Esports Get a Statutory Boost in India Under the Promotion and Regulation of Online Gaming Act, 2025

The Promotion and Regulation of Online Gaming Act, 2025 (“Online Gaming Act”) marks a pivotal moment for the esports industry since the act formally recognizes esports as a legitimate competitive sport in India. This statutory recognition is expected to bring several benefits to the industry, including improved access to funding and enhanced representation of Indian players in global e-sports events. Additionally, it may also contribute to increased player participation across the country and create new opportunities for sponsors and investors to tap into a dynamic youth driven market.

To operationalize this statutory foundation, the Ministry of Electronics and Information Technology (“MeitY”) released the Draft Promotion and Regulation of Online Gaming Rules, 2025 (“Draft Rules”) on October 2, 2025. These Draft Rules inter alia elaborate the procedural and institutional framework for recognition, registration, and governance of e-sports in India.

Analysis of Definition under the Promotion and Regulation of Online Gaming Act

The Online Gaming Act defines esports as online game which- (i) is played as part of multi-sports events; (ii) involves organized competitive events between individuals or teams, conducted in multiplayer formats governed by predefined rules; (iii) is duly recognized under the National Sports Governance Act, 2025, and registered with the Authority or agency under section 3; (iv) has outcome determined solely by factors such as physical dexterity, mental agility, strategic thinking or other similar skills of users as players; (v) may include payment of registration or participation fees solely for the purpose of entering the competition or covering administrative costs and may include performance-based prize money by the player; and (vi)shall not involve the placing of bets, wagers or any other stakes by any person, whether or not such person is a participant, including any winning out of such bets, wagers or any other stakes;

Notably, an examination of the above definition reveals certain inconsistencies and potential limitations. One key concern that arises is that the act defines esports as games that are played as part of multi-sport events. However, in practice, many major esports tournaments (particularly those organized by game developers) can be standalone events (such as the Call of Duty Mobile World Championship, Free Fire World Series) and therefore may not be a part of traditional multi-sport formats. This narrow framing could risk excluding mainstream esports tournaments from receiving formal recognition under the Online Gaming Act. Furthermore, the Online Gaming Act stipulates that esports games must be “solely” skill based. However, many popular esports games, while fundamentally skill-driven, do involve elements of chance which may be in the form of loot drops, dynamic safe zones, respawning location, etc, all of which forms a part of core gameplay. Therefore, a rigid interpretation of the ‘solely skill based’ criteria could inadvertently bring these games under the barred category, despite their global legitimacy as e-sports titles.

Registration and Governance of e-sports

The Ministry of Youth Affairs and Sports (“MYAS”) has been designated as the nodal authority for promotion and recognition of e-sports. Further, the Draft Rules envisage the establishment of an Online Gaming Authority of India (“Authority”) to act as the central regulatory body responsible for the registration of online games, including e-sports. The Authority exercises a broad mandate including, inter alia, determining whether an online game constitutes an online money game(as defined under the Online Gaming Act) or a permitted game (such as an e-sport or online social game); registering such games; maintaining and publishing a national register of all registered and prohibited online game titles; issuing directions and codes of practice, imposing penalties including cancelling registrations of non-compliant online game service providers (“OGSP”).

In performing its function to classify and register online games, the Authority may act suo moto or upon receipt of an application from OGSPs. For assessing the nature of the game, the Authority shall give due regard to any or all prescribed parameters including whether the game requires users to pay fees, make deposits, or purchase items as a condition for participation; whether such payments function as stakes or consideration for winning; whether participation depends on a prior deposit; whether the game offers winnings, rewards, or payouts that can be redeemed or converted into money; and/or any other relevant factors the Authority deems necessary for making such a determination. It is pertinent to note that the determination of whether an online game qualifies as an e-sport can be made only in the presence and concurrence of a member representing the Ministry of Youth Affairs and Sports. The Draft Rules clarify that an online game which is determined to be an online money game by the Authority shall not be eligible to be recognized as an e-sport.

