The online gaming industry in India faces potential upheaval as the Karnataka High Court has requested the Union government to respond to a petition challenging the Promotion and Regulation of Online Gaming Act. This development has sparked concerns about the future of the burgeoning online gaming sector in the country.

Legal Challenge to the Online Gaming Act

The petitioners, representing the interests of the online gaming industry, have raised significant concerns about the Act's potential impact. They argue that the legislation poses a threat to the livelihood of thousands of individuals employed in the sector and could result in widespread job losses.

Economic Implications

According to the petitioners, the Act's implementation could have far-reaching consequences:

• Over two lakh employees in the online gaming industry could be affected
• Investments worth crores of rupees are at risk
• The skill-gaming industry, previously promoted by the government, faces an uncertain future

Constitutional Concerns

The challenge to the Act is not merely economic but also constitutional. Petitioners contend that the legislation infringes upon fundamental rights guaranteed by the Indian Constitution, including:

• Freedom of expression
• Right to livelihood

They further argue that the Act was enacted without proper consultation with industry stakeholders, despite the government's previous stance of promoting the skill-gaming industry.

Current Status of the Act

While the Promotion and Regulation of Online Gaming Act has received Presidential assent, it is important to note that it has not yet been notified. This means that the Act is not currently in force, providing a window for legal challenges and potential modifications.

Government's Stance

Solicitor General Tushar Mehta, representing the government's position, argued that the courts should refrain from interfering once Parliament passes a law and it receives Presidential assent. This stance highlights the tension between legislative authority and judicial review in matters of emerging industries and technologies.

Next Steps

The Karnataka High Court has adjourned the matter, directing the Union government to file its response. Additionally, the court will consider the petitioner's submissions seeking interim relief. This case is likely to be closely watched by the online gaming industry, legal experts, and policymakers alike, as its outcome could significantly shape the future of online gaming in India.

As the legal battle unfolds, the online gaming industry in India finds itself at a crossroads, balancing between regulatory compliance and the need to protect jobs and investments. The court's decision and the government's response will be crucial in determining the path forward for this rapidly evolving sector.

The Indian online gaming industry has undergone a seismic shift following the Presidential assent to the Promotion and Regulation of Online Gaming Bill, 2025. This new legislation has prompted several major real-money gaming platforms to halt their operations, reshaping the landscape of the country's digital gaming sector.

Key Impacts of the New Legislation

The recently passed bill prohibits real money-based gaming while promoting e-sports and social games. It also bars financial institutions from facilitating transactions for online money games, effectively cutting off the lifeline for many platforms that relied on such transactions.

Major Platforms Affected

Several prominent gaming companies have been forced to alter their operations or shut down entirely:

1. Dream11: The popular fantasy sports platform has discontinued its cash contests but assured users that their funds remain safe for withdrawal.

2. Rummy Culture and Probo: Both platforms, owned by Gameskraft Technologies, have wound down operations. The parent company has paused add cash and gameplay services.

3. Zupee: The platform has shut down all paid games.

4. Mobile Premier League (MPL): MPL has ended its real money game operations.

5. Rush: This crypto gaming platform has closed down completely. Its parent company, Hike, has announced plans to relocate operations to the United States.

Nazara Technologies' Strategic Move

Amidst this industry-wide upheaval, Nazara Technologies has made a significant move. The company announced the closure of Pokerbaazi's real money features after acquiring a 48% stake in Moonshine Technologies for Rs 982.00 crore.

Additionally, according to the latest LODR data, Nazara Technologies' board has approved granting an unsecured loan of up to GBP 1,259,520 (approximately INR 15.00 crores) to its wholly-owned subsidiary, Nazara Technologies UK Limited. This move appears to be part of the company's strategy to strengthen its international presence and diversify its portfolio in light of the changing regulatory landscape in India.

Industry Reaction

The sudden implementation of the new regulations has left many in the industry reeling. Kavin Bharti Mittal, CEO of Hike, cited the lack of regulatory clarity against real money gaming and the absence of industry consultation in the bill's passage as reasons for relocating their operations.

Looking Ahead

The online gaming industry in India is at a crossroads. While the new legislation aims to promote e-sports and social games, it has effectively dismantled a significant portion of the real-money gaming sector. Companies are now forced to pivot their business models or explore opportunities in other markets.

As the dust settles, it remains to be seen how the Indian gaming landscape will evolve. The focus may shift towards developing innovative, non-monetary gaming experiences that comply with the new regulations while still engaging the vast Indian gaming audience.