Online Gambling Ban in India to Begin October 1 With Strict Penalties

A sweeping shake-up is underway in India’s real-money gaming space. In the last few days, ministers, regulators, and industry voices have mapped out what the next month looks like: tougher rules, stiffer penalties, higher taxes—and real concern that play could drift to illegal offshore sites.

Good to know

• The Promotion and Regulation of Online Games Act, 2025 is slated to take effect on Oct. 1, with rules finalised after multiple rounds of consultations, per the IT Minister.
• Authorities say they have blocked 1,524 illegal betting/gambling apps and sites since 2022, and banks will be barred from processing payments for money games.
• Industry outlets and analysts warn that a blanket ban on money games could push players to the grey/black market, especially offshore platforms.

The big headline this week came from Union Minister Ashwini Vaishnaw as reported by The Economic Times, who confirmed the government is “targeting” Oct. 1 to implement rules under the new law after “multiple discussions” with gaming companies, banks, and other stakeholders. He added the ministry would take “a more consultative approach” if some segments needed extra time, but the plan remains to start implementing from Oct. 1.

The Act, passed in August, bans all forms of online money games, prohibits advertising for such games, and bars payment flows to them. Penalties reported this week include up to three years’ imprisonment and fines for offering money games, and up to two years for those promoting them—including influencers. Banks and payment firms would be prohibited from facilitating those transactions.

Critics are warning that prohibition won’t eliminate betting but “redirect it to illegal offshore sites,” noting the bill criminalises online play for money and its promotion, with banks blocked from processing cash-game payments. Vaishnaw said that iGaming providers “exploit users with false promises of profit,” and that the move aims to “avoid a big evil that is creeping into society.”

At the same time, The Indian Express underlined the government’s national-security and consumer-protection rationale—citing concerns about money laundering via digital wallets and crypto, plus offshore entities evading Indian tax and legal obligations. The paper also detailed the enforcement teeth: prison terms and fines for operators and promoters, plus blocking of financial rails. It reiterated the Oct. 1 start date and added that data-protection rules are expected before Sept. 28, a parallel development relevant to platforms that hold user data.

Meanwhile, a parliamentary reply tallied enforcement since 2022: 1,524 takedown/blocking directions against illegal betting/gambling websites and apps through June 2025. Officials also explained that DGGI has authority to order blocks and that the 28% GST regime on online money gaming (in place since Oct. 2023) still applies—alongside the fresh policy push.

The macro policy picture this week was rounded out by coverage in The Economic Times, which emphasized both the government’s outreach to industry and the stated goal of promoting esports and non-gambling online games even as cash games are shut down. Vaishnaw described an extensive consultation process and left the door open to staged adoption, but reiterated that rules “will be promulgated with effect from 1st October.”

What changed this week—and what people are saying

1) A firm date, plus specifics on penalties and rails.
With the Oct. 1 target emphasized repeatedly, coverage clarified who could be punished and how—from platform operators to promoters, with banks/payment firms obliged to prevent transactions. This concreteness marked a shift from earlier ambiguity around timelines and enforcement mechanics.

2) Fears of a migration to illegal/offshore sites.
Several outlets raised the same concern: in practice, bans risk fueling the black market. Players interviewed by AFP said—“We have done this before and will do it again … We will go back to our old ways of making money”—as well as a fantasy-sports fan predicting a “sudden boom” in offshore usage via VPNs and proxy cards.

3) Ongoing blocking and tax moves frame the crackdown.
Even before Oct. 1 arrives, the data points to an escalating squeeze: 1,524 platforms blocked since 2022; and a high-tax environment on money games (28% GST already in force, with other reporting this month spotlighting talk and reactions around hikes in the broader betting category). Taken together, blocking plus taxation plus criminal penalties signal a comprehensive deterrence approach.

4) Parallel push to promote non-money games and esports.
It is important to stress the government’s intent to nurture esports and safe online social games—framed as a way to keep developers and players engaged in non-gambling modes even as the money-game category is shut.

How it affects operators, players, and payment rails

For operators still offering money games in India, the direction is unambiguous: cease cash play, scrub advertising, and stay off Indian rails—or face criminal exposure and blocks. Many firms had already suspended money-game products following passage of the law last month, according to Indian Express.

For players, two realities will coexist in the near term:

• Onshore, legal money-game options disappear on Oct. 1, and ads/promotions get risky for influencers and affiliates.
• Offshore, illegal sites will still try to recruit Indian users. Multiple sources warned that VPNs and alternative payment methods could keep that pipeline open, but those routes carry loss of consumer protections, heightened fraud risk, and no legal recourse if funds vanish. As one source put it, “A habit once formed cannot be broken easily… people will find ways to gamble,” but that path will be unprotected.

For banks, wallets, and fintechs, the job gets tougher. They’ll be expected to detect and block transactions linked to money gaming, including offshore platforms, under the new rules and directions mentioned this week. Joint meetings with the Department of Financial Services and MeitY have already happened, with financial firms asking for “detailed guidelines” and reasonable time to build out controls.

The open questions to watch

• Implementation cadence: While Oct. 1 is the target, the minister has signaled willingness to be “consultative.” Watch for any phased rollouts, additional circulars, or grace periods for specific obligations.
• Litigation risk: Constitutional challenges are already brewing, with arguments about proportionality and economic rights (Article 19(1)(g)). How courts balance consumer harm versus business freedoms will shape the ecosystem.
• Effectiveness of blocks: The government can and does issue blocking orders (1,524 to date), but mirror sites and workarounds are common. Monitoring how quickly takedowns happen—and whether payment interdiction closes loopholes—will be key.
• Migration to esports and non-money titles: Policymakers want esports and non-gambling games to grow. Whether studios and leagues can monetize those safely and at scale (without predatory “freemium” mechanics) is the next test.

Bottom line

It has become surely a a two-track story. On one track, the government is locking in Oct. 1 for the Online Games Act and pairing it with payments interdiction, ad bans, and criminal penalties. On the other, experts caution that prohibitions can send demand underground—a consistent theme in iGaming markets worldwide. As Vaishnaw told media, the goal is to protect users from “false promises of profit,” but as analysts and players countered, the grey market is resilient. The next month will show whether India’s mix of blocking, banking controls, and penalties can meaningfully shrink illegal play—or simply change where it happens.

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