India’s online gaming industry is facing a defining moment following the enactment of the Promotion and Regulation of Online Gaming Act, 2025 (PROGA), which has introduced a sweeping prohibition on real-money gaming, including formats previously recognized as skill-based.
The legislation has sparked constitutional challenges before the Supreme Court, raised questions over Parliament’s legislative competence, and unsettled a sector that had until recently operated under judicially affirmed protections. With the Act yet to be formally notified and the Union government directed to respond to multiple petitions, the regulatory future of online gaming remains uncertain.
In this exclusive interview with Yogonet, Vidushpat Singhania, Managing Partner at Krida Legal, examines the legal and constitutional implications of PROGA, the potential paths the litigation and rule-making process could take in the coming months, and the broader impact on India’s digital economy and start-up ecosystem.
He also outlines what a workable regulatory framework could look like beyond 2025, as courts and policymakers weigh consumer protection, federal balance, and the need for legal clarity in a rapidly evolving digital sector.
The Promotion and Regulation of Online Gaming Act, 2025 (PROGA) has sparked intense debate for effectively banning all forms of real-money gaming, including those previously classified as skill-based. How do you interpret the legal and constitutional implications of this central law?
The Promotion and Regulation of Online Gaming Act, 2025 (PROGA) represents a fundamental policy shift because it treats all real-money games, including established games of skill, as prohibited. This raises three clear constitutional concerns:
Under Article 19(1)(g) of the Constitution of India, businesses offering skill-based real-money games are engaged in a legitimate occupation. The Hon’ble Supreme Court in R.M.D. Chamarbaugwala v. Union of India and in Dr. K.R. Lakshmanan v. State of Tamil Nadu, and several High Courts in cases involving online gaming, have consistently held that games of skill are protected commercial activities.
A blanket prohibition is therefore a direct and severe restriction and unlikely to satisfy the proportionality test under Article 19(6) of the Constitution of India due to the availability of less intrusive measures such as licensing, age gating and norms for harm-prevention that several international jurisdictions have put in practice.
The PROGA further creates a federalism issue, given that “gambling” and “betting” fall within the State List, and games of skill have been held to fall outside gambling entirely. Therefore, PROGA’s validity under the Union’s legislative powers could be questioned, particularly given that gambling and betting are State List subjects.
However, the Act could potentially be defended under interstate commerce or information technology entries that the Union relies on, since entries related to telecommunications or interstate digital activity, such as online gaming, operate entirely through the internet. It remains to be seen how the Hon’ble courts may permit a central law to override a well-settled judicial classification.
The PROGA also conflicts with the long-standing jurisprudence that games of skill cannot be treated as gambling. A challenge under Article 14 is conceivable on the basis that classifying skill-based and chance-based games together may lack a clear rational connection to the legislative objective. Whether such a challenge would succeed remains a matter for judicial determination.
Given these factors, the Hon’ble Courts may uphold consumer protection features, but the complete ban on real-money skill gaming is unlikely to withstand constitutional scrutiny unless the Union can show strong empirical evidence that cannot address the harm.
The Supreme Court has directed the Union government to file a detailed response to the petitions challenging PROGA, and the Act itself has yet to be formally notified. From a regulatory and procedural standpoint, what are the possible outcomes we could see in the coming months?
The recent implementation of the Digital Personal Data Protection (DPDP) Act, 2023 (“DPDP Act”) provides a useful reference point for understanding how PROGA may progress:
Under the DPDP Act, the draft Digital Personal Data Protection (DPDP) Rules, 2025 (“DPDP Rules”) were released for consultation and finalised only after extensive stake regulation holder feedback and formal notification followed thereafter. Similarly, with PROGA’s draft Rules and consultations complete, the next procedural step is formal notification, whether in full or in phases.
The DPDP Act was notified in a staggered manner, with administrative provisions coming into effect first and compliance obligations being sequenced over time. A comparable phased rollout for PROGA remains plausible, especially for obligations requiring institutional or industry readiness.
DPDP’s rollout was driven by executive timelines; however, in contrast, PROGA’s notification strategy may be calibrated around the pendency of constitutional challenges, including the absence of interim relief.
Further, for DPDP notification, triggered downstream steps such as final DPDP Rules, guidance documents, and transition timelines. PROGA can be expected to follow a similar pattern once notified.
