As of 1 May 2026, the Federal Government of India has enacted the Promotion and Regulation of Online Gaming Act (PROGA 2025).
The enactment of PROGA ends a near ten-month regulatory standstill for India’s gaming sector and its diverse set of stakeholders, who must now comply with a federal ban on all online platforms, services and apps that provide access to Real Money Games (RMGs).
The mandate was originally authorised on 22 August 2025 by both houses – the Lok Sabha and Rajya Sabha – which determined that real money gaming transactions would be made illegal under India’s legislative framework.
The decision triggered an abrupt adjustment across the country’s gaming and technology sectors, the impact of which is yet to fully settle.
Indian games expert, Sameer Nandwani, Managing Director of WiseWays, “returns to the scene of a crime”.
His framing of conditions is accurate as “nobody could have prepared for what came in overnight”. He told iGaming Expert: “In one decision, we were basically told that Real Money Games which for the first time included skill games too, would be prohibited.
“So overnight, online fantasy sports, poker and rummy were effectively stopped from operating.”
A surprise for everyone that was operating prior to PROGA, the government had opted for a collaborative approach which requires gaming studios and app developers to submit feedback on the governance of a burgeoning sector and its development of a regulatory agency.
Nandwani has viewed the 22 August mandate as being similar to US gambling Black Friday 2006, which led to a federal ban on online gambling transactions.
He added: “In effect, I feel that they’ve taken a similar step to what the US government did in 2006. I think they wanted to reorder the house, reset it, perhaps they view that they can take the same path to regulate the gaming sector, but that destination is unlikely.”
Yet now that PROGA has been enforced, its biggest test may not be compliance but whether its laws and framework carry coherence. Despite its in intent, PROGA will likely create immediate legal tension within India’s constitutional structure, as detailed by Naqeeb Ahmed Kazia, Partner at CMS Indus Law
“The government has effectively placed the gaming sector in a state of legal limbo. While the Act has been passed and assented to, enforcement still hinges on the notification of rules and procedural clarity.
“Gambling and betting remain subjects under the State List. What we are now seeing is a central law attempting to regulate or prohibit an activity that constitutionally sits with the states. That tension will inevitably lead to interpretational challenges.”
Principal Issue unanswered
Beyond legal uncertainty, the economic consequences have been immediate. Nandwani did not shy away from the impact: “Its prima facie, this is a self-harming bill. The speed and breadth of the prohibition have already resulted in job losses, restructuring and a sharp contraction of what was one of India’s fastest-growing digital sectors.”
The withdrawal of payment services and banking support has further accelerated the shutdown of compliant operators, effectively forcing the market offline before any replacement framework has been introduced.
Rather than resolving India’s long-standing debate on gaming, PROGA risks deepening fragmentation that will mix Indian gaming with the interpretation of gambling laws.
Rahul Renavikar, Managing Director of Acuris Advisors, stressed that the core issue remains unresolved: “We still have not answered the fundamental question – what is online gambling in India? Without that clarity, any blanket prohibition is only going to create further grey areas.”
Renavikar pointed to the complexity of balancing policy objectives: “There has to be a solution that works for both the government and the industry. At the moment, we are seeing activity shift rather than disappear, which suggests the framework is not aligned with how the market actually operates.”
Operators are already pivoting towards subscription models, fan engagement ecosystems and non-cash reward structures, reinforcing the view that prohibition is creating alternative channels for India’s consumers who will not be denied an RMG market.
Black market & GST clash
Following Indian developments closely, for Jack Wheeler, Head of APAC at Optimove, the outcome of prohibition is predictable.
“Whenever you see blanket bans across Asia on real money gaming, you see an immediate surge in black market and offshore activity. Players don’t stop – they simply move.”
Wheeler warned that India’s scale makes this risk even more pronounced: “India is simply too large a market to abandon. What happens instead is a shift towards unregulated environments – crypto platforms, VPN access – where there are no safeguards, no KYC and no tax contribution.”
PROGA’s enforcement also clashes directly with India’s tax framework. Renavikar criticised the current GST model as commercially unviable: “The way the law has been interpreted, tax is applied on the bet value rather than gross gaming revenue. And on top of that, the rate has increased significantly.
“If the economics don’t work, there is no incentive for either operators or players to participate in the legal ecosystem. That is a fundamental flaw.”
This creates a clear contradiction: a sector deemed harmful enough to prohibit is still subject to aggressive taxation on its remaining forms.
Regulators Paradox
Central to PROGA’s next phase is the development of a regulatory authority. Nandwani emphasised the need for structured governance: “Having an independent regulatory authority with representation from all stakeholders is imperative. Regulation not prohibition is what will ultimately stabilise the market.”
Kazia suggested that such a body could emerge, but its purpose remains uncertain: “We may well see the establishment of a central regulator. The question is whether it will purely enforce the ban, or evolve into a framework that allows certain forms of gaming to operate under strict conditions.”
Despite the severity of the reset, panellists pointed to potential shifts ahead. Kazia offered cautious optimism: “I don’t expect the prohibition to disappear entirely, but there is a strong possibility that a more structured framework emerges – one that allows certain regulated activities to continue.”
Another decade of ambiguity?
PROGA was designed to bring clarity to India’s online gaming sector. Instead, it may have reset the debate entirely.
Without a clear definition of online gambling, without alignment between central and state powers, and without a viable taxation model, India risks entering another prolonged period of uncertainty.
Absent reform, India may once again find itself interpreting a modern digital industry through a legal framework rooted in a very different era, extending a cycle of ambiguity that PROGA was meant to end.
For now, the country has chosen prohibition. But as Wheeler bluntly ascribes: “You can regulate demand… but you can never eliminate it.”
