Context:

• The Indian Parliament recently passed the Promotion and Regulation of Online Gaming Act, 2025, after minimal debate.
• The Act bans online real-money games like rummy and poker while claiming to promote innovation and protect against socio-economic, public health, and privacy concerns.
• The law raises constitutional, legal, and policy questions about the Union Government’s competence and proportionality of restrictions on individual liberty.

Key Features of the Act:

• About the law: It ostensibly aims to promote online gaming and protect individuals with respect to social, economic and privacy-related concerns.
• Objective: To secure a safe, innovation-friendly digital environment while addressing the public health, public morality and financial sovereignty risks of online gaming.
• Provisions: To completely ban all online games involving real money, such as rummy and poker. Thus, the law retains “promotion” rhetoric but adopts a prohibitive approach.

Union vs State Powers:

• Constitutional allocation: Following subjects primarily lies in the State domain as per Schedule VII List II (State List) of the Indian constitution -
  • Sports, entertainments, amusements
  • Betting and gambling
  • Public health, trade and commerce
• Issue:
  • By regulating online gaming, the union government assumes legislative competence by citing public interest.
  • This raises federalism concerns since the subject lies in the State domain.

Government’s Rationale:

• Addiction and mental health: Due to the temptation of these "predatory gaming platforms," Indian youth are rapidly spiralling into financial instability and mental health crises (WHO).
• Cybersecurity and financial risks:
  • Unlike offline games, software coding in online games can manipulate odds against players.
  • Online games are vulnerable to fraud, money laundering, identity concealment.
• Moral and social grounds: Online money gaming are seen as predatory platforms exploiting youth.

Critical Issues and Debates:

• Liberty and proportionality:
  • Ban restricts adult autonomy in a free country.
  • Constitutional law demands that restrictions be rational, necessary, suitable, proportionate.
  • Current ban risks being seen as excessive and paternalistic.
• Rational nexus question:
  • Does banning online real-money games actually prevent mental/financial crises?
  • Risk of underground, unregulated markets that are accessible through VPNs and dark web.
• Policy alternatives: Instead of outright ban, possible regulatory measures are -
  • Licensing of gaming companies.
  • Strict fiscal controls and limits on the stakes players choose to play for.
  • Age restrictions and player verification.
  • Taxation and monitoring for accountability.
• Socio-economic considerations:
  • Need for mental health support systems.
  • Employment creation as an alternative to risky online earnings.

Unanswered Questions:

• Why differentiate between online and offline real-money games?
• Is prohibition more effective than strict regulation?
• Does Union intervention violate the federal spirit of the Constitution?
• How will enforcement tackle cross-border digital platforms?

Conclusion:

• The future of online gaming regulation in India must move beyond prohibition towards a balanced framework of accountability, innovation, and player protection, ensuring that risks are addressed without undermining federalism or individual liberty.
• A nuanced regulatory approach with licensing, safeguards, and mental health interventions can transform the sector into a source of responsible entertainment, economic growth, and digital innovation.