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The recent passage of the Promotion and Regulation of Online Gaming Bill, 2025 in the Rajya Sabha, prohibiting online money games (RMGs) where users deposit money with the expectation of winnings, is likely to face significant challenges under constitutional scrutiny. The stated objective of the bill – to shield people from harms like addiction, financial loss, and fraud – appears laudable on the surface. However, the authors of this article argue that the proposed law is fundamentally flawed due to its arbitrariness, disproportionality, and failure to differentiate between different types of online gaming operators. The authors posit that the ban represents a sudden and unjustified reversal of the government’s previously consistent stance of fostering the growth of the online gaming industry, creating an environment of uncertainty and undermining investor confidence. This shift in policy, without the presentation of new compelling evidence or reasoning, raises serious concerns about the rationale behind the ban and its potential impact on the digital economy. Furthermore, the bill's disproportionate nature, relying on the most restrictive measure – prohibition – when less intrusive alternatives such as regulation and oversight are readily available, is a significant point of contention. The blanket ban fails to address the nuances of the online gaming landscape and overlooks the critical distinctions between offshore betting operators and homegrown gaming firms, who operate under vastly different regulatory environments and compliance standards. This equal treatment of unequals not only undermines the efforts of domestic operators who have voluntarily adopted industry best practices but also risks driving users towards unregulated offshore platforms, thereby exacerbating the very harms the law seeks to prevent. The article asserts that this legislative overreach encroaches on citizens' autonomy and right to choose their leisure activities, potentially violating fundamental constitutional rights. The authors contend that the ban is driven by morality-based disapproval rather than a careful and objective analysis of alternative enforcement mechanisms, making it vulnerable to legal challenges. The Indian online gaming industry has experienced substantial growth in recent years, contributing significantly to the nation’s digital economy. The government, until recently, has consistently recognized this contribution, signaling its intention to regulate, rather than prohibit, RMGs. This regulatory approach, evidenced by amendments to the Information Technology (IT) Rules in 2023 and consultations with industry stakeholders on the Prevention of Money Laundering Act and the Digital Personal Data Protection Act, created a sense of stability and encouraged investment in the sector. The introduction of Goods and Services Tax (GST) reforms further solidified the government's commitment to regulating and taxing the RMG market, providing a clear incentive for companies to build for the long term. This policy environment fostered a thriving ecosystem, with the online gaming industry employing over 100,000 people in 2023, a number projected to double by the end of 2025. Between 2020 and 2024, a significant INR 23,000 crore was invested in online gaming, as companies proactively implemented know-your-customer (KYC) checks, anti-money laundering (AML) protocols, and grievance redressal mechanisms, believing they were building in alignment with the government’s stated policy objectives. The sudden shift to a prohibitionist approach, without any new compelling justifications, casts a shadow of doubt over the government’s commitment to fostering a stable and predictable regulatory environment for the online gaming industry. The authors highlight that the risks associated with online gaming, such as addiction, fraud, and money laundering, were already well-known in 2023 when the IT Rules were amended to regulate money gaming with the explicit objective of expanding gaming innovation. Therefore, the absence of any new evidence to justify the reversal in policy further weakens the rationale behind the ban. The differential treatment of offshore betting services and domestic RMG operators is another key point of contention. Offshore platforms, due to the cross-border nature of their transactions, pose a heightened risk of money laundering and offer no consumer protection, operating outside the purview of Indian law and leaving users without recourse in case of disputes or fraudulent activities. Domestic operators, on the other hand, have been actively seeking legitimacy and have voluntarily adopted industry codes on platform fairness and anti-money laundering measures. By treating both types of operators equally, the law not only ignores these crucial distinctions but also inadvertently incentivizes users to migrate to unregulated offshore platforms, thereby increasing their exposure to the very risks the law aims to mitigate. The authors emphasize the importance of proportionality in state action, citing established Indian jurisprudence that requires government measures to be the least intrusive means of achieving stated objectives. An outright prohibition, they argue, represents the most intrusive step imaginable. Global regulators have increasingly adopted alternative approaches, such as self-exclusion tools, voluntary time and money limits, and parental controls, which are less restrictive and more targeted in addressing the potential harms associated with online gaming. The Indian industry-led standards were already aligning with these global trends, focusing on anti-money laundering compliance and certifications to ensure game fairness and randomization. The constitutional principle of proportionality also mandates a direct linkage between government action and the stated objective. The authors cite evidence suggesting that bans do not eliminate addictive behaviors but merely displace them into unregulated markets, where the risks are often higher. The example of coercive action to limit gaming in the