Supreme Court Defers Review of Online Gaming Ban, Extending Uncertainty for India’s Real-Money Gaming Sector

India’s online gaming industry remains mired in legal limbo after the Supreme Court deferred hearing challenges to the country’s sweeping real-money gaming (RMG) ban until January 2026, prolonging a crisis that has already brought much of the sector to a halt.

Gaming companies had pressed the judiciary for urgent relief against legislation that has effectively frozen their operations nationwide. However, their petitions will not be taken up in the near term. On December 11, a bench headed by Chief Justice Surya Kant heard a plea for early listing from Head Digital Works (HDW), the parent company of A23 Rummy. HDW, alongside other RMG operators, has questioned the constitutional validity of the Promotion & Regulation of Online Gaming Act (PROGA), which parliament passed in August.

Although petitioners sought expedited consideration, the court signaled that the matter would be placed before a three-judge bench sometime next year. Seeking to reassure counsel, Chief Justice Kant remarked, “Everything is shut down. We are listing in January. That is what I am promising.”

The PROGA legislation, introduced and enacted with limited parliamentary discussion, imposes a blanket prohibition on online platforms offering real-money gaming services. Crucially, the law makes no distinction between games of chance and skill-based offerings such as rummy, fantasy sports, poker and esports. Violations carry severe consequences, including imprisonment of up to three years and significant monetary fines.

Supporters of the law argue that such strict measures are necessary to curb the harms associated with real-money gaming. The Centre for the Promotion & Regulation of Online Gaming has attributed the rapid and largely unregulated growth of the sector to problems including financial fraud, money laundering, tax evasion and even the risk of terrorism financing.

Bansuri Swaraj, a Lok Sabha member, strongly defended the ban, claiming that PROGA “unmasked the wolf for what it is” and portraying the industry as a harmful social influence. She said the legislation prevents operators from concealing themselves “behind the fig leaf of ‘skill’.”

The gaming industry, however, has pushed back forcefully against this narrative. HDW has described the law as a “product of state paternalism” and has asked the Supreme Court to strike it down as unconstitutional. Senior advocates C. Aryama Sundaram and Arvind Datar, appearing for HDW and other challengers, told the court that the industry has been virtually paralysed by the legislation, despite the fact that PROGA has yet to be formally enforced.

In the wake of the law’s publication on August 22, banks, payment gateways and other intermediaries began withdrawing support from RMG operators. HDW informed the court that its revenues had dropped to zero for nearly three months, even as it continued to incur monthly operating expenses exceeding Rs100m (US$1.2m). The company also reported deep cuts to its workforce, shrinking from 606 employees to just 178, and revealed that foreign investor Clairvest had written off its Rs7.6bn ($91m) investment.

The impact across the wider industry has been equally stark. By mid-November, banned RMG platforms had collectively recorded asset write-downs of more than $840m, while an estimated 7,000 jobs had been lost. Prior to the ban, the sector was believed to employ around 200,000 people and generate annual revenues of approximately $2.75bn.

The Supreme Court indicated that the postponement is driven by the intricate constitutional questions raised by the petitions. The current challenges are also intertwined with the ongoing Gameskraft case, which examines whether state governments have the authority to regulate online gaming. The new petitions add another layer by questioning parliament’s power to impose a blanket, nationwide prohibition.

According to the court, these interconnected issues necessitate a consolidated hearing before a larger bench. Reports in the local media suggest that arguments are likely to be heard on January 21, 2026, once the bench is formally constituted. Industry stakeholders warn that any further delay could accelerate the shift of Indian players toward offshore platforms.

Jaya Chahar, Founder and CEO of JCDC Sports, cautioned that the prohibition “pushes fan engagement away from regulated Indian platforms into unregulated offshore spaces, which defeats the very intent of consumer protection.”

By fLEXI tEAM