Online Gaming in India
Where the Industry Went Wrong

Sameer Kochhar
Reforms Historian and
Chairman, SKOCH Group

In Part I of my earlier article, I argued that India’s new Promotion and Regulation of Online Gaming Bill, 2025 risks taking a prohibitionist turn that could harm innovation, drive activity offshore, and bypass the federal balance of our Constitution. The mature alternative is regulation rooted in harm-prevention, cooperative federalism, and responsible innovation.

But if the Bill today has chosen prohibition over proportional regulation, we must also ask: how did the industry contribute to this outcome? It is tempting for players to lay the blame entirely at the government’s door. The truth, however, is more complex.

Misreading Federalism as a Burden

The first misstep was a push for central legislation at all costs. The industry lobbied for one national law, portraying state-level variation as an overhead that start-ups could not manage. In truth, our federal structure provides a safety valve. With 28 states, industry could have engaged with a mosaic of regulators, derisking itself by building cooperative models where possible and living with tighter rules in some states.

Instead, by demanding a central framework, the industry forced the issue into a binary: win one law or lose everything. This was a high-risk bet—and it has not paid off. What was seen as a “roadblock” in federalism was actually a constitutional protection for freedom of trade. Had industry respected that diversity, it might not today be staring at a uniform national prohibition on money games.

Fighting the States in Court

The second mistake was challenging state legislative competence. When states like Tamil Nadu enacted their own regulation of online gaming, industry associations rushed to court, arguing that states lacked jurisdiction.

The matter remains sub judice, but the political fallout is already clear. By questioning state powers, the industry alienated state governments at precisely the moment when it needed their trust. Far from winning allies, it created adversaries. States that might have experimented with tailored, lighter-touch regulation instead now feel vindicated in calling for outright bans.

This legal aggression also undermined one of the strongest arguments in favour of a flexible framework: that states are best positioned to respond to public health and order concerns. The courts themselves have acknowledged this, but industry chose litigation over negotiation.

Repeating the Crypto Playbook

The third error was rehashing the same playbook that failed during the crypto debacle. The same set of players, lobbyists, and advisors resurfaced in online gaming—deploying the same tactics of over-promising, under-disclosing, and betting on high-decibel campaigns rather than serious engagement.

The lesson of crypto was clear: confrontational postures and exaggerated claims of innovation only deepen scepticism. Yet the gaming industry walked down the same path, ignoring the need for humility and credible self-regulation.

By recycling the old ecosystem without introspection, the industry invited regulators to conclude that it had not learned from past mistakes.

Watered-Down Responsibility Guidelines

The fourth misstep was the half-hearted approach to responsibility. When the government and civil society raised legitimate questions about addiction, mental health, and user protection, industry bodies produced a set of guidelines that were superficial at best.

These “responsibility codes” lacked teeth: no enforceable parental controls, no independent audits, no meaningful harm-prevention mechanisms. Worse, they were packaged as a “national consensus”, as though consumer needs had been squarely addressed.

The result was predictable: the guidelines were dismissed as an exercise in public relations rather than genuine reform. Instead of reassuring policymakers, they convinced them that industry was unwilling to regulate itself seriously.

Misplaced MoUs and Shortcuts

Fifth, the industry placed too much emphasis on short-term fixes like MoUs with advertising self-regulatory bodies. The intent was to show goodwill by voluntarily curbing irresponsible advertising. But in practice, these MoUs were toothless.

Advertising excesses continued: celebrity endorsements, misleading claims, and campaigns that targeted vulnerable users. For policymakers, this only underscored the gap between industry’s rhetoric and reality.

A voluntary MoU was no substitute for a credible, independently monitored code of conduct.

Garrulous and Litigious Behaviour

The sixth failing was the garrulous and litigious posture adopted by many players. Instead of quiet, constructive engagement, the industry flooded the policy space with aggressive lobbying, public sparring, and constant litigation.

This not only distracted from the real issues but also alienated potential allies in government, media, and civil society. A more restrained, solutions-oriented dialogue could have built credibility. Instead, the industry came across as combative and unwilling to compromise.

In policymaking, tone matters. By making too many adversaries, the industry weakened its own case.

High-Decibel Advertising and Influencer Hype

Finally, the industry invited a backlash through loud advertising and influencer campaigns. Television spots, celebrity endorsements, and social-media blitzes glamorised real-money gaming.

What may have been intended as market expansion quickly became political ammunition. Families, educators, and public-health advocates were confronted with an industry that appeared to be targeting youth and normalising gambling behaviour.

Once this perception set in, the battle for trust was lost. Instead of being seen as part of the creative economy, online gaming was painted as a social menace.

The Result: A Target on Its Back

Taken together, these missteps ensured that when the government finally moved, it moved hard. The Bill’s prohibitionist stance is not simply the product of official moralism. It is also a reaction to the industry’s own behaviour: its resistance to federalism, its hostility to states, its recycled crypto playbook, its shallow responsibility codes, its misplaced advertising blitz, and its confrontational tone.

In other words, the industry painted a target on its own back

What Could Have Been Done Differently

A different path was possible. The industry could have:

• Respected federalism : Engaging with states as partners rather than opponents.
• Accepted responsibility : Early, adopting serious, auditable harm-prevention codes.
• Invested in quiet diplomacy : Building allies in public health, consumer protection, and youth advocacy.
• Calibrated its advertising : Focusing on transparency and literacy rather than glamour and hype.
• Learned from crypto : By avoiding inflated promises and adversarial lobbying.

Had this path been taken, the narrative today might have been different. Instead of prohibition, we could have been debating risk-based licensing, cooperative regulation, and corporate digital responsibility.

Towards a More Constructive Future

The lesson of Part II is sobering but important: regulation is not made in a vacuum. Governments respond not only to social harm but also to the way industries conduct themselves. By failing to take responsibility and by alienating its natural regulators, the gaming industry narrowed its own options.

Going forward, it is still possible to course-correct. Industry leaders must:

1. Rebuild credibility with serious responsibility codes that go beyond rhetoric.
2. Work with states instead of against them, recognising their constitutional role.
3. Reduce the volume of advertising and focus on user literacy and safeguards.
4. Embrace audited compliance and transparency dashboards that regulators and consumers alike can trust.

Only then will policymakers be willing to revisit the present prohibitionist stance.

Conclusion

In Part I, I argued for regulation over prohibition. In Part II, I have sought to show why prohibition became the government’s preferred choice: not only because of genuine harms, but because of the industry’s own strategic missteps.

It is a hard truth, but one that must be faced. If online gaming in India is to have a sustainable future, the industry must first look inward, acknowledge its mistakes, and commit to rebuilding trust.

Only then will the path open for a regulatory framework that is balanced, proportionate, and future-ready.