India Gambling — Market entry in practice: How hard is entry, really?

## Attractions Games of skill and popular game formats such as fantasy sports, chess, Ludo and Rummy have historically attracted a large number of players in India. However, pursuant to the Online Gaming Act, online money games are prohibited, irrespective of whether they involve skill, chance, or a combination of both. Accordingly, opportunities in the Indian gaming market are now primarily concentrated in permissible online social games, casual games, e-sports and related gaming services. According to the FICCI–EY Report 2026, India's video gaming sector generated approximately INR 195 billion in revenue in 2025, compared to INR 236 billion in 2024, reflecting a decline of approximately 17% following regulatory restrictions on online money gaming. India has seen three gaming unicorns (Dream Sports, Games24x7, and MPL) and one successful IPO (Nazara Technologies). While these developments reflect the historical growth of India's gaming industry, the prohibition on online money games has resulted in a shift towards permissible gaming formats. Hence, investments and joint ventures with Indian companies engaged in casual gaming, social gaming, e-sports, game development, publishing and related gaming services may present opportunities for investors. Casual gaming continues to be a significant segment of India's gaming industry, supported by in-app purchases, advertising revenues and increasing user engagement. According to the FICCI–EY Report 2026, in-app purchases in video games increased by approximately 15% in 2025. Further, casual family games, battle royales, puzzles and other mobile gaming formats continue to attract a large number of players in India. The Online Gaming Act expressly recognises online social games, including games offered for entertainment, recreation and skill development, which may be offered free of charge or upon payment of subscription or access fees, provided such payments do not constitute stakes or wagers. Accordingly, permissible casual and social gaming formats present opportunities for further growth and investment. E-sports has emerged as an important segment of India's gaming industry, with increasing participation in organised competitive gaming events and tournaments. The Online Gaming Act expressly recognises e-sports and provides for their promotion and development, including through the establishment of training academies, research centres and other supporting infrastructure. Qualifying e-sports may also involve registration or participation fees and performance-based prize money, subject to the conditions prescribed under the Online Gaming Act. The statutory recognition of e-sports may encourage further investment in gaming infrastructure, professional gaming, tournament organisation and related services. India has a large and digitally engaged gaming audience. According to a recent report, the video game market in India recorded a robust year-on-year growth of 18.4%, reaching a total revenue of USD 907.3 million in 2024. This growth was accompanied by a significant expansion in the gaming population, with 475.2 million gamers reported in 2024. Future market-size and user-growth projections should be evaluated in light of the prohibition on online money games. In addition to being the most populous country, India has one of the largest youth populations in the world. This could lead to an increase in the number of players in India, including those who may consider gaming and e-sports as a career option. Ease of access to smartphones and the internet: India has the highest consumption of mobile data per smartphone user on a global level. This makes India a large market of people with easy smartphone and internet access to play online games. According to Sensor Tower's India Mobile Game Insights 2025, India recorded approximately 8.45 billion mobile game downloads in FY 2024–25, making it the world's largest mobile gaming market by downloads. Mobile-based gaming continues to account for a substantial proportion of gaming activity in India, presenting significant opportunities for gaming operators and developers seeking access to a large user base. ## Challenges While games of skill involving monetary stakes were historically permitted in several Indian States, the Online Gaming Act, which came into force on May 01, 2026, prohibits online money games irrespective of whether they involve skill, chance or a combination of both. The prohibition extends to the offering and facilitation of online money gaming services, advertisements promoting such games and financial transactions facilitating these services. Consequently, RMG operators, including operators of fantasy sports, Rummy and other games of skill involving monetary stakes, can no longer offer such games in India. This has significantly restricted market access for operators and investors in the RMG segment. The Indian gaming industry has witnessed significant changes in its taxation framework. With effect from October 1, 2023, GST at 28% was levied on the full-face value of amounts paid or deposited in relation to online money gaming. Subsequently, the GST rate applicable to specified actionable claims, including online money gaming, increased to 40% with effect from September 22, 2025. Further, GST authorities had issued substantial retrospective tax demands against gaming operators in relation to earlier periods. In May 2026, the Supreme Court upheld the constitutional validity of the GST framework applicable to online gaming, including the retrospective operation of the 2023 amendments. These developments may have implications for historical liabilities, valuations and investments in gaming businesses, particularly those previously engaged in RMG.