International Businesses Showing Interest in India's Real-Money Gaming Sector?
India's Online Gaming Industry Faces Regulatory Shift Amid Rapid Growth
The online gaming industry in India has witnessed a remarkable surge, growing from $290 million in 2018 to an estimated $1 billion in 2020, and projected to nearly triple to $9.1 billion by 2029 [1][5]. This expansion has been primarily driven by real-money games (RMG), which account for around 86% of the industry’s revenue, attracting significant foreign direct investment exceeding ₹25,000 crores (around $3 billion+) till mid-2022 [1][4][5].
However, the sector now faces a major regulatory shift with the Online Gaming Bill 2025, recently cleared by India’s Union Cabinet. This bill aims to ban real-money gaming nationwide, prohibiting advertisements for such platforms, and blocking financial transactions related to these games [1][2]. Violation could result in jail terms up to three years and substantial fines [1][2]. The bill is designed to curb illegal betting and gambling harms linked to such platforms, especially following fraud and public safety concerns [1][2].
In contrast, the bill officially recognizes and promotes e-sports, defining them as competitive skill-based games with formal rules, and proposes establishing a National e-Sports Authority to regulate and promote the sector [3]. This signals distinct government support for skill-based competitive gaming, while money-driven gaming platforms face strict restrictions or closure.
Industry stakeholders warn of severe negative impacts due to this bill, including potential losses of over 200,000 jobs and closure of approximately 400 companies [4]. They also raise concerns about risks to India’s position as a digital innovator and the loss of significant tax revenue contributed by the sector, chilling effects on foreign investments, and the potential shift of user activity towards illegal offshore gambling operators [4][5].
India's large and growing base of over 500 million online gamers by 2024 shows strong demand for diverse gaming formats, including fantasy sports, casual mobile games, and real-money games that provide both entertainment and earning opportunities [4][5]. The government’s separation of e-sports from real-money gaming aims to support the former’s growth while addressing public welfare concerns associated with gambling-like games [3].
Foreign online gaming companies are considering understanding local playing preferences and needs in India, and some are taking advantage of regulatory gaps to operate in India, particularly in the domains of augmented reality and virtual reality [6]. UK-based gaming companies with global reputations are also considering investing in India, particularly in the real money gaming market [7].
As the industry navigates this regulatory crossroads, local gaming companies are leveraging the popularity of cricket and Bollywood stars to attract more users. Making games available in native languages and releasing offers and promotions on special occasions like Indian festivals can help connect with Indian customers [8]. Some foreign companies are considering acquiring pre-existing tech firms for their cost-effectiveness and potential for 'glocalization' [9]. The majority of gamers in India are under the age of 25, with older age groups also starting to participate [10].
In summary, India's online gaming industry is at a pivotal point, with rapid growth opportunities tempered by regulatory changes targeting real-money gaming, while aiming to foster esports as a skill-based, promotable sector [1][2][3][4][5].
| Aspect | Details | |-------------------------------|----------------------------------------------------------------| | Industry Size & Growth | $1 billion in 2020, projected $9.1B by 2029; ~20% CAGR growth | | Revenue Drivers | 86% from real-money games | | Foreign Investment | >₹25,000 crores (~$3+ billion) till June 2022 | | New Regulation (Online Gaming Bill 2025) | Bans real-money gaming nationwide, promotes esports, sets up regulatory body | | Industry Concerns | Job losses, company shutdowns, investment chilling, tax loss, potential rise in illegal offshore gambling | | Local Preferences | Large user base favors real-money games, fantasy sports, casual games, and growing esports interest | | Regulatory Gaps | Foreign companies operating in AR/VR domains | | Foreign Investment Interest | UK-based companies investing in real money gaming market | | Language and Cultural Adaptation | Games available in native languages, offers on festivals | | Age Demographics | Majority of gamers under 25, older age groups also participating |
- The Indian government's Online Gaming Bill 2025, while aiming to curb illegal betting, proposes to ban real-money gaming and prohibit financial transactions related to these games, potentially impacting the finance sector by chilling foreign investment in that domain.
- Despite the looming regulations, the UK-based tech and gaming companies are considering investments in India, particularly in the real-money gaming market, demonstrating an interest in the investing sector.
- As the Indian government shows support for skill-based competitive gaming, such as esports, the technology sector could witness growth in the development and promotion of these games.
- In the midst of rapid growth and regulatory shifts, Indian gaming companies are utilising the popularity of sports like cricket and Bollywood stars to attract users, with a focus on language and cultural adaptability, indicating the intersection of technology, sports, and real-estate (gaming industry) in marketing strategies.
