A proposed, short-sighted regulation threatens to erase a decade of innovation and investment in India’s booming digital gaming sector, argues Tariq Khan, a cofounder of Games24x7.
By Tariq Khan
The Indian government’s decision to outlaw online money games is nothing short of devastating for the real-money gaming (RMG) industry. Yesterday’s announcement, confirmed today in the Lok Sabha, has left both operators and investors stunned.
I write this as someone with skin in the game. In 2006, I co-founded Games24x7 with two fellow PhD students from New York University. What started as a fledgling venture grew into a unicorn and a pioneer in India’s online entertainment space, drawing millions of users and helping redefine the country’s digital gaming landscape.
We were among the earliest and most significant players in the sector. That’s why I can say, with absolute certainty, this move amounts to nothing short of an industry wipeout in the domestic market.
For months, the industry’s attention was consumed by taxation battles. The Supreme Court has been weighing whether to increase taxes on player deposits and gross gaming revenue, from the current 18% to 28% or even 40%. Most operators expected harsher taxes, but no one foresaw an outright ban. We were braced for pain, not annihilation.
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Instead, the government has blindsided everyone with the Promotion and Regulation of Online Gaming Bill, 2025. Reuters reports the bill prohibits any person from offering or facilitating online money games, citing risks of psychological and financial harm to players.
The rationale is carefully framed: excessive ad spending, addictive behavior in a visible minority, and the perception of high profits in a socially corrosive sector. States that had previously attempted piecemeal bans, which were struck down by the Supreme Court, now find their positions reinforced by national legislation.
To describe the proposed ban simply as a response to social concerns is incomplete. This is a political act as much as an economic one.
The government has calculated that the damage to foreign direct investment (FDI) can be absorbed in exchange for political gains. Billions of dollars have flowed into India’s gaming sector over the past decade, making it one of the hottest emerging markets for global investors.
A sudden reversal of policy will tarnish India’s reputation as a stable investment destination. Yet policymakers know global capital is fickle, often driven more by herd sentiment than patient analysis. They appear convinced the loss will be temporary and manageable.
Through a global lens, the move also signals something else: confidence. India is showing it can act decisively—even at the cost of investor trust—to assert sovereignty and protect what it defines as the national interest. It is, in its own way, a show of strength.
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Is this truly shortsightedness disguised as strategy, or a calculated move on a multidimensional chessboard?
Domestically, the politics are equally clear. Several state governments have long been uneasy about the rise of real-money games, citing moral and social harm. The proposed national ban converts that unease into political capital, scoring points with a public that has grown skeptical of gaming ads and billion-dollar valuations. For the government, the kudos gained may well outweigh the economic losses.
For those of us who spent nearly two decades building platforms, ecosystems, and communities of players, this is heartbreaking. Millions of Indians who play responsibly — and millions more whose livelihoods depend on this industry — are now collateral damage in a larger political calculation.
And so, the question lingers: While claiming to protect its citizens from harm, has India ended up metaphorically chopping off its own leg?
(The writer, a New York-based angel investor, was the first investor in the Indian unicorn Games24x7, launched in 2006.)