Five months on, PROGA remains unnotified; SC to hear petitions challenging gaming law on Jan 21

Five months after the Promotion and Regulation of Online Gaming Act (PROGA), 2025, was passed, the law remains unnotified, leaving the online skill-gaming industry in regulatory limbo. The Supreme Court is scheduled to hear a batch of petitions challenging the constitutional validity of PROGA on January 21, 2026, before a three-judge bench led by Chief Justice Surya Kant.

The hearing will also include a public interest litigation filed by activist KA Paul, seeking action against online gaming and betting platforms, as well as celebrity endorsements of such websites.

The Supreme Court had earlier pulled up evangelist and politician Dr K.A. Paul during a hearing on challenges to the Promotion and Regulation of Online Gaming Act, 2025, firmly cautioning him against seeking publicity and attempting to widen the proceedings beyond the legal questions before the court, as the bench made it clear that celebrity endorsements and allegations were not relevant to the constitutional validity of the law under challenge.

Dr Paul’s petition alleges that online betting and gaming applications are trapping millions of Indians—particularly the youth—into what he described as an illegal and addictive ecosystem, infringing the right to life guaranteed under Article 21 of the Constitution. The petition claims that the social consequences of such platforms have been severe, alleging that in Telangana alone, 1,023 people have died by suicide due to the influence of betting apps.

The top court had earlier indicated that constitutional challenges to PROGA would likely be heard by a three-judge bench, despite repeated pleas from the gaming industry for an urgent listing. The case raises a fundamental question: whether Parliament can impose a nationwide ban on certain online gaming activities through PROGA. Legal counsel for the petitioners have argued that the matters are “intertwined,” noting that a finding regarding one level of government’s competence would directly impact the other.

The Promotion and Regulation of Online Gaming Act, 2025 (PROG Act) recieved Presidential assent on 22 August,2025 with the dual objective of promoting innovation in e-sports and online social gaming while curbing harmful money games. The law bans all forms of real money gaming both skill and chance.

Industry Flags De Facto Enforcement

The petitions filed by Head Digital Works and other highlight the economic disruption caused by PROGA even before formal notification. HDW, a major skill-gaming operator, argued that the delay in hearing has created a de facto enforcement of the law. According to court filings, banks, payment gateways, and intermediaries withdrew services immediately after PROGA was published on August 22, 2025, citing fear of penal consequences. UPI transactions were blocked, settlements were frozen, and WhatsApp Business communication channels were suspended until compliance undertakings were provided.

The company stated that it has had no revenue for nearly three months, while incurring monthly operating costs exceeding ₹10 crore. Its workforce has fallen from 606 employees to 178. Foreign investor Clairvest reportedly wrote off its entire ₹760-crore investment, citing an adverse regulatory climate.

The filings indicate that user attrition, halted advertising, and frozen payment infrastructure have made continued operations untenable. HDW warned that “every week of delay” compounds what it describes as an existential threat to the company and the wider online skill gaming industry, which employed roughly two lakh people and contributes significantly to direct and indirect tax revenues.

Government Defends PROGA

In response, the Union government has defended PROGA as a necessary intervention to curb risks posed by an unregulated online money-gaming ecosystem, including threats to public order, financial integrity, and vulnerable users. The affidavit highlights foreign-controlled entities, dummy directors, opaque algorithms, and manipulative game designs among the challenges faced by regulators.

The government insisted that Parliament is fully competent to legislate in this sector, arguing that rapid industry expansion without a statutory framework has caused social and economic harm.

With the January 21 hearing, the Supreme Court will have to address these competing concerns, weighing the regulatory objectives of PROGA against the economic and operational disruption faced by the online gaming industry. Legal observers note that the case could set a precedent for Parliament’s power to regulate emerging digital sectors nationwide.