The reasons cited in the bill for its RMG ban include the social, financial, psychological and public health harms of such games, particularly among young individuals and economically disadvantaged groups, apart from the risks of financial fraud and money laundering. The bill also notes the absence of a dedicated institutional and legal framework for the promotion of e-sports and social games in India.

Also Read: Regulate gaming by all means, but drop the plan to ban 'real-money games'

As expected, reactions are polarized. RMG players, employees, platform founders and investors in this industry are naturally anxious about the consequences. The state, on the other hand, has defended its decision, stressing that the public interest outweighs tax revenues or foreign investment flows. 

There are holes in this reasoning. For instance, India is nearly at net-zero foreign direct investment. So, it is puzzling that the state should clamp down on a field that's still attracting capital. It is worth noting that the Lok Sabha passed the bill without debate, while some Rajya Sabha members  wanted it sent to a select committee for examination.  

The real issue, though, lies elsewhere: in the gulf between India's governance apparatus and the society it governs. Policy in India is usually shaped by two kinds of inputs: what politicians hear from their constituents  and what the media reports. This creates two problems. 

The first relates to the fidelity of such feedback. Imagine yourself as a lawmaker. Citizens will rarely come to you with good news. They arrive with urgent needs: a job, hospital bed or relief from debt. You are unlikely to hear the positive aspects of digital services, whether these are linked to employment, productivity, skilling or technological capability building. 

The legislator's role is to discern the causes that underlie anecdotal evidence of societal distress, but in a country where one represents hundreds of thousands of citizens, if not millions, one cannot pay attention to details. 

Also Read: India's online gaming ban: Why take such a big legislative gamble?

There is another bias. Like courts, lawmakers are likely to pay more attention to gloom and doom stories around online RMG like indebtedness and suicides. However, such problems often run deeper, arising from pre-existing social or economic stress, with gambling-like behaviour just an outlet. Many bad outcomes can be traced to offshore operators that disregard all regulation. A blanket ban would achieve little here. URLs will resurface and grey market activity will thrive, just as it does in the case of other banned activities.

A better policy response is possible: enforce access controls and self-exclusion tools, require reporting of suspicious financial behaviour and mandate referral helplines to address RMG addiction. Entities that fail to comply could be penalized. Instead, by sweeping away all Indian RMG startups, the state risks creating a vacuum that offshore players will probably fill in an unending game of cat and mouse without private-sector allies. 

Beyond unrepresentative feedback, an equally glaring gap is the neglect of aggregate data-sets that could enable us to frame policy challenges more clearly. Too often, decisions are made without pausing to examine structured evidence that captures the scale, trajectory and trade-offs involved. Consider two data lenses: GST collections and employment potential.

Also Read: Gaming or Gambling? Young Indians are getting addicted to 'opinion trading', and losing huge sums

The government insists that tax revenues should not dictate policy. Fair enough. But the scale and growth of GST collections from RMG are striking. In the six months after the new GST regime for online gaming took effect (i.e., from October 2023 to March 2024), collections surged 412% from ₹1,349 crore to ₹6,909 crore. In 2024-25, these grew by over 200% to ₹20,000 crore, far outpacing the 10%-odd growth in overall GST revenues. RMG today contributes almost half as much GST as the 'sin' industry of tobacco products. 

Employment numbers, though smaller, are also significant. Direct and indirect employment by the RMG industry is estimated at around 200,000 people. What stands out is not just the scale, but the quality of its fiscal contribution. We estimate that this industry contributes roughly ₹10 lakh by way of direct taxes paid per employee, compared to about ₹1,70,000 for tobacco. As a young industry, RMG could expand employment and its tax contribution vastly if allowed to function.

Also Read: India must tackle illegal offshore gambling platforms

The problem of broken feedback loops with little attention paid to high-quality data extends beyond Parliament. The Supreme Court's recent directive on rounding up the national capital region's stray dogs is an example. Its stance seems to have leaned heavily on anecdotal reports of dog bites, amplified by media reports and petitions. Yet, there was little structured analysis: deaths from lightning strikes exceed those from rabies caused by dog bites; municipal shelters are overburdened; rabies vaccines are in short supply at most public health facilities; and crores are owed in dues to NGOs that shoulder the burden of animal birth control by Delhi's municipal authority. 

Without informed assessments, the state may continue to respond to the symptoms rather than causes of the problems we face. If India is to craft policies that respond to the diverse needs and aspirations of its society, it should revise the way it listens.