The PROG Act 2025 — Part I: What India's New Online Gaming Law Enables

India has, for the first time, a central law governing online gaming. The Promotion and Regulation of Online Gaming Act, 2025 (PROG Act) ends decades of regulatory fragmentation — a patchwork of colonial-era central laws, inconsistent state legislation, and judicial decisions that were highly fact-specific and difficult to apply at scale. The Act extends to the entire territory of India and applies to games and platforms operated outside India but accessible to Indian users.

This is Part I of our analysis — what the Act enables. Part II covers the restrictions, bans, and penalties.

The Three-Category Framework

The Act creates a three-category framework for online games. Esports are defined as online games played as part of multi-sport events, involving organised competitive matches between individuals or teams, governed by pre-defined rules. Esports must be recognised under the National Sports Governance Act, 2025 and registered with the designated authority. Online social games are games offered solely for entertainment, recreation, or skill development — not esports, not money games. Online money games are any game involving monetary stakes or convertible rewards — and are subject to a blanket ban.

This three-category structure is conceptually clean. Real money gaming — fantasy sports, rummy, poker for stakes, binary trading options — is prohibited. Esports — competitive gaming in recognised multi-sport events — is protected. Social and educational gaming — casual games, edtech, subscription-based entertainment — has space to grow.

Esports: Recognition with Conditions

The formal recognition of esports is the Act's most positive development. Esports is a $1.65 billion global industry with over 500 million viewers. India won a bronze at the 2018 Asian Games. The Olympic Esports Games in Riyadh are set for 2027. Formal recognition enables athlete visa pathways, government support for training and participation, anti-doping framework applicability, and the legitimacy that commercial sponsors and broadcasters require.

The conditions, however, are significant. Esports must be "recognised" under the NSGA and registered with a designated authority. Registration fees and prize money are permitted. What is not permitted — and this is critical — are bets, wagers, or stakes. A spectator market for esports (gambling on outcomes) is prohibited. And esports platforms must be licensed, registered, and compliant with the governance standards the designated authority sets.

Social Gaming: A Space to Grow

Online social games — games offered solely for entertainment, recreation, or skill development — are permitted under the Act. They may charge subscription fees or one-time access fees. They may not offer prize money, winnings, or any expectation of monetary gain. This creates meaningful space for the casual gaming sector — Candy Crush-style entertainment, educational gaming platforms, fitness and wellness apps with gamified elements.

For Indian game developers, this is significant. The social gaming space is one where Indian studios can compete globally without the capital requirements of RMG platforms. Government support for Indian social and educational game developers — through grants, tax incentives, and "Make in India" frameworks — would be a meaningful complement to the Act's regulatory architecture.

The Online Gaming Authority

The Act creates an Online Gaming Authority as the central regulator with broad powers — to categorise, register, regulate, and block games. The Authority's effectiveness will depend on three things: the clarity of definitions (the boundary between esports and social gaming, between a registration fee and a stake, will be litigated), the independence and expertise of its members, and its coordination with MYAS and the Ministry of Information Technology. These are institutional design questions that the delegated legislation will need to answer.

Part II Preview

The PROG Act's restrictions — on real money gaming, advertising, financial processing for prohibited games, and the penalties for violations — are the subject of Part II of our analysis. The Act creates significant disruption for the $3.7 billion online gaming industry. Understanding what is prohibited, what penalties apply, and what the transition pathway looks like is essential for any operator or investor active in the sector.