India online gaming ban shakes sports and startups as Dream11 exits BCCI deal

What the new Act bans, and why it landed now

India has pulled the plug on real-money online gaming. The Promotion and Regulation of Online Gaming Act 2025, cleared by Parliament and signed by President Droupadi Murmu on August 22, bans fantasy sports, rummy-for-cash, poker, prediction markets, and similar money-based formats. In one move, the world’s biggest fantasy sports market switched off its cash engine. The government cited addiction, financial losses, fraud, money laundering, psychological harm, and national security risks as the reasons for the India online gaming ban.

The law is unambiguous: if a platform takes, stakes, or pays out real money, it is illegal. That includes operating, advertising, or promoting such services. Violations can draw up to three years in prison or fines up to ₹1 crore. Regulators can order app stores to delist apps, direct internet providers to block sites, and tell payment companies to cut off flows.

This is a sharp turn from India’s earlier approach, which tried to separate “games of skill” from “games of chance.” Courts had recognized fantasy sports and rummy as skill-heavy in several cases, while states kept pushing back with their own bans. In 2023, the center floated a self-regulatory model under IT rules and slapped 28% GST on real-money gaming at full face value—moves that stressed the sector but didn’t kill it. The new Act ends the debate by prohibiting real-money play across the board.

The government’s logic is straightforward. The money moved fast; the harms did too. Regulators worried about young users, aggressive advertising during cricket broadcasts, and payment trails that were hard to police. After years of patchwork rules and courtroom fights, lawmakers chose a blanket prohibition rather than another round of carve-outs.

• All real-money gaming—fantasy, poker, rummy, prediction markets—is banned nationwide.
• Operators, promoters, and advertisers face penalties up to three years’ jail or ₹1 crore in fines.
• App stores and ISPs can be directed to block access; payment intermediaries to halt deposits and payouts.
• Platforms must let users withdraw existing balances; fresh deposits are barred.
• Non-monetary social and skill-based games remain permitted, if no cash or equivalents change hands.

Enforcement will lean on familiar playbooks: app takedowns, domain blocks, and payment freezes. Expect directions to payment gateways and banks to flag merchant categories, along with adtech platforms curbing promotions. Cross-border apps won’t get much of a runway—network-level blocks and wallet restrictions tend to move quicker than creative workarounds.

The fallout: startups, sports money, and what replaces cash play

India’s biggest platforms have pivoted to damage control. Dream11 suspended paid contests, told users they can withdraw existing wallet balances, and stopped new deposits. It also walked away from its India cricket team jersey sponsorship with the BCCI, a ₹358 crore, three-year deal it signed in 2023. The contract had a clause allowing a penalty-free exit if regulations killed the core business—exactly what happened.

Other real-money heavyweights—MPL, Games24x7 (My11Circle), PokerBaazi, Zupee, WinZO, and Probo—signaled similar steps. Paid formats are off; withdrawals stay open for a transition period. WinZO said it would remove affected games from August 22. Probo said money-linked formats are discontinued. Across the board, companies are telling users funds are safe and can be cashed out.

On the legal front, the industry isn’t reaching for the courtroom. Dream Sports co-founder and CEO Harsh Jain said the company will not challenge the law and will focus on what’s next rather than fighting the government. Gameskraft echoed that stance, calling itself a responsible corporate citizen and ruling out litigation. Read that as a clean break—operators see the political signal and the legal odds and are choosing a reset.

The shock is financial as well as cultural. Between 2020 and 2022, real-money gaming in India drew more than $1 billion in funding. Fantasy sports alone punched above its weight in ad spending, peak-time TV slots, and cricket sponsorships. With the Asia Cup around the corner, BCCI officials emphasized they will follow government policy to the letter. That means the board is now scrambling for a new jersey sponsor and likely reworking its sponsor mix for upcoming tournaments.

Expect a wider advertising chill. Influencer promotions for cash contests will go dark. Sports broadcasts will shed a familiar layer of logos. Payment companies that processed deposits and withdrawals will see an immediate drop in volumes from these categories. The GST base tied to entry fees and platform fees will shrink. It’s a domino effect that touches broadcasters, adtech, esports organizers, and even small-town event promoters who relied on contest prizes to juice participation.

For users, the changes are simple and blunt. Paid contests are gone; you can withdraw what’s in your wallet; you can’t add more. If you see cash games running on an app or website, it’s likely non-compliant. VPNs won’t solve payment rails being cut, and fake apps will be a bigger risk. State cyber cells are expected to warn against rogue operators and phishing around “refunds” and “withdrawal assistance.”

What replaces cash play? Companies are racing to rebuild their products around non-monetary formats: free-to-play modes, season passes, subscriptions, ad-supported tournaments with non-cash rewards, and collectibles that stop short of cash equivalents. Fantasy apps may lean into social prediction, trivia, and stat-based challenges for badges or merchandise. Card and board-game platforms will push casual play, creator tools, and private rooms without stakes. Esports organizers can continue competitions with sponsored rewards instead of prize money.

There’s also a possible export angle. Some studios will try to build for overseas markets where real-money play is allowed, while keeping Indian consumer versions non-monetary. That means dual product lines, separate compliance stacks, and stricter geofencing. It’s not easy, but gaming studios already do this for content ratings and payments in different countries.

Will courts see a challenge anyway? Maybe from smaller operators or industry bodies arguing federal overreach or the old “skill vs chance” distinction. But the Act’s sweep leaves little oxygen for that argument. Parliament has now drawn a bright, national line: no real money in online games, skill or not. The most telling indicator is the choice by the sector’s leaders not to contest it.

Sports will feel it beyond the jersey. Real-money gaming pumped sponsorship money into IPL teams, regional leagues, digital-only tournaments, and athlete endorsements. That cash filled gaps left by a shaky tech ad market and a muted crypto category. Without it, teams will turn to consumer brands, fintech, and telecom to backfill, likely at lower yields in the near term. Expect more category exclusivity and bundled media deals as rights holders get creative.

On the regulatory side, watch for follow-through: app store compliance deadlines, payment circulars, and a public list of prohibited services. Ad standards bodies may update guidelines to make sure brand ambassadors, influencers, and broadcasters don’t promote banned formats. State police units could coordinate with central agencies to go after repeat violators and offshore shells targeting Indian users.

The social trade-offs will be debated for months. Families burnt by losses will welcome the guardrail. Gamers who enjoyed skill-based contests without overspending will feel unfairly swept up. Parents will like the cleaner app stores; others will worry about a chill on innovation. This is the tightrope with vice-adjacent industries—harms are real, but so are livelihoods. Policymakers have chosen certainty over nuance.

India’s move stands out globally. China curbed playtime for minors and tightened monetization, but did not outlaw all cash-linked formats. Europe focuses on licensing and consumer protections. The United States is a patchwork: fantasy sports are legal in many states; online betting is regulated in others. India has opted for a bright-line rule that is easier to enforce and harder to game, at least in the near term.

The next six months will set the tone. If companies successfully pivot to free-to-play engagement and keep users interested, the sector will retain its creative core even as the money model changes. If engagement collapses, consolidation will follow—studios with strong IP and diversified revenue will pick up distressed assets. Either way, the story of Indian gaming isn’t ending; it’s being rebuilt without cash stakes at the center.