Rule 12 of the Draft Rules prescribe that an OGSP seeking to offer an e-sport must submit an application in digital form to the Authority, providing details which include but are not limited to name, contact details and statutory registrations of an OGSP, the game’s name and description, category (e.g., recreational or educational), target age groups, revenue model (including ad-based, subscription, or one-time access fee models, excluding staking or wagering), user safety features, and grievance redressal mechanisms. Further, the applicant OGSP must also submit an undertaking that they shall not engage in any activity prohibited under any law including the Online Gaming Act. It must be noted that the above constitutes only an indicative list of particulars, which may be supplemented by additional requirements as prescribed by the Authority from time to time. It is important to note that the Draft Rules state that the registration of an e-sport is mandatory, and no OGSP can provide, represent, advertise, or offer a game as an e-sport without obtaining registration. However, registration is contingent upon prior recognition of the e-sport under the National Sports Governance Act, 2025 (“NSGA”). Therefore, recognition of an esport under the NSGA serves as a prerequisite for registration under the Online Gaming Act.

Upon successful verification, the Authority will issue a Certificate of Registration (“CoR”) that carries a unique registration number and is valid for up to five years. Registered games are added to the National Online Social Games and Esports Registry maintained by the Authority for promoting transparency and enhancing stakeholder confidence.

However, it must be noted that a CoR may be cancelled by the Authority if the OGSP violates directions or provisions of the Act or Rules, fails to provide timely confirmation of recognition under NSGA, or if the registered e-sport undergoes a material change affecting its nature or permissibility, including changes that render it an online money game. In furtherance to the above, an OGSP has an obligation to promptly notify the Authority if its e-sport undergoes any material change such as in its format, features, revenue model, or recognition status of the e-sport under NSGA. If an OGSP is aggrieved by the decision of the Authority, an appeal can be made to the Appellate Authority (i.e. Secretary, MeitY) within 30 days of the decision, in relation to non-registration of an e-sport, cancellation of a CoR etc.

Institutional Promotion and Permissible Revenue Streams

On the developmental front, the Online Gaming Act mentions that the Central Government will actively promote esports through the establishment of training academies, incentive schemes, awareness campaigns and public outreach programs. The Online Gaming Act also envisions coordination between State Governments and recognized sports federations to integrate esports into the broader national sporting policy landscape. While this is a welcome step, the rollout and institutional clarity around implementation mechanisms remain to be seen.

Regarding monetization, the Online Gaming Act permits esports platforms to collect registration or participation fees, provided these are solely for administrative costs and performance-based prize pools. However, it strictly prohibits any form of betting, wagering, or staking, regardless of whether the person placing the bet is a player or a spectator. At this stage it is presumed that legitimate revenue streams for the esports sector may include:

Sponsorships and brand endorsements.
Pay-to-view models for tournaments or streaming rights.
Merchandising and licensing deals for teams or players.

Grievance Redressal Mechansim

Every OGSP offering a registered e-sport must establish and maintain a functional internal grievance redressal mechanism for addressing user complaints. If a user is dissatisfied with the resolution, they may approach the Grievance Appellate Committee (GAC) [which is the committee constituted under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021] within 30 days from the date of the order of the internal grievance redressal body. The GAC will consider the appeal expeditiously and issue appropriate corrective or remedial orders.

If the user still remains dissatisfied, the matter can be further appealed to the Authority, which will review the case and issue final directions, including imposing penalties for non-compliance where necessary. The Authority is required to address appeals promptly, with a target resolution period of 30 days.

This three-tiered mechanism is aimed at ensuring timely and structured resolution of user grievances while maintaining accountability of service providers in the e-sports ecosystem.

Observations

Over the past decade, e-sports have witnessed significant growth leading to widespread global recognition. This progress is highlighted by the upcoming inaugural Olympic Esports Games, scheduled to take place in 2027 in Riyadh, Saudi Arabia. It is anticipated that the Ministry of Youth Affairs and Sports will formulate dedicated guidelines and standards for the organization of e-sports tournaments in India and for facilitating the participation of Indian e-sports teams on international platforms.

However, there are several areas where additional clarity on the legislative provisions will be beneficial in the interest of governance and stakeholder protection. These include setting minimum age limits for participation in e-sport competition, implementing robust mechanisms to prevent age falsification and prioritizing player well-being. Another critical area requiring regulation is e-doping. This includes not just the misuse of therapeutic substances to enhance focus or endurance but also the manipulation of software or hardware to gain unfair advantages. Since India is relatively at a nascent stage when it comes to e-sports regulation, we could witness a lot of legislative and administrative for advancement of this particular sector.

This content is originally posted here: https://www.ahlawatassociates.com/blog/online-gaming-act-2025-and-esports-regulation-in-india