India’s Ban on Fantasy Games & its online gaming culture

India's recent ban on real-money gaming through the Promotion and Regulation of Online Gaming Act, 2025 (set to formally come into effect on 1st October, 2025) is an end to the dominance of such platforms that flourished under regulatory grey areas. Millions of Indians were attracted by the illusion of quick and easy rewards, while these platforms raked in billions in revenue. The ban has both garnered support and triggered outrage. However, the heart of the issue is not how much revenue the government or the industry might lose, but assessing how such economic gains affected the nation.

Rise of Fantasy Gaming:

India’s gaming sector has grown rapidly over the past few years. It was valued at ₹31,938 crore ($3.7 billion) in 2024 with 86% of the total attributed to real-money gaming.

Fantasy platforms, such as the likes of Dream11 and Mobile Premier League, were a major catalyst for this growth. Riding on the fanaticism of cricket and Indian Premier League (IPL) , Dream11 grew from just 1 million users in 2014 to over 220 million by 2024, even becoming India’s first gaming unicorn. The real-time, fast-paced format of IPL made fantasy gaming attractive to the Indian market as users could create multiple teams and participate with minimal entry fees with the allure of winning lakhs overnight. In 2024 alone, fantasy sports revenues during the IPL touched over ₹4,000 crores which was a 25-30% increase over the previous year.

The ecosystem soon became self-perpetuating. Dream11 paid ₹358 crore to sponsor the Indian cricket team from 2023 while simultaneously promoting its platform to millions of cricket fans. However it had to eventually withdraw from sponsoring the team ahead of the Asia Cup 2025, due to the aforementioned act.

The Eyewash of “Skill” :
Over the past few years, fantasy gaming companies were able to shield themselves from regulatory oversight by labelling themselves as “games of mere skill” rather than chance. This classification relied on the legal precedent that games where skill has a predominant influence over chance are exempt from gambling prohibitions under the Public Gambling Act of 1867, which has been adopted by several states.

Now, the courts have also consistently upheld this distinction. The Punjab and Haryana High Court in Varun Gumber v. UT of Chandigarh (2017) and the Bombay High Court in Gurdeep Singh Sachar v. Union of India (2019) ruled that Dream11 qualified as a skill-based game. In 2020, the Rajasthan High Court also dismissed a petition against the platform in the Chandresh Sankhla v. State Of Rajasthan case along similar lines.The Supreme Court eventually upheld these decisions in 2021, lending misplaced credibility to the industry.

Consequently, such legal interpretations created a regulatory gray area that was exploited to its full extent. While there was an emphasis on knowledge of player statistics and team composition in all the aforementioned cases, the core mechanics were still heavily reliant on unpredictable elements beyond the user’s control such as a cricketer's injury, weather conditions, or umpire calls.

Consequences of Weak Regulation:

The "skill-based" classification raised questions over the masking of the addictive and speculative nature of these platforms. In NIMHANS' (National Institute of Mental Health and Neuro-Sciences) SHUT(Service for Healthy Use of Technology) Clinic in Bengaluru, a technology addiction treatment center, weekly gaming addiction cases have surged five-fold from 3-4 patients in 2014 to 10-15 in 2025, with 90 new cases in 2024. A medical professional noted that students are equating fantasy gaming to their education in hopes that their continued usage will earn significant income and recover losses. This has created a dangerous pattern where most individuals are unable to acknowledge their obsession.

The entry fee of these apps is as low as ₹10 with Dream11 now shifting to "free-to-play" model after the recent ban. Complemented by flashy advertising and prize pools running into crores, it created an illusion of easy wins. However, 45 crore players collectively lost  ₹20,000 crore every year. The lower and middle-class users were disproportionately impacted by these losses as 65% of the revenue generated by fantasy games in IPL originated from smaller towns. The reward-based dopamine rush system inherent in these platforms created problematic addiction cycles as users started making larger bets in an attempt to make up for the losses incurred.

Economic Gain vs Social Cost:

The Promotion and Regulation of Online Gaming Act, 2025 effectively eliminated 95% of Dream11's revenue and mandated the platform to stop all paid contests. The new law imposes severe penalties with up to three years imprisonment and ₹1 crore fines for operators.

The industry is responsible for supporting over two lakh jobs and an annual tax revenue equating upto ₹20,000 crores. Cricketers and tournaments, especially the smaller ones, are also expected to face sponsorship gaps worth hundreds of crores as these platforms start pulling the plug. Digital advertising too will shrink by an estimated ₹8,000-10,000 crore annually, given the heavy contribution of fantasy gaming.

Yet these economic arguments must be weighed against the social costs. The government justified the ban by stating that online gambling was "destroying families and becoming a security threat". However, the ban has already started driving users to offshore betting sites using cryptocurrency or third-party wallets to bypass restrictions. As these platforms operate without regulatory safeguards, the risk of fraud, money laundering, and even greater addiction will continue to rise. In other words, a ban alone will not solve this deep-rooted problem but merely push it underground.

Esports: A Sustainable Alternative:

India's gaming future should focus on building avenues for legitimate esports and innovative gaming ecosystems. The new act specifically promotes esports and online social gaming while eliminating speculative and real money elements.

In contrast to fantasy games, esports requires genuine skill development, strategic thinking, and teamwork instead of sheer luck. It also opens new economic and employment avenues across sectors like game development, design, broadcasting, etc. India’s performance in international esports tournaments is already promising in titles like eFootball, Pokemon Go and VALORANT. A better support system for the industry can establish the nation as a global esports hub.

Building A Responsible Culture:

The burst of the fantasy gaming bubble has shed light on the broader challenge of managing emerging technologies. Despite the economic success of fantasy gaming, the exploitation of regulatory loopholes and normalisation of gambling behaviour has done more harm than good. India needs a shift from reactive policymaking to establishing regulatory guardrails that anticipate both opportunities and risks. The recent ban, though disruptive, is a chance to reset India’s gaming industry towards a more sustainable and constructive future.

As the gaming ecosystem continues to evolve, it will be critical to avoid growth that comes at the expense of social well-being. The real test is to ensure that policy efforts nurture an environment that rewards skill, creativity and long-term value creation and not fall into the mirage of quick gains.