He explained that while states can regulate trade and commerce within their boundaries, issues involving interstate and overseas transactions fall under the jurisdiction of the Union government, giving it the competence to legislate in this area. According to him, this clarity has also been upheld by judicial pronouncements.
Krishnan stressed that the bill should not be seen only as a prohibition but also as a promotional measure, as it distinguishes money games from legitimate areas like esports, social and educational games, and the broader AVGC sector. These, he said, will be supported and developed as part of the government’s commitment to promoting India’s creative and software capabilities.
This is the edited excerpt of the interview.
Q: This came as bolt of the blue for industry as well as for state government the Online Gaming Bill, 2025 that now has been tabled in Parliament. In fact, both industry as well as states, asking the question that there has been no consultation that has taken place, why did the government feel the need to bring this bill in and provide a blanket ban on all money games, as far as online games are concerned? Because this is contrary to what your own ministry was attempting to do, which was to drive regulation and not prohibition. Why the decision to go in for prohibition, what changed?
You need to look at the whole context of the bill. It would not be fair to look at it only as a prohibition effort. There is a significant element there, which is promotional. One thing that the industry has been asking repeatedly is a clear delineation and a clear identification of those parts of the industry which are legitimate businesses, which are creative, which involve a lot of technical skill, and which involve development of software and all of those skills connected with it. So there’s a clear recognition of those segments of the industry, which includes esports and online social games, which includes both recreational games and educational games, the entire gamification industry, the entire AVGC (Animation, Visual Effects, Gaming, Comics) segment, as it’s called, which are distinct elements and which are being supported and promoted through this particular bill. That regulatory distinction is being clearly made, which is what the industry wanted.
Now, as far as the segment which relates to online money games, this has been a problematic segment for quite some time now, and there has been a lot of back and forth, and also a lot of issues in various courts across the country on how exactly this issue requires to be tackled. There have been litigation, there have been various kinds of debate as to who is competent to handle this, and especially when it is online and it functions across states and also comes from overseas, whether states would really be able to regulate this, would the states actually be able to legislate and administer the regulation relating to this have all been concerns.
Many states have attempted to do this in multiple ways. Many of those legislations have been mired in legal conflict in different courts. Primarily because of issues such as this – in terms of legislative competence and so on. We believe that the courts have now given some clarity, here are legal pronouncements which have given clarity, which say that even if it’s a game of skill or a game of chance, ultimately it amounts to trade and commerce, and within a state, a state government can regulate this as trade and commerce within the state.
Now the problem starts when it becomes an interstate issue, or a cross border issue from overseas. Then the competence for legislating on that really vests with the Government of India and under list one of the Schedule VII of the Constitution, item 41 and 42 which cover interstate trade and cross border trade. So that is the basis on which we derive the legislative competence to legislate in this area and that is the basis on which this is being done.
The industry has represented a number of times on this issue, their concerns and all that they have had to say has been well reflected. They have indicated what they mean. One part of it, of course, was the regulatory clarity. Another part, of course, as you point out, is an approach towards regulating, as opposed to restricting.
Now under the Constitution, under Article 19, clause 6, which talks about the reasonable restrictions which can be placed in the general public interest on trade and commerce – we understand that the Supreme Court has held in various other cases in the past that a complete prohibition or a complete ban also amounts to a reasonable, reasonable restriction in certain cases. It is important to recognise that this is what is reasonable, varies from circumstance to circumstance, and it is in the government’s judgement. The way that discussions have taken place at the government level and in various parliamentary standing committees. There was consensus across the board that online money gaming needed to be acted against, and that is what is reflected in the bill.
One an impetus to promoting those segments which will be deemed to be legitimate, and supporting them where there is considerable potential for Indian software prowess to grow and development prowess to grow. And that is something that the government is committed to support. We have already done the National Institute of Creative Technology, which has to come up in Mumbai, there are other efforts to promote this, including the WAVES Summit, which was held all of that will be continued and will be redoubled, and more will be done to promote that segment to the industry.
This segment is what causes distress, by the industry’s own admission, about 450 million people across the country play various kinds of online money games, and various parliamentarians and others cutting across party lines have indicated at different points to us in different fora’s that it is an area of serious concern, and the government and the Ministry of Electronics and Information Technology need to act in this space, and that is what the government has done.
I do not expect that they would be much objection, at least from across the political spectrum, or even from state governments, that this is a this is an exercise of power which has been done without consulting them. This is very much within the government of India’s remit, and I think we have acted in a way that many state governments have wanted to and tried to act, but have been unable to, due to various legal challenges.
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Q: On the point that you made that you believe the central government is legally competent to bring in this legislation overriding what states may or may not choose to do because of the interstate transactions. But let us talk about the overseas transactions, because one of the arguments being made by industry is that this will actually push people who indulge in online gaming to operate with fly by night operators, with people who are operating outside of the jurisdiction of India. What can the centre do about that?