United States demonstrates the potential for tax losses and the migration of users to offshore platforms, where the risk of money laundering is exacerbated due to the cross-border nature of transactions. Drawing upon the landmark Justice K S Puttaswamy vs Union of India case, the authors emphasize the Supreme Court’s affirmation of the right to privacy as a fundamental right, encompassing an individual’s liberty, dignity, and autonomy. This autonomy includes the right to determine how one exercises freedoms guaranteed by the Constitution, including the right to choose preferences in various facets of life, such as recreation. Interventions with an individual’s right to autonomy and self-determination in a matter as basic as recreation are seen as potentially violating the rights conferred on citizens by Articles 19 and 21 of the Constitution. By denying people the right to choose the kind of recreational activity they want to indulge in, the state may be seen as interfering with their autonomy as reaffirmed under Puttaswamy. Moreover, the authors argue that fundamental rights cannot be curtailed based on shifting standards of public morality. The blanket ban on RMGs appears to be driven primarily by morality-based disapproval rather than a careful analysis of alternative enforcement tools. If challenged, the ban risks being struck down for violating constitutional guarantees. The authors conclude that the Promotion and Regulation of Online Gaming Bill, 2025, faces significant legal challenges due to its arbitrariness, disproportionality, and potential violation of fundamental rights. They urge policymakers to reconsider the prohibitionist approach and explore alternative regulatory mechanisms that address the potential harms associated with online gaming while preserving individual autonomy and fostering innovation in the digital economy. The key arguments center around the government's prior pro-gaming stance, lack of new evidence, failure to differentiate between operators, disproportionality of the ban, and infringement on individual liberties. The law's future in the courts is therefore uncertain.
Paragraph 2 of the essay: A deeper dive into the arbitrariness claim requires examining the government’s prior actions and pronouncements. For years, the government has actively promoted the growth of the digital economy, recognizing the significant contribution of the online gaming sector. In parliamentary responses to questions regarding RMGs, the consistent message has been one of regulation, not prohibition. This commitment to regulation was further demonstrated through the amendments to the IT Rules in 2023, which established a regulatory framework specifically designed for money gaming. The government actively engaged with industry stakeholders through consultations on crucial legislation like the Prevention of Money Laundering Act and the Digital Personal Data Protection Act, seeking to enhance transparency and build robust safeguards. These actions signaled a clear intent to create a stable and predictable regulatory environment, encouraging companies to invest and innovate within the online gaming space. The sudden shift to a prohibitionist stance, without any substantive new evidence to justify the reversal, creates a sense of uncertainty and undermines investor confidence. It raises questions about the credibility and consistency of government policy, potentially discouraging future investment in the digital economy. The argument that the ban is disproportionate rests on the principle that state action should be the least intrusive means of achieving its stated objectives. The authors contend that a blanket prohibition is the most extreme measure, effectively shutting down the entire RMG industry and depriving millions of users of their chosen form of recreation. Less restrictive alternatives, such as stricter regulation, enhanced consumer protection measures, and the implementation of self-exclusion tools and voluntary limits, could potentially achieve the same objectives without resorting to a complete ban. The experience of other countries that have adopted regulatory approaches to online gaming provides further support for the argument that prohibition is not the most effective solution. These countries have demonstrated that it is possible to balance the benefits of online gaming with the need to protect consumers from potential harms. The failure to differentiate between offshore betting operators and domestic RMG firms is another critical flaw in the proposed law. Offshore platforms operate outside the jurisdiction of Indian law, making it difficult to regulate their activities and protect consumers from fraud and other abuses. Domestic operators, on the other hand, are subject to Indian laws and regulations and have a greater incentive to comply with industry best practices. By treating both types of operators equally, the law creates an uneven playing field and undermines the efforts of domestic firms to build a responsible and sustainable online gaming industry. Moreover, the ban may inadvertently drive users towards unregulated offshore platforms, where they are at greater risk of being exploited. The impact on individual autonomy is a fundamental concern raised by the authors. The right to choose one’s recreational activities is an essential aspect of personal liberty and autonomy. The state should not interfere with this right unless there is a compelling justification, such as the need to protect public health or safety. The authors argue that the ban on RMGs is an unjustified intrusion on individual autonomy, driven by moral disapproval rather than a genuine concern for public welfare. The Supreme Court’s affirmation of the right to privacy in the Puttaswamy case provides further support for this argument. The Court recognized that privacy encompasses the right to make choices about one’s personal life, including one’s recreational activities. The ban on RMGs may be seen as an infringement on this right, as it effectively prohibits individuals from engaging in a form of recreation that they find enjoyable and harmless.
