The notification of the Promotion and Regulation of Online Gaming Rules, 2026 has been broadly welcomed by India’s esports and gaming industry, with stakeholders saying the framework brings long-awaited clarity while also flagging key gaps that still need to be addressed.

The rules, which come into force on May 1, 2026, create a formal regulatory architecture under the Promotion and Regulation of Online Gaming (PROG) Act, 2025. Under the new framework, the Online Gaming Authority of India will be set up as a digital-first regulator. The Rules also introduce a time-bound 90-day determination process to classify games as online money games or permissible social games and esports and mandate registration only for notified categories and all esports titles.

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The rules further require platforms to implement user safety features such as age-gating, time limits, and grievance redressal systems, while setting up a two-tier appeals mechanism and prescribing penalties for non-compliance.

Esports gets a clear legal identity

Industry leaders said the rules clearly distinguish esports from online money gaming, a move seen as critical to building trust and unlocking long-term investment in the sector.

Akshat Rathee, co-founder and Managing Director of NODWIN Gaming, said the framework introduces much-needed structure to a rapidly evolving ecosystem. “The enactment of the PROG Act, 2025 brings much-needed clarity and structure to India’s esports ecosystem. The provision for formal registration of titles as esports by publishers is a particularly welcome move, as it eliminates the risk of misrepresentation and prevents proxy real-money platforms from self-declaring themselves as esports,” he said.

He added that the prescribed 90-day determination process strikes a balance between regulatory scrutiny and certainty for industry participants. 

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“For players, teams, tournament operators, broadcasters, sponsors, and other ecosystem participants, this creates a clear signal: once registered, an esport is unequivocally recognised as a legitimate sporting discipline,” Rathee said.

Rathee also highlighted the importance of explicitly excluding online money games from esports classification. “The explicit exclusion of online money games from being classified as esports is another critical step. It removes ambiguity and reinforces that competitive gaming is a skill-driven pursuit independent of any wagering or monetary constructs,” he said.

Industry welcomes structure, seeks finer clarity

Echoing a similar sentiment, Animesh Agarwal, Co-founder and CEO of S8UL, said the framework allows esports organisations to plan with greater confidence. “The Promotion and Regulation of Online Gaming Act, 2025, is a positive step forward for Indian esports. It brings much-needed structure to the ecosystem and clearly separates esports from online money gaming, helping address long-standing confusion around the space,” he said.

However, Agarwal cautioned that regulatory clarity is still evolving, especially on financial and structural aspects. “Esports teams and players continue to face a lack of clarity on financial frameworks, with ongoing challenges in how banks differentiate between esports earnings and real money gaming. There is also no clear pathway today to formally register esports teams as entities within a defined structure,” he said.

He further pointed to the absence of comprehensive protections for players and organisations. “More importantly, players and organisations still lack comprehensive protections under a clear regulatory framework. Addressing these areas will be critical for the ecosystem to move from early structure to full legitimacy and long-term sustainability,” Agarwal added.

Boost for investor confidence and startups

From an industry ecosystem perspective, stakeholders said the rules could help boost investor confidence and global positioning.

Vishal Parekh, Chief Operating Officer at CyberPowerPC India, said the formal recognition of esports as a skill-based category could be a turning point. “The enactment of the Online Gaming Act 2025 is a landmark step towards bringing structure and accountability to India’s gaming ecosystem. By formally recognising esports as a distinct, skill-based category, it addresses long-standing misconceptions that have held the industry back,” he said.

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Parekh added that regulatory clarity could drive broader participation across stakeholders. “The introduction of clear guardrails and enforcement mechanisms will play a crucial role in building trust, not just among players and families, but also among global partners, brands and investors looking at India as a growth market,” he said.

Sagar Nair, Head of Incubation at Nazara-backed LVL Zero Incubator, said the framework removes a major overhang for founders. “The Promotion and Regulation of Online Gaming Act, 2025 is a pivotal moment for early-stage gaming startups in India. Clarity in regulation is one of the most critical enablers for innovation, and this framework helps remove long-standing ambiguity that founders have had to navigate,” he said.

He added that the clear separation between esports, social gaming and money gaming creates a more predictable environment. “For emerging startups, this is an opportunity to align with a more structured ecosystem, one that encourages creativity, responsible design, and long-term value creation,” Nair said.

While the industry has largely welcomed the rules, stakeholders indicated that the next phase will depend on how effectively the framework is implemented, particularly around financial clarity, player protections and institutional recognition of esports entities.