Centre moves bill to ban betting apps, increase GST on money-based online games

August 20, 2025 by News Desk

The Union Cabinet, led by Prime Minister Narendra Modi, on Tuesday approved the much-anticipated Online Gaming Bill 2025, aimed at tightening regulation around betting applications and money-based online games. The Bill is expected to be tabled in the Lok Sabha today, even as the Centre considers imposing a 40% Goods and Services Tax (GST) on the sector by Diwali.

The move comes against the backdrop of rising cases of fraud and financial scams linked to online betting platforms. Investigative agencies have also tightened scrutiny on celebrities and influencers endorsing such applications, further accelerating the government’s push for regulation.

According to reports, the Bill proposes stringent penalties and punishments for promoting or facilitating online betting. It could also empower authorities to block financial transactions routed through banks or digital payment gateways, making it harder for illegal betting platforms to operate. The Ministry of Electronics and Information Technology (MeitY) is expected to be appointed as the central regulator, building on its earlier interventions to ban several gambling-linked apps.

The legislation could also expand the legal definition of online gaming to include any game involving real money, irrespective of whether it is based on skill or chance. If cleared, this may directly impact popular platforms such as Dream11, MPL, Pokerbaazi, RummyCircle, and Parimatch, which have grown significantly over the past decade.

Industry stakeholders, however, have expressed deep concern. Nitin Goel, Country Manager for Gameloft (India Subcontinent), welcomed the intent of curbing gambling but cautioned against overreach. “I welcome any legislation that deters the spread of online real-money gaming, which has larger social consequences,” he said.

Others were far more critical. Rameesh Kailasam of IndiaTech.org pointed out that India’s gaming industry employs over 200,000 skilled professionals, supports more than 400 start-ups, and has attracted nearly ₹25,000 crore in foreign direct investment. “The Bill appears targeted at offshore betting operators but is ending up hitting law-abiding, tax-paying Indian companies instead,” he warned.

This is not the government’s first attempt to tighten control over online gaming. In recent years, authorities have introduced a 30% income tax on net winnings and a 28% GST on gaming transactions. Under the Bhartiya Nyaya Samhita, unauthorized betting already carries a seven-year jail term and heavy fines. The new Bill seeks to consolidate these measures under a more comprehensive regulatory framework.

While the government argues that the law will protect citizens from fraud, addiction, and exploitation, critics believe it risks stifling innovation and driving legitimate businesses out of India. With the Bill expected to spark heated debate in Parliament, the future of India’s online gaming industry now hangs in the balance.