The Rs 444 question: Why India banned online money games

Hungama hai kyun barpaa thodi si jo pee li hai
Daakaa to nahi maara chori to nahi ki hai

– Akbar Allahabadi

On August 21, Parliament slammed the brakes on online money games by passing the Promotion and Regulation of Online Gaming Bill, 2025. The government’s press release made its intent clear: this law takes aim at predatory gaming platforms that fuel addiction, drain wallets, and sell the false dream of easy riches.

Further, the press release shared a very important data point quoting Ashwini Vaishnaw, the Union Minister for Electronics and Information Technology: “45 crore people are negatively affected by online money games and faced a loss of more than Rs 20,000 crores because of it.”

This raises two important points:

1) Forty-five crore individuals playing online money games is a huge number. According to the World Bank, India’s population in 2024 was 145 crore, so, on average, 31 out of every 100 Indians were playing this game. This leads to the question: Why are so many Indians playing these games

2) The estimate shared above suggests that 45 crore individuals faced a loss of Rs 20,000 crore. This implies an average loss of Rs 444 per individual, which isn’t really that much. So, why ban these games then? What’s all the hungama – for the lack of a better word – around the issue? Let’s try answering the second question first.

Identified lives versus statistical lives

The economist Thomas Schelling wrote an essay titled The Life You Save May Be Your Own, which was published in 1968. As he wrote: “Let a six-year-old girl with brown hair need thousands of dollars for an operation that will prolong her life until Christmas, and the post office will be swamped with nickels and dimes to save her. But let it be reported that without sales tax the hospital facilities of Massachusetts [a state in the United States] will deteriorate and cause a barely perceptible increase in preventable death – not many will drop a tear or reach for their cheque books.”

In this essay, Schelling explained ‘identified’ lives and ‘statistical’ lives. The six-year-old girl in the story was an identified life, whereas the hospital and the people admitted to it were statistical lives.

The point being that the world at large feels greater pain for the struggles of people whose faces they remember, whose stories they know – the identified lives – than others, the statistical ones.

So, how does this concept link with the ban on online money games? The government’s press release referred to earlier makes two points:

1) Addiction and financial ruin: Online money games encourage compulsive playing. Many players lose their entire savings chasing the illusion of quick profits. Families have been pushed into debt and distress.

2) Mental health and suicides: The stress of heavy financial loss has led to cases of depression and even suicide. The Bill seeks to prevent such tragedies by banning these exploitative platforms.
Basically, some individuals playing these games have become addicted to them, lost their entire savings chasing easy money, and have then come under severe mental stress.

Take a look at the following news reports.

A Times of India news report published in April 2025 points out that Telangana sees seven deaths linked to online betting every month.
In February 2025, The Indian Express reported on three members of a family dying by suicide in Mysuru, Karnataka, after facing a loss of Rs 80 lakh in online gaming.

In December 2024, the Indo-Asian News Service reported that over the past four years, 48 people have committed suicide in Tamil Nadu due to addiction to online betting apps and online loan fraud.

The media is full of news reports about individuals who played these games, lost large sums of money, fell into debt, and in some cases, took their own lives. These are the identified lives. 

In this scenario, people are talking about the negative impact of these games. It’s an everyday conversation happening all around. So, the government needs to be seen to be doing something about the issue, the identified lives, that is.

The political economy

The economic commentators in the media have talked about why the decision to ban online money games won’t turn out to be a fruitful one. Some of the major points made have been:

1) Human beings are inherently wired to gamble and take risks. The ban will simply move online money gaming underground; people will continue to play these games, and the government will lose out on tax revenues. The lobbies of gaming companies have argued that the government will lose out on Rs 20,000 crore of taxes.

2) It has been pointed out that these companies employ nearly two lakh individuals directly and that their lives will be disrupted.

3) The decision to ban online money gaming has also been called a policy shocker by some, given that investors, particularly venture capitalists, had invested a lot of money in these companies. With the ban, these investors will lose a lot of money unless these companies can quickly pivot to other viable business models.

Let’s get into these points in detail.

1) The ban might move a lot of gaming underground. It’s not that the government doesn’t understand this. But that’s a different problem for a different day. Right now, and as mentioned earlier, it’s important for the government to be seen to be doing something about this issue.
Also, the fact that some players may try to bypass the new system that emerges and continue playing these games, doesn’t mean that all 45 crore players will do so.