Paragraph 3 of the essay: Further elaborating on the proportionality argument, the authors draw on international examples and existing Indian legal principles. The legal test of proportionality, deeply embedded in Indian jurisprudence, demands that any restriction imposed on fundamental rights must be carefully balanced against the objective sought to be achieved. This means that the government must demonstrate that the restriction is necessary to achieve a legitimate aim, that it is rationally connected to that aim, and that it is the least restrictive means of achieving that aim. In the case of the online gaming ban, the authors argue that the government fails to meet these requirements. While the objective of protecting individuals from addiction, financial loss, and fraud is undoubtedly legitimate, the authors question whether a complete ban is the least restrictive means of achieving that objective. They point to the availability of alternative regulatory measures, such as age verification, limits on deposits and wagers, self-exclusion programs, and responsible gaming advertising campaigns, which could potentially achieve the same objectives without resorting to a complete prohibition. The authors also highlight the potential unintended consequences of the ban, such as the growth of unregulated black markets and the displacement of users to offshore platforms, where the risks of fraud and money laundering are even greater. These unintended consequences undermine the very objectives that the ban is intended to achieve, further weakening the proportionality argument. The authors’ reliance on the Puttaswamy judgment is also crucial to their argument. This landmark Supreme Court decision established the right to privacy as a fundamental right under Article 21 of the Indian Constitution. The Court held that privacy encompasses the right to make autonomous decisions about one’s personal life, including one’s recreational activities. The authors argue that the online gaming ban infringes on this right to autonomy, as it effectively prohibits individuals from engaging in a form of recreation that they find enjoyable and harmless. They contend that the state should not interfere with individual choices about recreation unless there is a compelling public interest justification, such as the need to protect public health or safety. In the case of the online gaming ban, the authors argue that the government has not provided sufficient evidence to demonstrate such a compelling public interest justification. The government has not shown that online gaming poses a significant threat to public health or safety, nor has it demonstrated that the ban is necessary to prevent addiction or financial loss. The authors also challenge the government’s reliance on public morality as a justification for the ban. They argue that fundamental rights cannot be curtailed based on shifting standards of public morality. The ban appears to be motivated by moral disapproval of online gaming rather than by a genuine concern for public welfare. This reliance on public morality undermines the legitimacy of the ban and makes it vulnerable to legal challenge. Furthermore, the authors highlight the economic consequences of the ban. The online gaming industry has been a significant driver of economic growth in India, creating jobs and generating revenue. The ban threatens to stifle this growth and harm the Indian economy. The authors argue that the government should carefully consider the economic costs of the ban before implementing it. In conclusion, the authors present a compelling case that the online gaming ban is unconstitutional and unsustainable. They argue that the ban is arbitrary, disproportionate, and infringes on fundamental rights. They urge the government to reconsider its approach and to explore alternative regulatory measures that would protect consumers without stifling innovation and economic growth. The authors’ arguments are well-reasoned and supported by legal precedent, economic data, and international examples. Their article provides a valuable contribution to the debate about the future of online gaming in India.
Source: Why online gaming ban may not pass judicial scrutiny