To be honest, the jurisdiction of the bill, in a sense, has an extra-territorial jurisdiction. It applies to entities outside the country who are offering it in India. That is their right in section 1 of the bill itself. So in that sense, it has limited extra-territorial jurisdiction that is point one. Point two is that we have in the past and MeitY itself has blocked almost 1,524 cases where illegal betting, gambling, and online money gaming sites have been operating, and against those, we have taken action and blocked them in the past.
That provision has also been made in this act that section 69A of the Information Technology Act 2000 can be used to block online money gaming, which comes whether it is within the country or from overseas. So technologically it is possible to block this. Of course, it will be a constant exercise and vigilance. We will have to keep monitoring when these games come up, and we have the capability to do that, and as and when it comes up, we will have to keep consistently blocking new sites which come up, new portals which come up, new ways in which it gets offered. Now that is an implementation challenge, and that is what the civil service and the entire machinery of government is there for. We have to implement the law which the Parliament would enact.
Q: Yes, it is going to be an implementation challenge, as you acknowledge there, Mr. Krishnan. But you know, I go back again to the arguments that are coming in from industry—that this once again raises the issue of policy unpredictability, because this again was a sector that the government itself has been championing. There’s about $3 billion that has come in terms of FDI. Industry claims that direct and indirect jobs amount to about two lakh at this point in time. I would imagine that these were considerations that were factored in as part of the consultation process that took place. Now, what do you say in response to that—that this is going to lead to job losses, that this is going to lead to uncertainty as far as foreign investors and domestic investors are concerned, who have already put in money into this sector and were hoping to be able to do a lot more? This is another retrospective action on the part of the government. How do you respond to those questions that are being raised by industry and other investors?
So, let me address the issue of job losses first. I think what you have to weigh here is the number of jobs created are in the thousands, and the number of livelihoods affected are in their hundreds of millions. The industry itself claims that 450 million people play these games, many of whom are distressed, and I think parliamentarians, ministers and others who understand the distress of their constituents are very forthright in saying that this is a serious issue. So, we have to balance.
We have to balance between what is in the overall social good. And many of these people have talent and will find jobs in the legitimate gaming sector, which is being encouraged. So, I think that is an issue which we should be able to tackle in terms of the job loss prospect itself. So, I would not say that that is as big an argument. And it has been considered. It was something which came up. And I think clearly this view was taken that we need to look at it from the perspective of the livelihoods and the emotional and mental welfare and the social distress that is caused for many millions more. So that is as far as the job losses are concerned.
Coming to the investment-related issue. I think we also need to be clear that it is the industry which asked for this clarity as to what would be permissible and what would not be permissible. So, I think that clarity has been provided.
Q: Industry was asking for clarity on the kind of regulatory framework that the government would put in. Industry was not saying, bring in a blanket ban to disallow any kind of online money games. In fact, that was not the position that MeitY itself had taken in the previous set of consultations, as well as the regulatory mechanism that MeitY itself had put forward.
I understand you’re referring to the amendments to the IT Rules made in April 2023. You would note that although the amendments were made in April 2023, Rule 4B indicated that until such time that the government approves the creation of the self-regulatory bodies, this particular set of rules would not come into force. And the government had a rethink on this issue, and it never approved any of the SRBs. So, maybe there was a regulatory framework which was created in a particular form. The government has stepped back from that regulatory framework after reconsideration and finding that there were a number of issues and problems there.
And the regulatory clarity that the industry asked for was a clear delineation of the industry to recognise what was permissible, what is acceptable, what will be promoted, and what is problematic, and what would need to be restricted in some form. And that clarity has been given.
Of course, it could be argued that there could be regulatory measures which could have been tried of other kinds, whereas the option now has been for an outright ban. That is a call which needed to be taken in terms of the implementability of many of the regulatory restrictions which could have been attempted, as opposed to making sure that such games are not offered at all.
And the balance of convenience, the government believes, is in making sure that such games are not offered at all, as opposed to having certain regulatory mechanisms to prevent this. Now, these are choices which are made by different societies in different ways. In the Indian context itself, there are many things which are permissible, or which are going on in online money gaming today, which are not permissible in the physical form or in the real world.
We are a country which does not allow casinos across most states. We are a country where many states are attempting to ban this as betting and gambling, and not succeeding because people claim that there is an element of skill involved, and it is not purely a game of chance. Now we are saying that it does not matter whether it is chance, whether it is skill, or a combination of both. All of them, where any wagering, any deposit, any fees are paid in the expectation that you will win back more, you will get back more, or you will get back that amount—that is something which is defined as an online money game, and hence not permissible.
Now, this is a societal decision. Whether we permit casinos, whether we permit other forms of gaming, is a societal decision. And in the Indian context, the political executive is clearly of the view that this is something which is difficult to permit. And the political executive—not just here, but many states have attempted to ban this, as well as we already discussed—are caught up in legal tangles in terms of the competence of state governments to enact, and we believe that the legal competence is there for the Government of India. And this is a clear delineation which has to be made. There’s a segment which is to be promoted—we have no doubts about that, we are defining it clearly and making sure that we have measures to promote that. And there’s another segment which needs to be prohibited, simply because the livelihoods of a very large number of people of this country are involved, and we need to put that before any investment or any employment is created in that sector. Clearly, the investment is coming in because the returns are outsized in that particular sector. The returns are outsized and it is actually thriving on the distress of these people.
