Struggling Indian gaming sector calls for urgent reinforcement, orchestrating support similar to the Supreme Court.
The online gaming industry in India is experiencing a rapid growth trajectory, despite encountering significant regulatory hurdles and taxation issues. This sector, driven by deepening smartphone penetration, affordable data plans, and a young, tech-savvy population, is projected to reach unprecedented heights in the coming years.
### Current State
The Indian mobile gaming market was valued at USD 3.02 billion in 2024, and it is expected to grow at a robust compound annual growth rate (CAGR) of 15.5% from 2025 to 2033, reaching approximately USD 11 billion by 2033. A majority of online gamers are under 40, with strong participation from the 25–40 age group. Regional language content and culturally relevant games are key drivers of increased adoption, alongside the rise of domestic game developers producing original IP rooted in Indian narratives.
However, the regulatory framework for online gaming remains fragmented and inconsistent between federal and state governments. This lack of coordination creates legal ambiguity, complicates compliance for operators, and exposes consumers to risks such as fraud and addiction. Offshore and unlicensed operators exploit these regulatory gaps, undermining enforcement efforts and revenue collection.
### Future Outlook
The Indian online gaming sector is poised for significant expansion, supported by affordable smartphones, better internet penetration in rural and urban areas, and increasing consumer demand for immersive and localized content. The mobile gaming sub-sector will remain a major growth driver.
To sustain this growth, India requires smarter, more cohesive regulation that aligns federal and state policies and addresses the unique aspects of online gaming and gambling. The proposed Online Gaming (Regulations) Bill, 2022 aims to establish an effective regulatory mechanism but must reconcile jurisdictional challenges to be truly effective.
The industry has attracted substantial funding—over USD 2.8 billion in the last five years, including USD 1 billion in 2024 alone—indicating strong investor confidence. Indian studios are shifting towards creating culturally relevant IP that resonates with local gamers, which will enhance user retention and global competitiveness.
Improved regulation could mitigate consumer risks and enable clearer tax frameworks, encouraging formalization and enabling the government to benefit from the sector’s rapid expansion through proper revenue channels.
### Summary
The online gaming industry in India is on a high-growth trajectory, fueled by technology penetration and a vibrant youth demographic. However, regulatory fragmentation and taxation ambiguities remain significant hurdles. Addressing these through coordinated reforms and clearer policies will be critical to unlocking the sector’s full economic and social potential.
If the Court rules with the states on blanket bans and supports full tax claims, it could potentially bring the industry to a grinding halt with hundreds of thousands of jobs at risk. The question remains: Will India's gaming sector be boosted or stifled by regulation? Experts advocate a gross gaming revenue model, where taxes are levied on platform earnings rather than player deposits, to alleviate industry concerns and ensure a steady revenue stream for the government.
The Goods and Services Tax Council (GST Council) has decided to tax the full value of all game entries at 28 percent, a move criticized by the industry as it could lead to a significant increase in taxation. The other case is an appeal by the Directorate General of GST Intelligence (DGGI) relating to Gameskraft Technologies over an unprecedented tax demand of $2.6 billion.
The industry has evolved to include skill-based games such as fantasy sports, card games, and e-sports. The Indian online gaming industry, valued at approximately $2.8 billion in 2021, is projected to reach over $5 billion by 2025. SiGMA Europe is scheduled to take place in Malta from November 11 to 14.
If the court sustains existing legal protections for skill games and rejects "excessive retroactive tax claims," there is a possibility the online gaming industry will rebound with renewed growth and stability.
- The integration of technology in sports, such as fantasy sports and e-sports, is an emerging trend in India's online gaming sector, contributing to its rapid growth.
- As the online sports industry thrives in India, potential regulatory decisions, like taxation on game entries at 28 percent, may influence its stability and expansion in the coming years.
