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Online Gaming rules propose property-linked penalties, foreign firms face heavy scrutiny
Global gaming giants such as Tencent, Garena, and Epic Games are among those likely to feel the brunt of the proposed framework. Foreign publishers offering games to Indian users will need to register with the central authority and disclose their business models in detail.
Cross-border payments will also come under the scanner of both the Reserve Bank of India (RBI) and the new gaming oversight body, tightening regulatory controls over foreign cash flows in the sector.
The Centre’s proposal to establish a central Online Gaming Authority has opened a new regulatory flashpoint, with foreign and homegrown game publishers facing stricter compliance and enforcement mechanisms, including penalties recoverable as land revenue.
The new Online Gaming Authority of India (OGAI) has been vested with sweeping powers, including those of a civil court, to regulate India’s fast-growing online gaming industry. The framework, which comes under the recently announced draft rules, empowers the Authority to act as a quasi-judicial body, ensuring that online games operate within the boundaries of law and consumer protection.
This is for the first time that an Authority dedicated for online gaming sector will function with the powers traditionally available to a civil court under the Code of Civil Procedure, 1908. This means it can summon individuals and enforce their attendance for hearings, examine persons on oath, receive evidence on affidavit, demand the discovery and production of documents, inspect books of accounts, registers and other records maintained by gaming platforms, and issue commissions for the examination of witnesses or documents.
Effectively, any proceeding before the Authority will be treated as a judicial proceeding, on par with those before a civil court. The Bharatiya Nagarik Suraksha Sanhita, 2023, and the Bharatiya Nyaya Sanhita, 2023, explicitly extend these safeguards, meaning offences such as perjury, destruction of evidence, or contempt will carry the same consequences as they would in a traditional court.
The Centre’s proposal to give the Authority quasi-judicial powers to impose penalties and recover them “as arrears of land revenue.” This effectively allows the government to enforce monetary penalties with the same force as recovering unpaid land taxes, which can involve attachment or auction of property.
The draft rules state, "The amount of any penalty imposed under these rules, if not paid, may be recovered as if it were an arrear of land revenue. The penalties collected under this Act shall be credited to the Consolidated Fund of India."
“Enforcement powers of this nature may be viewed as excessive delegation to a quasi-judicial body,” said Navod Prasannan, Partner at King Stubb & Kasiva, Advocates and Attorneys. The measure could significantly raise the stakes for companies operating in India’s online gaming ecosystem, both domestic and foreign.
A gaming industry executive noted that such provisions are “unprecedented” in the digital sector. “You don’t typically see land revenue provisions in technology regulation. It sends a strong message that the government intends to enforce penalties aggressively.”
Foreign Publishers in the Regulatory Crosshairs
Global gaming giants such as Tencent, Garena, and Epic Games are among those likely to feel the brunt of the proposed framework. Foreign publishers offering games to Indian users will need to register with the central authority and disclose their business models in detail. This requirement goes beyond mere compliance filings—it introduces deeper scrutiny into monetisation practices, operational structures, and cross-border payment mechanisms.
Cross-border payments will also come under the scanner of both the Reserve Bank of India (RBI) and the new gaming oversight body, tightening regulatory controls over foreign cash flows in the sector. Liability could extend to offshore entities, even if they do not have a physical presence in India, as long as their games are accessible to Indian users.
The proposed requirement to report any “material change” that could convert a social game into a money game has drawn criticism for being too vague. For example, adding in-app purchases, rewards, or gameplay modifications might trigger scrutiny, creating uncertainty for developers and investors—both domestic and foreign.
“They may remain outside the net for now, but the moment platforms seek incentives or recognition, or if their mechanics evolve, they could be reclassified,” said an industry lawyer. “This will likely create a two-tier ecosystem where foreign publishers face higher barriers to entry.”
At the same time, multiple ministries—including Electronics and IT (MeitY), Information & Broadcasting, and Sports—alongside financial regulators and law enforcement bodies, will share oversight responsibilities. Without clear lines of accountability, this overlap could compound compliance burdens for international companies seeking to navigate India’s regulatory maze.
While casual games like Wordle or Candy Crush may not need to register unless seeking incentives or recognition, they remain vulnerable to future reclassification. Industry observers warn that platforms may eventually be required to register, making compliance effectively mandatory for all categories of games. This could lead to a two-tier ecosystem—where Indian startups benefit from regulatory flexibility, but foreign publishers face more stringent localisation requirements.
For foreign publishers, the message is clear: operating in India will require deeper localisation, more transparent disclosures, and readiness to comply with land-revenue linked enforcement provisions.
MeitY has invited public comments on the draft Promotion and Regulation of Online Gaming Rules, 2025, with feedback to be submitted by 31st October 2025.
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