Mumbai: The Supreme Court on Thursday (December 11, 2025) briefly turned its attention to a foundational constitutional question: Was Parliament empowered to pass the Promotion and Regulation of Online Gaming Act, 2025, which imposes a sweeping ban on real-money online games, associated banking services, and advertising?
Constitutional Competence at the Centre of Dispute
The discussion unfolded when Chief Justice D.Y. Chandrachud raised whether online real-money gaming could legally be placed under the category of betting and gambling. If classified as such, the activity would fall under Entry 34 of the State List, placing exclusive legislative authority with the States—not the Union government.
The Chief Justice said the matter warrants a full, detailed hearing before a three-judge Bench in January 2026 to determine whether Parliament had acted “beyond its competence” in enacting the 2025 law.
Parallel Bench, Multiple Challenges
Senior advocates C.A. Sundaram and Arvind Datar, along with advocate Rohini Musa—appearing for online gaming firms—pointed out that another Bench led by Justice J.B. Pardiwala is already scrutinising challenges to both the central law and similar legislations passed by Tamil Nadu, Karnataka and other States. They informed the CJI that the competence of Parliament is also under examination before Justice Pardiwala’s Bench.
The gaming companies reiterated their request for an urgent stay on the implementation of the new Act.
“People have lost jobs. There is complete uncertainty,” they told the court, highlighting the economic impact of the abrupt ban.
Centre Urges Focus on Legislative Purpose, Not Just Power
Solicitor General Tushar Mehta countered that the court must look beyond the question of which legislature holds the pen and instead examine the intent behind the Union’s intervention.
The government argued that online real-money gaming presents a serious threat, asserting that platforms cannot claim a fundamental right to trade if the activity endangers human lives. According to the Centre, funds generated through such platforms have been linked to money laundering, terror financing vulnerabilities, addictive behaviour, tax evasion, and cross-border illicit flows.
Government data shows a sharp rise in outward remittances tied to online gaming, with over ₹5,700 crore flowing out of India in 2023–24, accompanied by widespread violations across the industry.
The Risk Framework Behind the 2025 Act
Justifying the need for the law, the Centre said the proliferation of online money games has harmed an estimated 45 crore individuals, collectively incurring losses exceeding ₹2,000 crore. The Act, it stated, is designed to curb the “serious risks” posed by these platforms to users, families and national security.
“There can be no right to profession or trade at the cost of human lives,” the government maintained, asserting that fatalities linked to online money gaming continue to rise across the country.
What Comes Next
The Supreme Court’s decision to escalate the matter to a three-judge Bench positions the case as a major constitutional test of federal powers and digital-economy regulation. With parallel challenges underway and businesses seeking urgent relief, the ruling will shape the future of India’s online gaming ecosystem, centre-state legislative boundaries, and the emerging framework governing digital financial risks.
