NEW DELHI: Three major online gaming industry bodies have written to the government, urging it to withdraw its proposed blanket ban on fantasy sports, online rummy, poker, and other real-money games. They warned the move would wipe out a legitimate sector that employs thousands and has attracted billions in investment.

The letter, addressed to Home Minister Amit Shah on Tuesday and written by Gameskraft-backed All India Gaming Federation (AIGF), Dream11-backed Federation of Indian Fantasy Sports (FIFS), and Games24x7-backed E-Gaming Federation (EGF), claimed that "a blanket prohibition would strike a death knell for the legitimate, job-creating industry, and would cause serious harm to Indian users and citizens."

Mint has seen a copy of the letter.

Roland Landers, chief executive of AIGF, said the sector is valued at over ₹2 trillion and, as of FY25, generated ₹31,000 crore in revenue while paying ₹20,000 crore in direct and indirect taxes. He added that India had 500 million people using online gaming services as of last fiscal year, and until mid-2022, startups had attracted foreign investments of over ₹25,000 crore.

"Thousands of startups, engineers and content creators rely on this ecosystem. The proposed ban would not only kill these opportunities but also deter investment and investor sentiment, destroy over 200,000 jobs, and result in 400 companies shutting down," Landers said.

The pushback follows the Union cabinet's approval for a bill to outlaw online real-money gaming platforms. The Promotion and Regulation of Online Gaming Bill, 2025, is being tabled in Parliament today. If passed, operators could face up to three years in jail or fines of up to ₹10 lakh.

The Bill seeks a complete ban on the operation of online gaming startups that require users to play with real money, as well as criminal and financial penalties for those enabling payments on such apps, including banks, and those advertising their services. Notable public figures such as athletes and actors have over time appeared as ambassadors to the likes of Dream11, Gameskraft's Rummyculture, Games24x7's My11Circle, and more.

Queries sent to Dream11 did not receive responses until press time. Gameskraft and Games24x7 which operate RummyCulture and My11Circle respectively also did not respond to requests for comments.

In FY24, the top four startups—Sporta Technologies (Dream11), Gameskraft, Games24x7 and Galactus Funware (Mobile Premier League)—reported nearly ₹13,000 crore in collective revenue. As of FY24, the online gaming industry had collectively paid $948 million ( ₹8,258 crore), according to finance minister Nirmala Sitharaman.

From October 2023, the goods and services tax (GST) rate on real-money games was raised to 28%, which companies say has already squeezed growth.

In March this year, when the Supreme Court began hearing appeals by the gaming industry, the cumulative retrospective GST demand from the sector was nearly ₹2 trillion for six fiscal years between FY17 and FY22.

Amid this, the Ministry of Electronics and Information Technology (Meity), along with the Ministry of Home Affairs (MHA), on Monday, circulated a Bill that claimed that the online gaming industry led to the proliferation of money laundering and financial fraud operations, and also impacted the mental health of people.

"Individuals have fallen victim to financial losses… sometimes resulting in extreme outcomes. Players are lured into a cycle with little awareness of risks or legal protections. These platforms frequently employ predatory monetization tactics… and reward systems designed to exploit psychological triggers to increase spending," the Bill said.

Mint has seen a copy of the Bill.

A senior lawyer closely associated with the industry's letter to home minister Shah told Mint that "by all likelihood, the industry is still staring at a sudden and unfair end."

"Unless the Bill gets recommended to a select or standing committee in Parliament, there is little hope of any recourse being implemented. India's online gaming sector will draw to a close, and there was little to no industry consultation done—something that may have given the government answers, and a chance for the startups to work closely with them," the lawyer added.