India’s Online Gambling Ban Stalls Billion-Dollar Industry, Experts Warn of Lasting Fallout

India’s sweeping ban on online gambling has struck a severe blow to one of the nation’s most dynamic digital sectors, crippling growth, costing jobs, and sending shockwaves across allied industries.

According to iGaming strategist Japneet Singh Sethi, the ban has abruptly halted momentum in what was once a thriving ecosystem.

“The ongoing campaigns have been paused or halted. Recent reports suggested at least 200,000 jobs lost, and related industries — from affiliates to advertising and fintech — were also hit hard,” said Sethi, Advisor for iGaming Markets, Strategy & Scale. “Even grassroots sports leagues lost a major chunk of their revenues. Overall, the ban stalled momentum and morale.”

The ramifications have extended far beyond gaming companies themselves. “It risks derailing a high-potential sector that was contributing billions of dollars to the economy — and this was not just gaming, but fintech, affiliates, cloud services, advertising, events, influencers and more,” Sethi added.

He argued that policymakers have misunderstood the true nature of the online gaming market. “Players need continuity rather than legality. When you ban an industry outright, demand doesn’t disappear — it just moves underground. A controlled regulation with stronger KYC checks and deposit caps, like the UKGC or Malta models, would go a long way,” Sethi explained.

For Sethi, the government’s current strategy sacrifices long-term opportunities for short-term optics. “India had an opportunity to create a Digital Gaming Authority — something tech-forward, agile, with clarity on taxation, licensing and audits. Even a state-wise pilot regulation could have been introduced. A tiered framework would have been far more sustainable than a blanket ban,” he noted.

The effects of the clampdown are also evident in the sports sector, where fantasy gaming platform Dream11 — a major sponsor of India’s national cricket team — now faces uncertainty. “The government sent a clear message by onboarding a new sponsor. But some brands have already pivoted to global markets for visibility, or even into other product segments,” Sethi said. “Until there is legal clarity, they’ll continue to do so. The void left in domestic sports will be harder to fill in the short term.”

Despite the disruption, Sethi believes there is still room for creative adaptation. “Innovation is a necessity now. There’s room for freemium or subscription-based models, which is a decent market in itself. Social casinos, prediction formats with in-game purchases or virtual currency — without monetary benefits to players — remain an option. Zynga Poker is a great example,” he said. “Online club-based games would also be welcomed by players.”

He further suggested that India’s digital gaming sector will eventually find its footing. “The industry surely will get mainstream recognition and structured funding, but it’s also about sanitising India’s digital gaming image — or at least the desire to do so. The target audience is still less monetisable compared to real-money gaming. Esports cannot be seen as a replacement, but rather a parallel growth story.”

Sethi’s remarks come in the wake of parliament’s approval of the Promotion and Regulation of Online Gaming Bill, which criminalises card games, poker, and fantasy sports platforms. Officials have claimed that online gambling drained $2.3 billion annually from 450 million Indians, fueling financial hardship, fraud, and even suicides. Under the new law, offenders could face up to five years in prison.

The government maintains that the legislation aims to curb exploitative platforms while fostering e-sports and educational gaming as part of India’s digital economy. Prime Minister Narendra Modi described the measure as essential to protect society from “the harmful effects of online money games” and to encourage “constructive digital recreation.”

Following the ban, Dream11 has suspended its cash contests, while cricket’s governing body has pledged full compliance with government directives.

Still, for voices like Sethi, the decision marks a profound missed opportunity. “India has the talent, the audience and the capital for gaming to flourish,” he said. “Instead of harnessing it with smart regulation, we’ve stalled a sunrise industry. The long-term cost could be far higher than what anyone realises today.” 

By fLEXI tEAM