Online Gaming: The Impact of the 2025 Bill on Winzo, Dream11, and More
- Farheen Mukadam
- Aug 29
- 8 min read
The Indian government has announced the Online Gaming Bill 2025, which is a very big step in the direction of rightly managing online gaming. The main focus of this bill is on controlling the real-money betting and gaming platforms. This bill is expected to bring about several changes in the gaming world. It will directly affect the popular online gaming platforms such as Winzo, Dream 11, and MPL. Let us take a look at the important aspects of the bill, how taxes will affect the online players, and what is the future of the gaming industry. With these rules in place, both players and the companies running these online gaming platforms need to keep themselves updated, especially regarding the taxes, how withdrawals work, and ensuring that they follow new guidelines.
Table of Contents
Overview of the Online Gaming Bill 2025
The Online Gaming Act 2025 is India’s first central legislation that standardizes the online gaming sector. Earlier, states followed their own interpretations of gambling laws, often banning or allowing certain platforms depending on whether games were classified as “skill” or “chance.” This fragmented environment led to legal battles, investor hesitation, and a lack of clarity for players.
The new Act brings one uniform law across the country. Its purpose is threefold:
Protect players from addiction, fraud, and unfair losses.
Stop illegal gambling and money laundering, often linked with unregulated apps.
Create an ecosystem where safe forms of gaming like e-sports and social games can thrive.
Key highlights include:
Establishment of the National Online Gaming Commission (NOGC) – This will be the apex body regulating licenses, monitoring compliance, and classifying games into different categories.
Complete ban on money-based gaming, regardless of whether it is skill-driven (like Dream11 fantasy cricket) or chance-driven (like poker or rummy). This provision is stricter than earlier court rulings, which had previously protected skill-based games.
Clear exemptions for non-monetary formats like e-sports, casual gaming apps (e.g., Ludo King), and educational games.
Consumer protection safeguards – These include strict Know Your Customer (KYC) norms, separation of deposits and winnings in user wallets, grievance redressal mechanisms, and mandatory risk warnings.
Creation of an Online Gaming Appellate Tribunal, empowered with civil court authority to resolve disputes quickly and fairly.
In short, the Act marks a paradigm shift: India has chosen to prohibit real-money formats while building a regulated, non-financial digital gaming industry.
Key Provisions of the Online Gaming Bill 2025
Licensing & Classification Every gaming company must obtain a license from the NOGC. Games will be classified into four buckets:
Games of Skill (without monetary stakes) – like chess or trivia.
Games of Chance – like lotteries or card games based on luck.
Hybrid Games – combining elements of skill and chance.
Exempt Categories – e-sports, casual fun games, and educational simulations.
Ban on Real-Money Games Unlike older frameworks, the 2025 Act makes no distinction between skill and chance when money is involved. Any game involving financial stakes is banned.
Consumer Protection & KYC Players must undergo PAN-Aadhaar-based KYC verification before using platforms. Wallet balances must be divided into deposits, bonuses, and winnings — preventing companies from misrepresenting bonus cash as withdrawable funds. Platforms must also offer responsible gaming features such as time limits and spending caps.
Tribunal for Disputes A dedicated tribunal has been established for players or companies to raise disputes against unfair practices. This body will fast-track complaints compared to lengthy civil litigation.
AML & Data Rules Companies must comply with the Prevention of Money Laundering Act (PMLA), ensuring funds are not misused for illegal betting or terror financing. Strong data privacy rules have also been mandated to protect users’ personal and financial information.
Apps Banned in 2025
The law’s enforcement began swiftly. In early 2025, five apps were banned for promoting gambling activities:
Winaura
Winstler42
Casinohermes
Amunra1
Polymarket
This action came after a broader crackdown in December 2023, when the government blocked 174 betting and gambling apps, including well-known platforms like Parimatch, Dafabet, Betway, and Mahadev-linked applications.
These bans send a clear signal: illegal betting platforms have no space in India’s regulated digital ecosystem. At the same time, the Act safeguards non-monetary games and ensures that wallet balances in legitimate platforms are secure.
Impact on Major Platforms
The law has directly altered the functioning of India’s most popular platforms:
Dream11 & MPL – Once dominant in fantasy and skill-based real-money contests, both have paused such formats. Deposits are now blocked, but players can still withdraw existing balances.
Winzo & Zupee – Their casual real-money contests will no longer be allowed. These platforms may pivot toward free-to-play, ad-based, or reward-based gaming without cash payouts.
PokerBaazi & RummyCircle – These platforms, centered on card games with money stakes, face a total shutdown under the new framework.
While this raises compliance costs and reduces revenues, it also creates space for innovation in e-sports, gaming content, tournaments, and non-monetary competition models that are safer and government-approved.
Online Gaming Tax Implications for Players
Taxation is a major concern for online players. The Act reshapes this landscape:
No new taxable winnings from real-money games – Since these are banned, players will not generate taxable gaming income going forward.
Withdrawals of old balances – Existing wallet balances remain withdrawable. However, platforms must deduct 30% TDS on winnings before payout.
Income Tax Return (ITR) reporting – Any winnings received before the ban, or during withdrawals, must still be declared under Income from Other Sources.
GST on Online Gaming – Platforms offering e-sports or casual gaming services without financial stakes will pay GST only on service charges, not wagers.
Example:
Particulars | Amount (₹) |
Wallet Balance (pre-ban) | 10,000 |
TDS on taxable winnings (30%) | 3,000 |
Net Withdrawal Allowed | 7,000 |
Thus, while the future tax burden for gamers decreases due to the ban, compliance is still necessary for earlier winnings.
