Bengaluru: The Karnataka High Court will hear on 30th August 2025 a petition filed by leading online gaming company A23, challenging the newly enacted Promotion and Regulation of Online Gaming Act, 2025, which imposes a blanket ban on all forms of online money gaming across India.

The plea was mentioned for urgent hearing before the court on Wednesday by Senior Advocates C Aryama Sundaram and Dhyan Chinnappa, who argued that the legislation has far-reaching consequences for the gaming industry, employment, and investment in the sector.

Law discards ‘skill versus chance’ distinction

The new law, which received President Droupadi Murmu’s assent on 22nd August, makes no distinction between “games of skill” and “games of chance” — a legal classification that had previously allowed platforms offering skill-based games to operate in India.

Under the Act, any game involving monetary stakes is prohibited, effectively banning online card games, rummy, poker, and fantasy sports in their current format.

Stringent penalties and enforcement provisions

The Act imposes severe criminal penalties, with offences being classified as cognisable and non-bailable.

  • Operators running banned games or processing financial transactions related to them can face up to three years in prison and fines up to ₹1 crore.

  • Repeat offenders may be subject to harsher punishment, including mandatory minimum sentences and fines up to ₹2 crore.

    • Additionally, banks, payment gateways and intermediaries have been barred from authorising or processing any transactions linked to prohibited games.

    Government cites social and security concerns

    Defending the law, the government highlighted increasing cases of financial distress, indebtedness, and psychological harm caused by money gaming, particularly among youth and vulnerable groups.

    It further claimed that certain platforms were being misused for money laundering, tax evasion and even terrorism financing, warranting a complete ban rather than regulation.

    The Act also provides for the establishment of a national regulatory authority to register and classify permissible games and oversee compliance.

    Exemptions for e-sports and non-monetary games

    While banning money games, the legislation allows for the promotion of competitive e-sports governed by sporting rules and educational/social games without monetary stakes, recognising their growing role in entertainment and skill development.

    Industry impact and legal challenge

    Gaming companies argue that the law could wipe out an industry worth thousands of crores, directly impacting employment and foreign investment. They contend that previous court rulings had upheld skill-based gaming as a legitimate business activity and that the new legislation overrides established legal principles.

    The outcome of A23’s petition will be closely watched by industry stakeholders, as it could set a precedent for future regulation or potential reversal of the ban.