The Real Money Gaming (RMG) Landscape in India: A Booming Industry Amid Regulatory Challenges

Real Money Gaming (RMG) has emerged as the dominant force in India's rapidly growing gaming ecosystem, accounting for 83-84% of the overall gaming revenue in FY22. This robust growth can be attributed to the country's increasing smartphone penetration, growing internet access, and a young, tech-savvy population.

As of 2024, the RMG sector has become a significant contributor to the economy and a major player in the entertainment space. However, despite its massive popularity and contribution, the sector faces regulatory challenges and varying legal frameworks across different states in India.

Current State of the RMG Market in India

The Indian gaming market is large and expanding, with over 100 million daily online gamers and 90 million paying users who engage in real money gaming platforms. These users are highly engaged, spending an average of 8.5 hours per week on gaming activities.

The popularity of fantasy sports, poker, rummy, and skill-based gaming apps has been a driving force behind this growth, especially platforms like Dream11, MyTeam11, MPL (Mobile Premier League), and PokerBaazi. These platforms dominate the RMG landscape, allowing players to compete in games of skill for real money.

As of FY22, the RMG sector alone accounted for around 83-84% of India’s total gaming revenue. Fantasy sports have emerged as the leader within this segment, with cricket, in particular, driving much of the engagement. Other skill-based games such as poker, rummy, and card games have also seen significant user bases, cementing RMG’s place in the broader gaming industry.

State-Specific Restrictions: A Fragmented Legal Landscape

One of the main challenges that the RMG sector faces in India is the state-by-state fragmentation of laws regarding online gaming and betting. While some states have embraced the real money gaming sector, others have imposed restrictions or outright bans, leading to a complex legal environment. Online betting and real money gaming are two distinct categories under Indian law, and this distinction is crucial for operators and every mobile game development company in the space.

Betting vs. Real Money Gaming:

Betting is typically seen as a game of chance, such as in the case of sports betting or traditional casino games. These activities are often regulated or banned in many states due to concerns about gambling addiction, fraud, and the risk of money laundering.

Real money gaming, on the other hand, is primarily based on skill. Games like fantasy sports, poker, and rummy require knowledge, strategy, and decision-making, which differentiates them from pure chance-based betting activities.

The distinction between these two types of gaming is significant because it allows skill-based gaming platforms to operate legally in many regions where betting might be banned. However, the ambiguity in how certain games are classified under state laws has led to frequent legal challenges and inconsistent enforcement across India.

State Restrictions and Legal Uncertainty:

Several states have enacted specific laws that either regulate or ban certain forms of online gaming or betting. For instance:

• Telangana and Andhra Pradesh have imposed outright bans on online gaming, including skill-based games like poker and rummy, claiming that they fall under the category of gambling.

• In Tamil Nadu, the government has attempted to regulate online gaming through a ban, though this has been challenged in court and remains under judicial review.

• Karnataka also imposed a ban on online gaming, with the state high court eventually striking it down, citing issues with the legality of such measures.
• At the same time, some states like Goa, Sikkim, and Nagaland have implemented licensing regimes for online gaming operators, providing a regulated environment for both skill-based and chance-based games. These states have moved toward creating frameworks that encourage operators to comply with certain standards while maintaining oversight.

This fragmented regulatory landscape has created legal uncertainty for operators in the sector, leading to challenges in terms of compliance and market entry. National regulation has been suggested as a potential solution to standardize the legal treatment of real money gaming across the country, but this remains an area of debate.

The Distinction Between Real Money Gaming and Gambling

A central point of contention in the regulatory debate is the distinction between real money gaming and gambling. The Indian law, particularly the Public Gambling Act of 1867, does not explicitly address online gaming and is primarily concerned with betting and gambling. This has led to confusion about how skill-based games should be classified.

Real money gaming platforms that offer fantasy sports, poker, rummy, or other skill-based games argue that these should be treated as games of skill, not chance. Several Indian courts have ruled in favor of the idea that games of skill (such as poker, rummy, and fantasy sports) are not gambling. These games require knowledge, strategic thinking, and decision-making, distinguishing them from games of pure chance like roulette or slot machines.

In contrast, betting on sports or casino games often falls under the category of games of chance and is considered gambling, which is illegal in many Indian states. The key legal distinction is crucial for real money gaming operators because games of skill are generally permissible in most states, while games of chance are either highly regulated or banned.

However, the regulatory environment remains ambiguous, and courts are still frequently asked to clarify whether certain games are games of skill or chance. Until a clearer national framework is established, operators will have to navigate the complex, state-specific landscape.

Looking Ahead: The Future of Real Money Gaming in India

Despite the regulatory challenges, the real money gaming sector in India is poised for continued growth. The market is expected to double by 2025, reaching over USD 5 billion in value. The ongoing expansion of internet access, mobile usage, and digital payment systems will continue to drive user engagement. Additionally, innovations such as gamification, personalized experiences, and the introduction of new formats like esports betting will keep the sector dynamic and competitive.

The need for clearer regulations and a national-level legal framework for online gaming will remain a priority. If India can create a consistent and predictable regulatory environment, the real money gaming sector has the potential to become a global leader in terms of both revenue and user engagement. However, until then, navigating state restrictions, managing tax burdens, and balancing skill vs. chance will remain significant challenges for the industry.

In conclusion, real money gaming in India is at a crossroads, facing both tremendous opportunity and considerable regulatory uncertainty. How the sector evolves will depend largely on the government's ability to reconcile the legal complexities surrounding gaming and betting, ensuring that the industry can continue to grow while maintaining fair and responsible practices.

Red Apple Technologies specializes in developing skill-based real-money games, adhering to all legal and industry-standard guidelines. Our team ensures compliance with the relevant regulations throughout the game development and platform services process.

As a leading game development agency, we prioritize transparency and integrity, providing clients with clear documentation on rules and regulations. Before releasing any project, we offer comprehensive Knowledge Transfer (KT) sessions to ensure clients fully understand the operational and legal aspects of the games.

Our focus is on delivering high-quality, secure, and engaging gaming experiences while maintaining a responsible approach to real-money gaming. We collaborate closely with clients to ensure that all necessary precautions and compliance measures are in place. At every stage of development, we emphasize best practices and user safety.

We remain committed to providing continuous support and updates to meet evolving industry standards.