India Implements Comprehensive Online Gaming Regulatory Regime Under PROG Act 2025 and 2026 Rules

The Regulation of Online Gambling Rules 2026 officially came into effect on 1 May 2026, coinciding with the enforcement of the Promotion and Regulation of Online Gaming (PROG) Act 2025, marking the introduction of India’s fully structured legal framework for oversight of the online gaming sector. The regulatory package, which follows its initial publication on 22 April 2026, establishes a central supervisory authority and introduces detailed rules intended to clearly distinguish between online money games, e-sports, and permissible social gaming formats.

The Government of India has now finalized this overarching regulatory system for the sector, arriving less than a year after the country’s 2025 prohibition on real-money online gambling under the Promotion and Regulation of Online Gaming Bill. That earlier legislation effectively banned real-money iGaming activity nationwide. It also criminalised online gambling participation and advertising, with penalties extending to fines and imprisonment of up to five years. At the time, Technology Minister Ashwini Vaishnaw described the measure as one that “avoids a big evil that is creeping into society”, while critics argued it would simply redirect users toward unregulated offshore gambling platforms. Within the first 90 days following the ban, real-money gaming operators reportedly experienced asset write-downs exceeding $840 million.

Under the new framework, India has introduced legally defined categories for online games using an objective, time-bound classification system. Games are divided into “online money games,” defined as those in which users pay entry fees or stakes with a reasonable expectation of monetary winnings and which are now prohibited, and “permissible social games or e-sports,” which are allowed under regulatory safeguards. The determination of classification and eligibility for licensing or recognition will be handled by the newly established Online Gaming Authority, which will assess factors including fee structures, staking mechanisms, expectations of financial return, revenue models, and the potential for monetisation of in-game assets outside the gaming environment.

The regulatory framework stipulates that classification decisions must be issued within 90 days of receipt of a complete application or official notice, ensuring a defined timeline for regulatory clarity. This system is intended to bring consistency to oversight at a time when India’s broader gambling environment has been subject to increasing legal and political scrutiny.

A central institutional component of the new regime is the creation of the Online Gaming Authority of India (OGAI), which will function as an attached office under the Ministry of Electronics and Information Technology (MeitY). The Authority will be headquartered in the National Capital Territory of Delhi and structured as a compact, multi-ministerial body. Its leadership will be headed by the Additional Secretary of MeitY, supported by joint secretary-level representatives drawn from multiple government departments, reflecting an inter-agency governance model.

OGAI will be responsible for maintaining an official registry of online money games identified as posing financial and social risks. It will also be empowered to conduct inquiries, issue regulatory directions, develop compliance codes, and oversee platform accountability mechanisms. In addition, the Authority will handle appeals from users dissatisfied with platform-level grievance outcomes and will coordinate with financial regulators and other enforcement agencies to ensure consistent application of rules across the ecosystem.

The framework introduces strict registration requirements for games and platforms operating within India. Only those games or categories formally notified by the central government—taking into account risk exposure to users, particularly minors, transaction scale, financial flows, and jurisdiction of origin—will be required to register under the system. Any game seeking recognition as an e-sport must also undergo registration. Once approved, providers will receive a Digital Certificate of Registration valid for up to ten years. However, games classified as online money games will not be eligible for recognition under the National Sports Governance Act 2025, reinforcing a strict separation between competitive gaming and gambling-related products.

Service providers are mandated to implement a suite of user protection measures, including age verification systems, usage time restrictions, parental control tools, in-app reporting mechanisms, counselling support options, and safeguards to ensure fairness and integrity in gameplay. Platforms must also disclose these safety mechanisms, along with their internal grievance redressal procedures, as part of their registration applications.

The grievance framework itself is structured as a two-tier system. Users who are dissatisfied with the outcome of a platform-level complaint resolution may escalate their case within 30 days. If the issue remains unresolved, they may appeal to the Online Gaming Authority, which is expected to resolve such disputes within an additional 30-day period. A further appeal route is available to the Secretary of MeitY acting as Appellate Authority, with a targeted resolution timeframe of another 30 days. Investigations and enforcement actions under the system are designed to be primarily digital, with a goal of concluding proceedings within 90 days of a complaint being filed.

The enforcement regime also introduces proportional penalty structures that take into account multiple factors, including financial gains derived from violations, harm to users, recurrence of breaches, severity of conduct, and corrective actions undertaken by operators. The Authority is empowered to impose civil penalties based on these criteria.

A further key provision in the legislation seeks to prevent regulated financial institutions and payment service providers from processing transactions associated with prohibited online money games. This requirement is expected to necessitate closer coordination between the Online Gaming Authority and financial regulators and may significantly affect the operation of in-app payment systems, token-based ecosystems, and cash-out mechanisms used within gaming platforms.

Once fully operational, the Authority is expected to publish an official list of prohibited online money games and begin formal determinations and registrations under the new regime. The government’s stated objective of the framework is to create a clearly structured regulatory environment separating permissible gaming activities from prohibited gambling-like operations, while embedding financial safeguards, user protection standards, and enforcement mechanisms into the digital gaming ecosystem.

By fLEXI tEAM