Promotion and Regulation of Online Gaming Act 2025 Comes into Force — Real-Money Gaming Banned in India
Summary
The Promotion and Regulation of Online Gaming (PROG) Act 2025, passed by Parliament in August 2025, came into force in May 2026, effectively banning real-money gaming platforms operating in India.
●The Act cited national security concerns — digital wallets and cryptocurrencies used for money laundering, and offshore platforms serving as communication channels for terror organisations.
●Platforms including Dream11, Gameskraft, and Games24x7, which had more than 600 million users collectively, have shut down or pivoted to non-money-gaming models.
●The Act's commencement coincides with the Supreme Court's May 27, 2026 ruling upholding ₹1.12 lakh crore in retrospective GST demands, creating a situation where an industry has been simultaneously banned and billed.
Digital Economy & Fintech
This sub-topic has appeared in 2 UPSC Prelims questions.
The Promotion and Regulation of Online Gaming (PROG) Act 2025, passed in August 2025 and effective May 2026, is the first central legislation in India to specifically govern — and ban — real-money online gaming.
●Prior to the Act, online gaming regulation was governed by the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, which the Ministry of Electronics and IT (MeitY) amended in April 2023 to create an Online Gaming Self-Regulatory Organisation (OGSRO) framework.
●The PROG Act superseded this framework.
●Constitutional basis: Parliament legislated under Entries 31 (Posts and telegraphs, telephones, wireless, broadcasting) and 97 (Residuary powers) of the Union List, arguing that online gaming platforms are communication networks, not games of chance under State List Entry 34.
●The Act's national security justification invokes Articles 19(2) and 19(6) — reasonable restrictions on the freedoms of speech/expression and trade/occupation.
●Offshore platforms are explicitly covered — an operator accessible in India via VPN or app stores is considered operating in India.
The Act creates a paradox alongside the SC's GST ruling: Parliament banned the activity (PROG Act) while the Court affirmed tax liability for the same activity — raising Article 265 questions about taxing something Parliament has declared illegal.
Factual Pointers
Practice · 1 question
Consider the following statements about the Promotion and Regulation of Online Gaming (PROG) Act 2025:
1. The Act was passed by Parliament in August 2025 invoking Union List Entries 31 and 97, framing online gaming platforms as communication networks.
2. The Act superseded the MeitY Online Gaming Self-Regulatory Organisation (OGSRO) framework created in April 2023.
3. Under the Act, only offshore gaming platforms accessible via VPN are banned — Indian-incorporated platforms are permitted to continue with a licence.
Which of the statements given above is/are correct?
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