Online Gaming Bill cleared in Lok Sabha: What does that mean for Esports? 5 key takeaways

The Lok Sabha passed the Online Gaming Bill on Wednesday that bans money-based games while promoting Esports and social gaming. The bill, supported by many MPs but criticised by Congress MP Shashi Tharoor, aims to address growing concerns about gaming addiction, money laundering, and financial fraud in online platforms.“The government believes that the harms of addiction, financial loss and even extreme consequences such as suicides associated with online money gaming can be prevented by prevention of such activities,” said a media statement by the government.“Additionally, online money gaming platforms are often misused for financial fraud, money laundering, terror financing and messaging activity that compromise national security,” it added.India's online gaming industry stands at $3.8 billion, which has drawn global investors and created fantasy sports apps like Dream11, Games24X7 and Mobile Premier League.Union Minister Ashwini Vaishnaw explained that the bill focuses on three main segments. It supports e-sports competitions and social games that don't involve money. However, it strictly prohibits online money games due to their harmful effects on society, including addiction and suicide cases."When it comes to the interest of the middle class of the society, and if that interest is compared to an industry segment, the interest of the society, the interest of the middle class families, the interest of the youth is greater," Vaishnaw told reporters at Parliament.Shashi Tharoor warned that banning these games might push them underground. "I had written a long article in 2019 stating that by banning online gaming, we are simply driving it underground, whereas it could actually serve as a useful source of revenue for the government if legalised, regulated, and taxed," he said.Several BJP MPs welcomed the bill. Ravi Kishan praised Prime Minister Modi, noting that people were selling their land to play these games. Bansuri Swaraj called it a milestone in curbing addictive online gaming.BJP MP Sanjay Jaiswal accused the Trinamool Congress of protesting the bill stating they allegedly received donations from gaming companies.EPWA raises concern, writes to PM ModiHowever, the Esports Players Welfare Association (EPWA) has raised concerns. In a letter to Prime Minister Modi, they argued that the blanket ban doesn't distinguish between skill-based and chance-based games. They warned this could affect the livelihoods of thousands of professional gamers, coaches, and content creators.The EPWA highlighted that India's 450 million online gamers could turn to unregulated offshore platforms if legitimate options are banned. They support regulation but oppose a complete ban, suggesting instead a framework that protects players while allowing skill-based gaming to thrive.1. Under the Online Gaming Bill, esports will be officially recognised as a legitimate form of competitive sport in India. The Union Ministry of Sports will develop guidelines and standards for the conduct of esports events in the country, as well as establish training academies, research centers, and technology platforms. The bill also envisions incentive schemes, awareness programs, and the integration of esports into the broader sports policy.2. The Online Gaming Bill enables the government to “recognise, categorise, and register” online social games. This will be achieved by creating platforms for the development and distribution of safe, age-appropriate social and educational games, with a special emphasis on cultural and educational games that align with Indian values.3. The Online Gaming Bill calls for a comprehensive ban on offering, operating, or facilitating online money-based games, regardless of whether they rely on skill, chance, or both. Advertising of these games would be prohibited across all media. Banks and payment systems would be barred from processing payments related to such games.4. Online money games that are already active in the country would be blocked under the Information Technology Act, 2000. The bill proposes the establishment of a national online gaming authority to oversee these matters. Its functions would include:- Categorisation and registration of online games- Determination of whether a game qualifies as a money game- Handling complaints and grievances related to online gamesThis body would also issue guidelines, orders, and codes of practice to ensure compliance with the country’s laws.5. Penalties outlined in the bill include:- Imprisonment of up to three years and/or a fine of up to ₹1 crore for entities involved in or facilitating online money gaming- Advertising such games would incur a penalty of ₹50 lakh or up to two years of imprisonment- Any financial transaction related to money games could result in imprisonment of up to three years and/or a fine of up to ₹1 crore- Repeat offences would attract harsher penalties, including imprisonment of 3–5 years and fines up to ₹2 crore.