, and most importantly, building great IP for India and the world, rather than having to explain to our audiences what we are to begin with,” said Sumit Batheja, CEO and co-founder of Ginger Games, which is part of Krafton’s Indian gaming incubator and makes hyper casual games.
Krafton is the South Korean gaming company behind the popular battle royale game PUBG.
Akshat Rathee, co-founder and managing director of esports company NODWIN Gaming, which is also a subsidiary of Nazara Technologies, said the law needs to have clear distinctions between esports, online gaming, online social gaming, and online money gaming that are clearly defined and uniformly understood.
“The absence of precise definitions has often led to ambiguity and conflation around the term ‘esports.’ Such overlaps can create confusion not just for regulators, but also for players, teams, investors, and organizers who are working hard to build this industry,” he stated.
Bal also told TechCrunch that the bill “decimates esports,” as an authority set up by the Indian government would decide the validity of esports.
“The impact goes beyond real money gaming to the broader ecosystem of businesses that depend on it and indeed presents grave implications for the AVGC [Animation, Visual Effects, Gaming, and Comics] sector as a whole,” she said.
In 2023, the Indian government amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to curb “user harm” from real-money games and proposed self-regulatory bodies to limit illegal betting and gambling while allowing legitimate games. However, the self-regulation approach faltered due to conflicts among industry stakeholders over enforcement and standards.
New Delhi imposed a 28% tax on online gaming in 2023 to curb real-money play, prompting an outcry from industry stakeholders. Top investors — including Tiger Global, Peak XV Partners, and Kotak — urged Modi to reconsider, warning of $2.5 billion in write-offs and the potential loss of one million jobs. The tax, however, remained in place, even as companies challenged its retrospective application in the Supreme Court. Recent reports suggest it may be revised upward to 40% under new rules.
Rohit Kumar, a founding partner of the New Delhi-based public policy firm The Quantum Hub, told TechCrunch that the real problem with the new bill is a lack of due process.
“Regulation is necessary, but abrupt moves like this undermine India’s reputation as a stable, predictable investment destination. If concerns existed, the government should have signaled them clearly from the outset,” he said.
We’re always looking to evolve, and by providing some insight into your perspective and feedback into TechCrunch and our coverage and events, you can help us! Fill out this survey to let us know how we’re doing and get the chance to win a prize in return!