The central government is staring at a revenue loss of Rs 10,000–12,000 crore annually after banning real money gaming (RMG), a move aimed at curbing household debt. A senior official told Moneycontrol that while the decision will hurt collections, it was necessary to tackle what was seen as a growing social problem.
Revenue from online gaming had surged since October 2023, when a flat 28% GST was imposed on all online games, including skill-based ones. To soften the blow of the ban, the GST on online money gaming has been raised to 40% from September 22. However, experts warn this may not fully offset the loss. “A higher GST rate on a much smaller base cannot neutralize the structural revenue gap. It may also reduce user participation in skill-based and casual games,” said Prateek Bansal, Partner at White & Brief – Advocates and Solicitors.
The Promotion and Regulation of Online Gaming Act, 2025, passed in August, not only bans all RMG platforms but also prohibits advertisements and restricts banks and financial institutions from processing related transactions. The Act is designed to promote e-sports and non-money online games, signaling a shift in the industry landscape.
Industry players are closely watching how the new tax structure and ban will reshape India’s booming gaming market, which had seen record growth in recent years. Analysts say smaller gaming companies may struggle to absorb the impact, while investors could turn cautious about the sector’s near-term growth prospects.
