India’s RMG Ban: The Rise, the Rupture, and the Reckoning
In the span of a decade, India’s real-money gaming (RMG) industry went from being one of the country’s fastest-growing consumer internet bets to being wiped out by the stroke of a pen. The ban, formalised in August 2025 through the Promotion and Regulation of Online Gaming Bill, was as abrupt as it was sweeping. For an industry once worth USD 23 billion, with household names like Dream11, MPL, and Hike leading the charge, the curtain fell overnight.
But how did we get here? To understand the implications, it’s worth stepping back to trace the rise of RMG, the psychology it tapped into, the regulatory dance it engaged in, and what this ban signals for startups, investors, and consumers.
The Boom: How RMG Took Root
The story begins in the mid-2010s, when cheap data and smartphones collided with India’s obsession with cricket and card games. Startups like Dream11 gamified cricket fandom through fantasy sports, while poker and rummy platforms leaned on the “game of skill” legal shield. By the late 2010s, over 400 startups had sprung up, and venture giants like Tiger Global, SoftBank, and Tencent were writing big checks.
The market wasn’t niche anymore. Dream11 became the Indian cricket team’s jersey sponsor; Mobile Premier League (MPL) ran ads with Virat Kohli; Hike pivoted from messaging to gaming and built a USD 500M revenue business in four years. For a generation of mobile-first Indians, playing RMGs wasn’t shady gambling, it was skill, entertainment, and aspiration wrapped in a glossy app interface.
The Consumer Hook: More Than Just Games
RMG’s virality was psychological. The entry barrier was low; INR 50 was enough to get started. The promise was high: skill plus a bit of luck could earn you a windfall. For many, it wasn’t just about money but the thrill of having skin in the game, whether that was your fantasy cricket XI or a late-night rummy session.
Marketing reinforced this narrative. “Play smart, win big” became a mantra, amplified by celebrities and sports leagues. By FY24, 155 million Indians were playing RMGs, making up more than 75% of online gaming revenue.
But beneath the glamour were cautionary tales: addiction spirals, families burdened by debt, even tragic suicides. These stories began shaping public perception and eventually, policy sentiment.
The Regulatory Dance
RMG lived in a grey zone. Courts held that skill-based games weren’t gambling, allowing startups to operate legally. But state governments weren’t convinced. Tamil Nadu, Kerala, and Andhra Pradesh attempted bans, often overturned on appeal.
In 2023, the Centre introduced a 28% GST on entry fees, a clear sign the tide was turning. The tax squeezed unit economics, but companies still pressed ahead, betting that lobbying and self-regulation would buy them time.
What they underestimated was the political optics: mounting public pressure, tragic headlines, and a narrative of “youth being ruined by gambling apps.” By August 2025, the government went for a blanket ban on “all deposit-based online games,” carving out only esports and casual social play.
The Rupture: An Industry Wiped Out
The fallout was immediate. Dream11 froze contests and lost 95% of revenue overnight. MPL cut 60% of its workforce. Hike’s founder Kavin Bharti Mittal chose to shut shop entirely, calling a restart “not the best use of capital.” In weeks, 2,000+ job losses were reported, and investors were left nursing heavy markdowns.
For users, the ban meant sudden withdrawal from apps that had become daily rituals. Some drifted back to casual gaming, but a chunk inevitably migrated to offshore betting platforms, a reminder that prohibition rarely eliminates demand, it just shifts it underground.
The Reckoning: What Next?
For startups and investors, the RMG saga is a sobering lesson in regulatory risk. A sector once hailed as India’s next internet export story was extinguished by policy in a matter of days. It underlines how quickly the state can redraw the lines for “vice industries”, be it gaming, crypto, or even fintech lending.
Some founders are already pivoting. WinZO launched “WinZO TV”, a content and subscription play. Dream Sports is exploring fintech with Dream Money. Others are eyeing overseas markets, hoping to transplant their know-how to friendlier regimes.
For policymakers, the question is whether prohibition works. Models from Kerala’s state lottery or the UK’s regulated gambling industry suggest alternatives where oversight and taxation coexist with consumer protection. For now, India has chosen the hard stop.
The RMG ban isn’t just about gaming, it’s a parable of India’s startup landscape. Industries can rise spectacularly on consumer demand and investor capital, but unless they build legitimacy, they remain fragile. The reckoning will last much longer: for entrepreneurs recalibrating their bets, for investors adjusting their risk lenses, and for policymakers balancing morality with markets.
– Nankee Hari, Equanimity Investments