The Dark Side of Real-Money Gaming Which Dominates Indian Market: Addiction, Regulation, and Reform
- Rohit K R
- Aug 1, 2025
- 3 min read
When I drilled down “Who is Making Money by Breaking Down India’s ₹312 Billion Gaming Industry” in my previous article, the data showed that the Indian market is majorly driven by Real Money Gaming (RMG). India’s RMG sector has fueled a ₹312 billion industry led by many leading platforms. Behind the headlines lies a less discussed truth about many players slipping into addictions, financial distress and emotional crises. With the recent ban on online gaming by Maharashtra, I looked deeper and below are my findings.
Addiction in Real Money Gaming: More Than Just Losses
Compulsive playing and rapid financial loss are emerging as common themes:
A young woman initially won ₹2 lakh playing online games, then spiraled into ₹9 lakh debt, and attempted suicide revealing the psychological toll of addiction.
A police constable in Maharashtra spent his entire salary and borrowed to fund online rummy, requiring psychiatric treatment.
These stories illustrate how easily RMG’s reward mechanisms like notifications, leaderboards, small stakes can trap individuals, especially when there are no self regulation tools or limits in place.
Who Is Most Vulnerable?
Risk is highest among:
Youth (18-25) exposed through social media ads.
Non metra players where financial literacy is low.
Lower income groups chasing quick wins as a livelihood.
Structured as games of skill, or marketed that way, many platforms mask mechanisms that more resemble gambling than gaming. This underscores that potential for harm where regulatory safeguards are weak or absent.
Regulation: Patchwork Law in Practice
Until recent times, RMG operated in largely legal grey area fueled by differing state laws:
The 2023 IT Rules amendments aimed to establish a framework for ‘permissible online games’ via self-regulator bodies.
However, no self regulatory body has been operationalized yet due to concerns over industry dominance and lack of consensus.
States like Telangana, Andhra Pradesh, and Odisha have imposed bands; others continue grappling with distinctions between skill and chance leading to regulatory confusion.
The GST Disruption
The 28% GST imposed in mid-2023 on total deposits (not merely platform fee) dramatically impacted the ecosystem:
Platforms slashed bonuses and prize pools to accommodate tax changes.
One result was that many users shifted to offshore platforms with little regulation or security.
The tax’s intention to inhibit excessive wagering may have reduced visible gambling, but also drove users underground into riskier, untaxed platforms.
Fraud and Cyber Risks
Emerging threats go beyond addiction, criminals are actively exploiting gaming platforms:
Children are being lured with cheat codes, only to click on malicious links that install spyware or lead to digital blackmail.
Digital wallets and in game transactions are being used to launder money making fraud difficult to trace.
These vulnerabilities compound the risks for players in unregulated environments.
Toward Reform: What India Needs Next
To align growth with responsibility, India should adopt the following reforms:
Responsible Gaming Features: Mandatory daily monetary/time limits, self exclusion options, and progress dashboards.
Verifiable Age and KYC Checks: Platforms must enforce strict identity verification and age gates to prevent underage use.
Consumer Awareness and Education: Nationwide campaigns and digital literacy programs are critical for Tier - 2/3 cities where exposure is rising.
Central and State Legal Clarity: The proposed Karnataka Gaming Authority Bill (2025) aims to license operators, regulate operators, and curb unlicensed platforms. Maharashtra’s CM Fadnavis recently called for federal legislation to curb “new age addictions” from unchecked platforms.
Stronger Self-Regulation: Industry bodies like AIGF and FIFS must define and enforce standards including transparency, fair marketing, and player protection.
The Paradox: Economic Boom, Social Risk
In FY2024:
India saw 148 million paying gamers, many via RMG.
RMG contributed ₹179-190 billion to a ₹312 billion industry, yet public confidence remains fragile.
Without structured reform, growth risks being unsustainable and harmful.
Conclusion: A Wake Up Call
Real money gaming in India isn’t inherently flawed, it’s the pace and structure of its growth that remains alarms. Regulatory steps, safer platform design, and greater public awareness can convert RMG into a sustainable contributor, not a public health crisis.
By balancing innovation with responsibility, India can ensure gaming remains empowering and not exploitative.
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