A key feature of the newly notified rules is the provision for setting up a centralized digital gaming authority. However, the government has clarified that online games not involving real money will not require mandatory registration, offering relief to a large segment of the gaming industry.
Investigation and Enforcement
As per the notification, offences under the law will be investigated by designated cyber authorities. These include police officers heading cyber cells in states and union territories, as well as nodal cyber officers appointed at various administrative levels such as police stations, districts, or commissionerates.
Three Categories of Online Games
The rules continue to classify online games into three distinct categories:
Online Social Games: These games can generate revenue through subscriptions or similar models but cannot offer payouts to users.
E-sports: These allow financial inflows and outflows in the form of pre-declared prize money, provided they are recognized as legitimate sporting events.
Online Money Games: These involve wagering or staking money with potential winnings and are strictly prohibited under the law.
Officials have noted that certain e-sports formats could fall under the “money gaming” category depending on their structure. The final determination in such cases will rest with the gaming authority.
Role of the Gaming Authority
The rules mandate the creation of an Online Gaming Authority of India, which will function with quasi-judicial powers similar to those of a civil court. The authority will have the power to summon individuals, conduct inquiries, and adjudicate disputes. Its functioning is expected to be fully digital.
The authority will be headed by the Additional Secretary of MeitY and will include representatives from key ministries such as Home Affairs, Financial Services, Information and Broadcasting, Youth Affairs and Sports, and the Department of Legal Affairs.
Beyond enforcement, the authority will also serve as the primary body for classifying games. Platforms seeking clarity on whether their offerings qualify as permissible or fall under prohibited categories can approach the authority for a ruling. It will also handle user complaints and take action against violations.
Background: The PROG Act, 2025
The PROG Act was passed by Parliament on August 21, 2025, and received Presidential assent a day later. The legislation aims to curb pay-to-play models and regulate the rapidly expanding online gaming ecosystem.
Under the Act, offering or facilitating online money gaming services is prohibited, with penalties including up to three years of imprisonment and fines reaching ₹1 crore. Advertising such platforms can attract up to two years of imprisonment and fines of up to ₹50 lakh.
With these rules now in place, the government seeks to strike a balance between fostering innovation in the gaming sector and protecting users from financial risks associated with online wagering.
