taken the prohibitionist route, arguing that any game involving monetary stakes—even if it requires considerable skill—can push vulnerable groups into addiction, debt, and in extreme cases, self-harm. Their arguments cite tragic incidents: teenagers taking their own lives after incurring gaming losses, families falling into debt traps, and minors illegally accessing real-money platforms using their parents’ credentials. These examples cannot be ignored, especially in a country where digital literacy often lags far behind digital accessibility.

But this is only one side of the story. The industry, and indeed many legal scholars, argue that the states’ sweeping bans conflate skill-based gaming with gambling, a distinction the Supreme Court itself has repeatedly drawn—from R.M.D. Chamarbaugwala to K.R. Lakshmanan v. State of Tamil Nadu. In 2023, the Union government went a step further, formally recognising “online games of skill” under the IT Rules, bringing them within a central regulatory framework to ensure uniformity. That framework introduced mandatory KYC, grievance redressal, periodic audits, and clear disclosures—hardly the hallmarks of an unregulated industry. Yet the absence of a single national law has meant that states continue to impose their own, often contradictory, bans and restrictions.

This legal puzzle has consequences. The sector was already reeling from the sudden GST hike last year, classifying online real-money gaming under the highest 28% slab. Many startups that once rode the wave of India’s digital boom have since frozen expansions, laid off employees, and postponed investments. Venture capital inflows have shrunk dramatically. After the latest hearing, the nervousness is visible: founders wonder if they should relocate to Dubai or Singapore, where regulations are clearer and more predictable. For a country that proudly markets itself as a global tech innovation hub, such regulatory unpredictability is a self-inflicted wound.

Yet, acknowledging the economic potential must not blind us to an undeniable reality: India is facing a surge in gaming addiction. The WHO’s classification of “gaming disorder” is a warning the country cannot afford to brush aside. The demographic most at risk—teenagers and young adults—has the least capacity for self-regulation. And India’s mental health infrastructure is too understaffed and underfunded to absorb the fallout.

The solution, however, is not prohibition. Prohibition drives behaviour underground; regulation channels it responsibly. India needs a calibrated, transparent, India-specific regulatory model—one that recognises both the risks and the economic possibilities. Mandatory age-gating, daily loss limits, algorithmic transparency, addiction-warning prompts, and strict restrictions on credit-based play can significantly reduce harm. At the same time, platforms must be compelled to adopt ethical design and stop predatory marketing that targets vulnerable users.

The Supreme Court’s eventual decision will shape the trajectory of India’s digital future. It can either affirm a modern, rational regulatory vision that protects users without stifling innovation, or it can push the industry into decline, opening the door to unregulated offshore and illegal markets.

India, with its 500 million gamers, cannot afford to take the easy route of blanket bans. The challenge before the Court—and the country—is to regulate with clarity, not fear; with evidence, not knee-jerk moral outrage. The future of a sunrise industry, and the livelihoods it supports, hangs in the balance.