2) As far as employment is concerned, from what I understand, a good chunk of these employees work in technology and can move to other companies in other sectors. Of course, there will be job losses, but look at it from the point of view of 45 crore players versus 2 lakh employees. It’s a no-brainer for the government.

3) This is a very important point. Look at the sectors that have recently drawn the government’s wrath – cryptos, futures and options, online money games, rent-seeking edtech. A common thread runs through them: most were fuelled by venture capital (VC) money.

As Richard Thaler and Cass Sunstein remind us in Nudge: “Markets provide strong incentives for firms to cater to the demands of consumers… whether or not those demands represent the wisest choices.”

The point being that investor money doesn’t always go into something that is a socially useful activity. It goes where investors think high returns can be earned. VCs obviously know this, which is why they end up backing companies that essentially hurt society on the whole.

The gamble

VCs and entrepreneurs also know that backing such firms means living with the constant risk of policy turning against them. Part of the bet is that they can manage the system in their favour – and often, they do.
But when people fall into debt traps and even take their own lives, no government can just sit on its hands. It has to be seen acting, even if the fix is not perfect in economic terms.

Indeed, companies selling online money gaming as a shortcut to quick money need to remember a basic truth: high risk doesn’t always translate into high return – it can also lead to losses.

So, honestly, I don’t buy this sob story about VCs that is being sold by economic commentators and the business media. They knew what they were getting into and were unable to manage the risk associated with it.
As far as economic commentators are concerned, they forgot the basic fact that economics is not just about economics but more about the politics around that economics, which is why the subject was originally known as political economy.

The first question

This brings me back to the original point of 45 crore individuals losing Rs 20,000 crore, or an average loss of around Rs 444 per person. While the amount per person may not be large, there is a question of the time being spent on playing these games.

A November 2024 news report in the Business Standard, quoting a report titled Lumikai’s ‘State of India Interactive Media and Gaming Research’, points out: “The average weekly time spent on games increased by 30 per cent, from 10 hours to 13 hours.” Of course, not all of this time went towards playing money games.

Now, 13 hours a week works out to around two hours a day. Indeed, that’s a lot of time spent playing games. And this takes us back to our first question: Why are so many Indians playing these games?

There could be multiple answers for this:

1) The Business Standard report quoted earlier points out that 43 percent of gamers are first-time earners in the age group of 18-30. This could mean multiple things. First, these youngsters play these games for so long simply because they have access to their mobile phones all the time. Second, it could also be a function of the fact that they are employed in non-productive jobs, leaving them with a lot of time, or the fact that they are simply unemployed.

2) The concept of identified life could be playing out here as well. I download and start playing the game after I come to know of a friend or an acquaintance hitting the jackpot by playing one of these games, and thinking, if they could do it, so can I.

As economic historian Charles Kindleberger wrote in Manias, Panics and Crashes: “‘There is nothing as disturbing to one’s well-being and judgment as to see a friend get rich.’ Unless it is to see a non-friend get richer.”

The trouble here is that everyone who thinks that they can make money playing such games forgets a basic fact: that the companies running such games also need to make money. And for that to happen, there can only be a few winners, but there need to be a lot of losers.

3) The popularity of these games could also be explained by the need to earn an extra income, over and above what one is earning, given that that may not be enough. Top cricketers advertising for these gaming companies feed into this dynamic by promising easy riches.

To conclude, markets will always invent products to satisfy demand, whether or not those demands make sense or are socially useful for that matter. Investors will fund them, hoping for outsized returns.

And governments will eventually intervene when social costs spill over – addiction, financial ruin, even suicides – because they cannot afford to appear indifferent.

Each player thinks they are acting rationally in their own world, and that leads to the inevitable clash.

The real challenge lies in balancing innovation with protection, profit with responsibility, and freedom with regulation. That’s why the sob stories – whether from VCs, firms, or their lobbies for that matter – don’t really work.

Everyone knew the rules. Everyone chose to play. And now, the house has called time. Or as Willie Nelson once wrote and sang: “Turn out the lights, the party’s over.” 

Vivek Kaul is a writer and an economic commentator.

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