Possible outcomes in the coming months
On the court side:
- The Union’s detailed counter-affidavit will be filed in response to the petitions, followed by rejoinders from the petitioners, completing the pleading stage.
- Once pleadings close, the matter is expected to be listed for substantive hearings on constitutional competence and classification.
On the government side:
- With Draft Promotion and Regulation of Online Gaming Rules, 2025 (“Draft Rules”) and stakeholder consultations already completed, the next step is the formal notification of Rules and enforcement of PROGA either in full or in phases.
- The government may also finalise and publish the Draft Rules, depending on how the litigation progresses.
- If the relevant provisions of PROGA are notified, as with other recent regulatory regimes (e.g., DPDP), the government may choose to notify the provisions establishing the Authority (as provided in Section 8 of PROGA) early, either prior to or alongside the notification of substantive compliance obligations.
Overall, it can be expected that the Hon’ble Court shapes the constitutional framework while the government moves toward notification and operationalisation of the PROGA.
The petitioners argue that the law has brought the online gaming industry to a standstill, with job losses and investor uncertainty mounting. What does this period mean for India’s digital economy and start-up ecosystem? Is there a middle path that could balance consumer protection with industry viability?
I might not be the right person to comment on the impact on the digital economy. However, the news stories do suggest that there has been a significant and negative impact on the gaming ecosystem.
India’s online skill-gaming sector was earlier safeguarded by Article 19(1)(g) of the Constitution, as affirmed by several court judgments. The new PROGA has shifted this to a strict statutory regime, requiring gaming and sports-tech startups to adopt comprehensive compliance measures from the start: mandatory KYC, formal grievance redressal systems, and registration or approval from the designated Authority. Current constitutional challenges focus on three issues:
- Whether Parliament has encroached on the State List powers;
- Whether the restrictions are reasonable under Article 19(1)(g); and
- Whether the immediate compliance requirement is arbitrary.
The Supreme Court’s decision will shape future regulatory limits in India’s digital economy.
Drawing from the phased implementation of the DPDP Act and Rules, a similar transitional approach for online social games (not prohibited money games) would enable operators to adapt without risking user safety. Additionally, empowering the Authority to issue binding guidance and advance rulings would eliminate ambiguity and prevent over-compliance or operational paralysis.
Ultimately, procedural fairness, phased compliance, and clear obligations would uphold PROGA’s protective intent while allowing legitimate digital entrepreneurship to grow.
Welcoming 2026, what kind of regulatory framework or amendments would you like to see emerging from this episode? Do you think India is moving toward a more harmonized national gaming policy, or are you headed for a fragmented regulatory sector shaped by state-level interventions and ongoing litigation?
The case of Head Digital Works Private Limited and Anr. v. Union of India , which challenges the constitutional validity of the PROGA, will provide an important opportunity to understand India’s approach to online gaming regulation. From a legal standpoint, the sector would benefit most from a framework that is coherent, predictable, and administratively workable.
However, as is the case with any prohibitive statutes, the primary need of the hour is clarity of legislative competence. The Hon’ble Supreme Court is presently grappling with whether online gaming falls within the Union’s remit or remains a State subject linked to “betting and gambling,” an explicit constitutional or statutory clarification without disturbing the federal balance would reduce prolonged disputes and prevent operators from facing conflicting obligations across jurisdictions.
Equally important is the establishment of uniform and precise definitions. The existing lack of clarity around terms such as “betting,” “gambling,” “online money games,” “online social games,” and “stakes” has led to significant operational uncertainty. A harmonized national glossary, supported by binding regulatory guidance and an advance ruling mechanism, would provide much-needed predictability and enable both operators and the regulator to respond effectively to evolving game formats.
As detailed hereinabove, a phased roll-out plan similar to the ones adopted for the DPDP Act and DPDP Rules would be an aspect that would also provide time for the litigation and hopefully finality on the constitutional challenge to the PROGA.
The PROGA and the digital economy it envisions, therefore, will depend largely on the judiciary’s resolution of competence issues and Parliament’s willingness to legislate with precision. However, it is evident that the sector requires legal clarity more than legal control; therefore a well-structured, centrally guided but consultative regulatory mechanism may offer the most balanced path forward in 2026.
