The Delhi High Court has instructed the Indian government to take swift action in constituting a regulatory authority and finalizing rules for the newly passed Promotion and Regulation of Online Gaming Act, 2025. During a hearing on Tuesday, September 2, Solicitor General Tushar Mehta informed the court that steps to establish the authority and enact necessary regulations were already in progress. The government’s stance is that while it supports the growth of online gaming, concerns about the adverse impacts of online money games, particularly addiction among children and related suicides, have prompted regulatory measures.

Legal Challenges to the New Gaming Law

According to The Economic Times, the Promotion and Regulation of Online Gaming Act was passed by Parliament on August 21, 2025, and received President Droupadi Murmu’s assent. However, the Act has not been officially notified, as the government continues to work on framing detailed rules and setting up a regulatory body to oversee the industry. Solicitor General Mehta explained that once the notification is issued, the government would move forward with constituting the authority and implementing the requisite regulations.

The court was hearing a petition filed by Bagheera Carrom (OPC), a company that has developed an online carrom game, challenging the constitutionality of the new law. Bagheera Carrom’s legal counsel argued that the Act was introduced hastily without sufficient stakeholder consultation and violated fundamental rights. They contended that the blanket prohibition on online money games was unfair, as it indiscriminately banned all forms of online gaming, irrespective of whether the games were based on skill or chance.

The Delhi High Court emphasized that until the regulatory authority is constituted and rules are promulgated, the Act cannot be fully enforced. Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela noted that without these crucial steps, the government would not be able to begin working with the new law. As a result, the bench directed the matter to be revisited after eight weeks for further hearings.

The Act, once enforced, will impose severe penalties on online money gaming platforms. Service providers found in violation could face up to three years of imprisonment and fines reaching ₹1 crore. Additionally, advertising online money games could lead to penalties of up to ₹50 lakh and sentences of up to two years. Despite these harsh penalties, the government’s position, as articulated by Mehta, is that it does not oppose the promotion of online games per se, but it seeks to regulate and restrict money-based games due to the potential harm they pose, particularly to younger players.

Legal Uncertainty for Skill-Based Games

The petitioners, Bagheera Carrom, argue that their game, an online version of the traditional carrom, is skill-based and falls under the category of games that should not be banned. The game, which requires players to pay an entry fee and offers rewards to winners, is yet to be launched, leaving the company in legal limbo. The petitioners contend that the Act’s broad and vague definitions of “online money games,”“e-sports,” and “social games” create uncertainty, putting legitimate businesses at risk of prosecution despite complying with existing regulations.

In defense of the Act, the government asserts that its primary concern is the protection of children from the dangers of online gaming addiction. Mehta highlighted that the government is particularly focused on ensuring that games that involve monetary stakes are properly regulated to prevent negative social consequences.

The court’s decision to delay further proceedings until the regulatory framework is fully established provides temporary relief to businesses and stakeholders who are anxious about the uncertain legal environment. The court stressed that, once the regulations are in place, the industry’s concerns regarding the law’s impact could be addressed more effectively.