The Indian government’s new Promotion and Regulation of Online Gaming Act, 2025, has faced its first legal challenge just days after it became law. The legislation, which bans all online games played for real money, regardless of whether they are based on skill or chance, has been challenged by a major online gaming platform – A23, reports Reuters (citing a legal filing document).
A23’s parent company, Head Digital Works, has approached the Karnataka High Court, arguing that the law unfairly targets games like rummy and poker, which are widely recognized as games of skill rather than gambling. The company has asked the court to declare the law unconstitutional when applied to these games. The Karnataka High Court has scheduled a hearing on the petition for August 30, which could be the first judicial scrutiny of this controversial law.
Notably, the Act received presidential approval on August 22 and immediately affected several online gaming platforms, including Dream11, My11Circle, WinZO, Zupee, and PokerBaazi, which have had to suspend their real-money offerings. The law covers all online games played for real money, whether they are games of skill or chance, which has caused worry in the industry.
Since the ban does not differentiate between games of chance and skill, it is creating tension for businesses that have operated legally for years. Estimates indicate that this sector could grow to be worth around $4 billion by 2030, but the new restrictions could have a major impact on that growth, leaving companies that rely on online gaming revenue uncertain about their future operations.
However, the move comes as the Indian government has repeatedly expressed concerns over real money-based online games, citing addiction and social harm as key reasons for the restrictions. At the same time, the law permits e-sports and other skill-based games that do not involve real money to continue. This means competitive tournaments for games like BGMI and FIFA Mobile will remain legal.
Meanwhile, Dream11 (one of India’s largest online gaming platforms) has reportedly decided not to challenge the new online gaming law, even though its CEO, Harsh Jain, recently indicated that the company has lost the majority of its revenues (about 95%) overnight. Similarly, another major player from the industry, MPL has reportedly decided not to pursue a legal challenge against the law and may increase its focus on free-to-play business models.
The whole scenario becomes noteworthy since breaking the new law can lead to serious consequences. People or companies running online games for real money can get up to three years in jail and pay fines of up to ₹1 crore. If someone breaks the law again, the punishment increases to three to five years in jail and fines of up to ₹2 crore. Even advertising these games is also banned, and doing so can result in up to two years in jail or fines of up to ₹50 lakh.