What kind of investments we accept and what kind of investments we don’t accept is there in our FDI policy. We don’t accept every kind of FDI in every case. If there is a criminal activity but it fetches very high returns, then naturally, you’re not going to take FDI in that sector.
Q: Fair enough, as you point out, this is a decision taken by the political establishment, and some of these factors, as we pointed out and discussed—the concerns that industry has raised—have already been weighed. Another consideration, though, that perhaps was part of the consultation process, is the loss of revenue. Because, as of last fiscal, the total collection was about ₹20,000 crore. The expectation was that with the revamped GST, this would go under the 40% bracket. So, was the revenue consideration, like the job loss consideration, also a factor that was discussed?
The finance ministry was also consulted, and they seemed to be comfortable with it. They believed that this is a revenue loss they can live with, given the larger social good that is being served. Therefore, I think that did not weigh as much as the overall social considerations.
Q: What next now, as far as this regulatory authority is concerned, the plan that you hope to create? Can you take us through what the process will now be? Who will be part of this regulatory authority? If you can lay out the next steps now for us, as and when this does get passed by Parliament—it’s been tabled this morning.
We’ll first have to, of course, wait for the passage of the bill and the assent of the President. In parallel, we’ll have to work on putting in place the rest of the framework, including the rules that will govern how the regulatory authority would be constituted and what powers they have. That is something on which we have already commenced work. Once this is to be put in place, I think we will be acting very rapidly to make sure that the notification comes out quickly and we are able to implement this entire framework as soon as possible.
As I already pointed out, some technological upgradation would also be required, not just in MeitY but across ministries, and also the promotional elements which need to be done. These will be handled by the Ministry of I&B, the Department of Sports and the Ministry of Youth Affairs and Sports. All of them will get ready with the kinds of schemes and other aspects that they need to implement. So, we have work to do. We recognise that there is work to be done, and we will get it done.
Q: On the tech upgradation that you believe you will need to do, I would imagine this links back to some of the execution challenges that you yourself acknowledged. How soon—of course, you know the procedural aspects of the legislation will take their time—but how soon do you believe this is going to go into implementation? By when can we expect this to be implemented?
I can’t give you a specific date until such time as the assented bill is with us, so I would not hazard a guess. But I think it needs to be pretty quick, because we are responding to distress. The bill itself has been brought in with considerable expedition, so we will have to display the same expedition to bring it into effect.
Q: Provision 17 provides a blanket legal cover to the government and the regulator. Why is that the case?
Acts in good faith are always protected. So, they are only protected if they are acts in good faith. Administrative actions can be challenged under law in a number of ways. This is for acts in good faith which will not become punishable. Now, it doesn’t mean that there will be no judicial review of those actions. Under the law, judicial review is possible and they can be questioned, but if it is proved that it was an act in good faith by a civil servant in furtherance of the objectives of this Act, then they would not be punishable. That is what it basically means.
Q: Finally, crypto transactions, again as you talk about the implementation challenges of trying to crack down of operators who operate outside of India’s jurisdictions. What about crypto transactions? Because the bill makes it clear that banks, financial institutions cannot fund these transactions. But what about crypto transactions?
Currently what is permissible as crypto transactions in India are basically the transactions themselves. When you take money out of a wallet, you have to transact in INR, in Indian rupees. The wallets can transfer crypto in and out, but if you are taking money out, or if you are putting money in, then that needs to be through an INR transaction. So wherever there are legitimate crypto wallets which are currently operating, since there is a linkage directly to Indian money, which will enable us to track what is a exactly happening, and there again, the proceeds of such games cannot come in.
Now what is illegally happening, what is happening in the dark net, or through the virtual private networks, VPNs, we will have to find technological means to come down on them as we go along. We have already come down on them in a number of ways. We track them down. It is a constant exercise, this is what you need policing for in any society. When you declare something to be a crime, there has to be a mechanism to enforce, and that mechanism to enforce is being built up even as we speak. Because, within our overall cyber security framework, within our overall framework of laws, and that technical capacity is being built both in MeitY and in other ministries, in the ministry of telecom and otherwise, to protect Indian cyberspace. So, that will also come in useful to address these challenges,
Q: Any recourse at all for industry, because they have written a letter to the home minister last night, the All India Gaming Federation seeking urgent intervention. Now, of course, the bill in Parliament, but any recourse at all for those who are in the online money gaming business?
We are prepared to talk to them at any point in time. We are open, if there is a representation to be made, the ministry is always open to speaking with people who are affected by its actions or who want to come and discuss their issues with us. So, the doors are open for discussion.
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