Video games freed from RMG shadow, industry hails ‘Early Diwali Gift’ from Govt
On one hand the Real Money Gaming industry is in turmoil and has opposed the bill, the video games and esports industry is hailing the government for demarcating RMG from video gaming and esports industry.
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For India’s video games and esports industry, Diwali has arrived early. The Union Government has finally granted the long-awaited recognition of video games as a separate entity from real money gaming (RMG), bringing relief to developers, publishers, and esports organizations who have for years campaigned for a clear distinction within the online gaming ecosystem.
The landmark Promotion and Regulation of Online Gaming Bill, 2025 introduces a structured framework for the industry, formally recognizing esports as a legitimate sport and laying down rules to foster innovation, consumer protection, and global competitiveness. On one hand the Real Money Gaming industry is in turmoil and has opposed the bill, the video games and esports industry is hailing the government for demarcating RMG from video gaming and esports industry.
For years, the Indian video games industry has been demanding separation from real money gaming platforms, which often faced regulatory scrutiny for their business models. Video games, despite being focused on entertainment, education, and creativity, frequently got caught in the crossfire due to the lack of policy distinction.
“We have written to the government multiple times to demarcate us from real money games. Video games are played for fun and creativity, but often get maligned due to financial controversies linked with the RMG sector. Finally, the government has given us major relief,” said a video game developer, speaking on condition of anonymity.
The Bill recognizes the online gaming sector as one of the fastest-growing segments of India’s creative economy, highlighting its potential for employment generation, cognitive development, and global competitiveness.
An industry veteran and a member of Game Developers Association of India said, "We are awaiting the Bill to be passed in both the houses. The government has finally heard our requests. We truly believe that India will be a global leader in the AVGC-XR space and generate jobs and talent for Atmnirbhar Bharat."
Central Regulatory Framework
The Bill proposes the creation of a central regulatory authority to oversee the sector. This authority, composed of a Chairperson and members, will be responsible for:
Registering and recognizing esports, educational, and social games.
Setting guidelines and codes of practice for safe, transparent, and age-appropriate gaming.
Determining whether a game qualifies as an online money game, ensuring a clear boundary between permissible digital play and prohibited gambling-style platforms.
Handling grievances and user complaints, particularly in cases where games may harm consumer interests.
Promoting research, training, and awareness on the constructive use of gaming technologies.
All gaming platforms will be mandated to comply with the Authority’s orders, ensuring a uniform regulatory framework nationwide.
Esports Gets Formal Recognition
Perhaps the most significant development is the formal recognition of esports as a sport in India. The Bill defines esports as competitions where the outcome is determined solely by factors such as “physical dexterity, mental agility, strategic thinking, or other similar skills of players”.
Prize money will be permitted through registration or participation fees, but strictly without betting, wagers, or stakes.
The Bill also calls for the establishment of training academies, research centers, and incentive schemes to nurture esports talent, in addition to building competitive platforms that can position India prominently on the global esports map.
“This is fantastic news. The government’s roadmap will boost the AVGC-XR sector, generate employment, and enable Indian esports to flourish globally,” said the owner of a Mumbai-based esports organization.
The separation of video games from RMG is widely seen as a turning point for India’s gaming future. Industry leaders believe the move will boost investor confidence, attract global publishers, and help India position itself as a credible hub for innovation in gaming and esports.
“The structured recognition of esports and social gaming provides India with an opportunity to lead in the global gaming value chain,” the Bill’s Statement of Objects and Reasons notes.
One industry veteran summed it up: “This is the moment we’ve been waiting for. With policy clarity, India can now finally unlock the true potential of its gaming and esports industry.”
