After Karnataka and Delhi, the High Court of Madhya Pradesh also rejected the request of online gaming companies to suspend new regulations on Tuesday, becoming the third high court to explicitly support the central government's stance. This means that the "2025 Online Gaming Promotion and Regulation Act" promulgated by the Indian government will continue to be implemented unimpeded in the short term. The core provision of the act is a comprehensive ban on online games involving monetary transactions within the territory.
Setback for Gaming Companies
The division bench of the Jabalpur High Court of Madhya Pradesh, presided over by Chief Justice Sanjeev Sachdeva, dismissed the appeal filed by Clubboom11 Sports & Entertainment. The company, registered in Gwalior two years ago, claimed that the law had "constitutional defects" and was represented by senior advocate Gopal Jain. Jain argued that fantasy sports and similar platforms are "constitutionally protected activities" and cited amendments to the Information Technology Act, emphasizing that the central government had previously regulated the industry as a compliant legal entity.
However, the court did not accept this argument. The Attorney General of India, Tushar Mehta, also pointed out that similar cases were being heard in Karnataka and Delhi, suggesting that related appeals be directly consolidated and submitted to the Supreme Court, rather than being adjudicated separately by local courts.
Firm Stance of the Government
Mehta revealed in court that the Ministry of Electronics and Information Technology (MeitY) will soon establish a dedicated agency to promote esports and casual games that do not involve money, while ensuring the implementation of the new law. Meanwhile, the Delhi High Court just rejected a similar lawsuit by Bagheera Carrom OPC Pvt. Ltd. on Tuesday, showing a consistent judicial support for the act.
The central government's policy advancement is extremely fast—it was approved by the cabinet and passed as law within just five days. The Minister for Electronics and Information Technology, Ashwini Vaishnaw, stated that this decision was based on years of research and thousands of pieces of evidence, showing that platforms like Dream11, RummyCulture, My11Circle, and MPL not only cause addiction but also involve money laundering activities.
Impact on the Industry
The new law's impact has quickly spread within the industry. Games24x7, Mobile Premier League (MPL), and Baazi Games have announced layoffs, with more companies expected to follow. Industry organizations wrote to the Minister of Home Affairs, Amit Shah, on the day the act was passed, warning that the ban could severely damage over 400 companies and result in the loss of more than 200,000 jobs.
At the same time, the market has also experienced turbulence. Nazara Technologies' stock price plummeted after the announcement, intensifying investor concerns about the industry's future.
The Secretary-General of the Ministry of Finance, S. Krishnan, explicitly stated last month that the government "strictly followed constitutional procedures in enacting the law" and is ready to face all legal challenges.
Background: Tax and Compliance Issues
Before the ban was implemented, India's money gambling industry was already in trouble due to Goods and Services Tax (GST) issues, with the government reclaiming more than 23 billion Australian dollars. After the new law is implemented, nearly 95% of the industry's revenue sources will be cut off, making the transition extremely difficult.
As multiple courts continue to refuse to suspend the implementation, the new law's advancement in the judicial and administrative levels has entered a stable phase. The next step, whether the Supreme Court will accept the consolidated appeals, will become the industry's final critical point of contention.