Industry Reactions and Legal Challenges
The law has sparked strong, mixed reactions:
Support – Parent groups, schools, and consumer organizations have praised the Act, citing reduced risks of financial distress, addiction, and illegal betting.
Concerns – Start-ups that thrived on real-money contests fear major job losses, investor withdrawal, and declining user engagement. The ecosystem for fantasy sports, once a billion-dollar industry, is especially shaken.
Legal Challenges – Several gaming companies and industry associations are preparing to challenge the law in High Courts. Their argument: banning even skill-based games with money stakes contradicts earlier Supreme Court rulings, which distinguished them from gambling.
Experts believe that while the short-term shock will be painful, in the long term, the Act could help India build a credible, transparent, and globally attractive gaming industry — centered not on betting but on e-sports, interactive content, and innovation.
Conclusion
The Online Gaming Bill 2025 is not just a tax law, it’s a blueprint for the future of India’s gaming industry. By standardizing rules, ensuring tax compliance, and protecting users, the government is signaling that online gaming is here to stay, but under responsible limits.
For players, it means more transparency but also higher tax liabilities. For companies, it means higher compliance costs but greater legitimacy and investor confidence.
The road ahead may be challenging, but in the bigger picture, the bill could make India one of the safest and most transparent gaming markets in the world.
FAQs
Q1. What does the Online Gaming Act 2025 ban?
The Act imposes a nationwide ban on all money-based games, whether skill-driven (like fantasy sports) or chance-based (like poker, rummy, or betting apps). Unlike earlier frameworks, it makes no distinction between skill and chance when money is involved. Only non-monetary formats such as e-sports, casual social games, and educational games are exempt.
Q2. Why did the government bring this law?
The Act was introduced to curb rising concerns over youth addiction, financial distress, and illegal gambling networks linked with real-money apps. It also seeks to plug loopholes in tax on online gaming and prevent misuse of funds for money laundering and unlawful activities.
Q3. Which apps were banned in 2025 under the new law?
In 2025, five apps: Winaura, Winstler42, Casinohermes, Amunra1, and Polymarket, were banned for promoting gambling. This followed a broader crackdown in December 2023, when 174 betting and gambling apps, including Parimatch, Dafabet, Betway, and Mahadev-linked apps, were blocked.
Q4. What happens to my wallet balance on apps like Dream11 or MPL?
Deposits have been blocked, but existing wallet balances are safe. Platforms are required to allow withdrawals, subject to tax deduction at source (TDS). Winnings will attract a flat 30% TDS before being credited back to the player’s bank account.
Q5. Do players still need to pay taxes on winnings earned before the ban?
Yes. All winnings earned prior to the ban are taxable under the Income Tax Act. TDS will be deducted by platforms, and players must declare winnings under “Income from Other Sources” while filing their ITR.
Q6. How does TDS on winnings work under the Act?
TDS of 30% is deducted on all winnings before withdrawal. For example, if you had ₹10,000 in winnings, ₹3,000 will be deducted as TDS, and ₹7,000 will be credited. The deducted amount appears in Form 26AS, which you can use while filing ITR.
Q7. Can gaming losses be adjusted against winnings for tax purposes?
No. The law does not allow set-off of gaming losses against winnings. For instance, if you lost ₹20,000 on one platform but won ₹50,000 on another, you are still liable for tax on the full ₹50,000 winnings.
Q8. Are e-sports affected by the ban?
No. E-sports, casual social games, and educational games are explicitly exempt. These formats do not involve monetary stakes and are seen as part of the government’s push to promote safe, skill-based digital entertainment.
Q9. What role does the National Online Gaming Commission (NOGC) play?
The NOGC is the new central authority responsible for:
Issuing licenses to gaming platforms.
Classifying games into categories (skill, chance, hybrid, exempt).
Monitoring compliance with KYC, AML, and data privacy requirements.
Enforcing penalties against violators.
Q10. What is the Online Gaming Appellate Tribunal?
The tribunal is a newly created body with civil court powers. Players or companies can approach it for disputes regarding withdrawals, unfair practices, or platform compliance. Its decisions can be appealed further in the Supreme Court.
Q11. How does the law protect users against fraud and addiction?
The Act mandates:
Strict KYC verification using PAN and Aadhaar.
Segregation of user funds (deposits, winnings, and bonuses must be tracked separately).
Responsible gaming features like time and spending limits.
Mandatory disclaimers on the risks of gaming.
Q12. How will GST apply after the ban?
Since money-based games are prohibited, GST at 28% on wagers will no longer apply. For exempted formats (e-sports or casual games), GST will apply only on service charges, subscriptions, or ad revenues, not player stakes.
Q13. Will platforms like Winzo or Zupee shut down completely?
These platforms must stop money-based contests but can pivot to free-to-play, reward-based, or ad-supported models. Some may also expand internationally or focus on government-approved e-sports tournaments to sustain their businesses.
Q14. Are there legal challenges to the Act?
Yes. Some gaming companies and industry associations are preparing to challenge the Act in High Courts. Their argument is that banning skill-based money games contradicts past Supreme Court rulings, which classified them separately from gambling. The outcome of these challenges could shape the future scope of the law.
Q15. What should players do now to stay compliant?
Players should:
Withdraw any wallet balances before deadlines set by platforms.
Collect TDS certificates (Form 16A) for winnings.
Report all winnings in their ITR.
Shift focus to exempt categories like e-sports, trivia, or casual gaming.
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