Online gaming companies seek a clear regulatory playfield

MUMBAI: India’s online gaming industry is preparing to approach the ministry of electronics and information technology (MeitY) to seek clarity on the implementation of the Promotion and Regulation of Online Gaming Rules, 2026, amid fears over compliance obligations and regulatory ambiguity, industry executives said.

Industry executives, requesting anonymity, said they need more operational guidance on classification norms, compliance thresholds, and approval processes for new gaming formats. Stakeholders added that the absence of phased implementation of the rules could create uncertainty for companies required to immediately implement user safety and compliance measures.

The Rules, notified on April 22 and effective from May 1, operationalise the Promotion and Regulation of Online Gaming Act, 2025, creating a centralised framework for the classification, registration, and oversight of online games under the Online Gaming Authority of India (OGAI), an office attached to the MeitY.


The PROG Rules, 2026, distinguish prohibited online money games from permissible online social games and e-sports, while mandating user safety, payments, data handling, and compliance requirements. The framework also formalises the recognition of e-sports and other non-monetary gaming formats through a lighter-touch registration and oversight regime.

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Executives said companies were also seeking clarity on whether certain hybrid formats involving entry fees, virtual rewards, or tournament-based progression mechanisms could fall within the definition of online money games.

Stakeholders are additionally seeking guidance on compliance timelines for user verification, grievance redressal systems, data localisation requirements, and mandatory disclosures for gaming platforms.

Some stakeholders also said the absence of a mechanism allowing companies to seek prior regulatory guidance before launching new gaming formats could create legal uncertainty and potential enforcement risks, particularly for platforms experimenting with skill-based competitive formats, fantasy mechanics, or reward-linked gameplay models.

Legal experts said provisions governing the classification of online money games remain broadly worded and may require interpretative guidance from the Authority as implementation progresses.

Ranjana Adhikari, Partner at Shardul Amarchand Mangaldas & Co., said the industry was seeking greater predictability under the new regime. She added that while the Act and Rules establish OGAI as a unified regulator, further guidance may be required on permissible monetisation models for lawful gaming categories.

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Independent legal counsel Gowree Gokhale said the Rules are only an initial framework, and greater certainty will emerge through future directions and guidelines issued by the Authority. She added that payment intermediaries, advertising platforms, app stores, and financial institutions would still need to independently assess whether games are permissible under the legal framework.

“Once the Authority becomes functional, it will be important for it to issue broad-based guidance to these support service providers to ensure consistency in implementation and enforcement. Given that the stated intent of the legislation is promotion and regulation, what the industry presently requires most is regulatory clarity and certainty. As far as e-sports is concerned, given the restrictive regulatory framework within which it is expected to operate, I have apprehensions about its growth prospects in the near future,” she noted.

Industry concerns have also been shaped by the August 2025 ban on online money games, which forced several real-money gaming operators to suspend cash-based offerings or alter their business models.

According to a report by Lumikai, India’s gaming market is projected to grow from $1.5 billion to $3.2 billion by 2030, driven by in-app purchases and advertising. The report added that the number of gamers declined to 555 million in 2025 from 609 million in 2024 following the ban on online money games.

Legal experts also raised concerns around the Online Gaming Authority of India’s capacity to assess complex gaming business models while determining whether titles qualify as online money games. They also pointed to the absence of phased implementation, with the framework taking effect on May 1, just 10 days after notification.

“The Authority is expected to make highly technical determinations on whether a game constitutes an online money game based on its revenue model, reward structures, and in-game asset monetisation. These are questions that require deep technical and commercial understanding of the gaming ecosystem,” said Adhikari.

On the lack of a phased rollout, she said, “A significant shortcoming of the Rules is the absence of any phased or graduated implementation approach. The entire framework came into force on May 1, 2026, barely 10 days after its notification on April 22, 2026, giving operators virtually no runway for compliance.”