'Exploitative' online money gaming in India causing financial, health and social harm, analysis shows

“Exploitative” online money gaming in India is harming people’s financial and mental health and causing deep social problems, a new study shows.

The analysis says new legislation which bans these games is constitutionally defensible and justified.

It highlights how the business models of companies running the games are designed to exploit users through aggressive promotional spending and addictive design features.

The study alleges some companies are spending up to 70 per cent of revenue on promotional activities designed to create addicted users who will subsequently lose far more than they receive in bonuses.

The new legislation, introduced in India this year, imposes a comprehensive ban on online money games, regardless of whether they are games of skill, chance, or mixed formats. It marks a decisive departure from the jurisprudential framework established under the Public Gambling Act 1867.

The law was passed against a backdrop of fragmented judicial interventions and state-level prohibitions, where prior blanket bans were struck down as unconstitutional.

The study was carried out by Gaurav Pathak, Assistant Professor from Jindal Global Law School, India; Mohit Yadav, co-founder of meta-database firm, Altinfo; and Dr Anush Ganesh, Postdoctoral Research Fellow from the University of Exeter Law School. They carried out financial analysis of major gaming platforms and documented suicide statistics.

The act of 1867 outlawed common gaming houses while carving out exceptions for "games of mere skill", creating enduring legal arguments about whether activities were "gambling" or "skill”. Courts repeatedly held that games such as rummy and fantasy sports involved skill, entitling them to protection. Operators were compelled to litigate game-by-game, resulting in inconsistent outcomes across states.

The legislation lost impact and relevance in the era of online gambling. The new Act, which focuses on whether there are stakes, treats all online money games as structurally harmful, regardless of whether skill predominates.

Mr Pathak said: “Our analysis shows the business models of major Indian real money gaming companies are fundamentally predicated on user exploitation rather than skill-based competition. These platforms operate through what can only be characterized as predatory design, spending extraordinary sums to "hook" users before extracting maximum value through addictive gameplay mechanics. The impact of this is staggering.”

Government estimates indicate that 45 crore (450 million) people lose approximately Rs. 20,000 crores annually through online money gaming. Many young people have been classed as suffering from “Internet Gaming Disorder” and there have been cases of gaming-related suicides across India.

Mr Yadav said: “The new Promotion and Regulation of Online Gaming Act, 2025 Act will not prohibit innovation in gaming itself, it only outlaws monetisation through stakes.”

Platforms are allowed to operate as free-to-play models, subscription services, or advertising-driven businesses. Researchers say the government's intention is not to suppress creativity but to sever the link between gaming and gambling.

Dr Ganesh said: “The ban is not an anti-business measure but as a welfare-driven recalibration of gaming markets away from predatory practices towards sustainable, non-exploitative business models. It provides a model for other democracies confronting similar challenges.”