India’s recent ban on money-based online gaming has set off a storm in a teacup – a very large teacup worth ₹20,000 crore, as claimed.
The government argues it is protecting the poor and gullible. The industry warns of lost jobs, capital flight, and a missed digital opportunity. Both claims carry weight, depending on which side of the bed you got off.
From bustling cyber cafés in the early 2000s to mobile-first gaming empires in the 2020s, India’s online gaming history is the story of technology meeting greed – and colliding with poverty, regulation, and politics.
Around 2023, online gaming in India had crossed ₹16,000 crore in revenues. Fantasy sports attracted 180 million users; e-sports was building a new youth culture, and start-ups like MPL and Dream11 became household names. Cheap smartphones and cheap Jio data turned gaming into a mass phenomenon.
But beneath the glossy numbers came darker stories. For a ponytailed professional in Bengaluru, losing ₹1,000 on an app might be an irritation. For a rickshaw driver in Begusarai, it could mean a week without groceries.
Mental health experts at Lucknow’s King George’s Medical University warned that fantasy gaming apps could hijack the brain’s reward circuits – fuelling addiction even in users from impoverished backgrounds, who lose small amounts like ₹10.
Union Minister Ashwini Vaishnaw underscored some tragedies, saying online gaming had become a “bigger issue than drugs”.
These games, designed with dopamine-triggering mechanics – daily rewards, loot boxes, near-miss spins – were engineered to hook, and the poor were doubly vulnerable because their stakes were not leisure but survival.
With social safety nets already fragile, the government argued it had a paternal duty to shield the weakest.
The pushback
The counter-argument was equally sharp as reports of job losses (MPL) came in and cricket lost its sponsorship (Dream11).
Courts have previously upheld that fantasy sports and rummy are games of skill, not gambling – nuances the ban sweeps aside. And critics rightly warn that prohibition rarely works: it drives activity underground, into offshore apps that are even more predatory.
For millions of young Indians, gaming is more than play. It is identity, streaming, e-sports, and even a path to income. Cutting it off entirely, they argue, is to signal mistrust in youth agency.
Global lessons
India is not alone. Other countries with poorer populations faced the same dilemma, and here’s how they dealt with it.
China imposed some of the world’s harshest restrictions: minors may game only three hours a week, enforced by real-name IDs. The State cast gaming as a moral hazard.
Brazil regulated instead: loot boxes had to disclose odds, games were age-rated, and consumer rights were enforced. At the same time, e-sports was encouraged as a youth industry.
Kenya revoked licenses of giants like SportPesa in 2019, citing tax evasion and addiction. Betting ads were banned for targeting the young, though illegal apps mushroomed.
Indonesia banned online gambling outright on moral grounds, but syndicates flourished underground.
The US left it to the States: New Jersey and Nevada turned online casinos into revenue generators under strict licensing, while Utah and Hawaii maintained blanket bans.
The deeper question
For the affluent, gaming is entertainment; for the poor, it can be a financial quicksand. Does the digital economy extract most from those who can afford it the least? For the State, then, the dilemma is sharp: should it shield the vulnerable at the cost of stifling opportunity, or trust citizens and risk exploitation?
This debate echoes older struggles – alcohol prohibition in the US, lotteries in India, even early resistance to stock markets. In each case, what looked like moral panic was also about who bore the risks and who reaped the rewards.
A smarter balance
I spoke to some gamers from different backgrounds (a corporate and a rickshaw driver were included) and this is what they suggested:
1. Enforce age and spending caps through Aadhaar verification.
2. Mandate algorithmic transparency and fair prize pools.
3. Demand industry self-regulation of advertising and responsible play.
4. Promote e-sports and educational gaming as safe avenues for youth.
5. Target offshore predators, not domestic innovators.
Gaming is not really about games. It is about power, capital, and protection in a society still scarred by poverty.
I think the State is right to worry about the gullible. The industry is right to demand room to grow. The real test is whether India can build a digital economy that does not extract from the weakest to entertain the strongest.
That, more than any app or ban, will decide India’s digital destiny.
(Shubho Sengupta is a digital marketer with an analogue past)
Published on September 8, 2025
