Layoffs, Shutdowns, And The Fallout Of India’s Online Gaming Ban - Explained

India’s gaming ecosystem is undergoing seismic changes after the Rajya Sabha cleared the Promotion and Regulation of Online Gaming Bill, 2025, last month.

Championed by Union IT Minister Ashwini Vaishnaw, the legislation is a watershed for the sector, as it sets esports apart from gambling-style money games and imposes strict penalties on platforms operating with real money stakes.

Esports Gets Formal Status

One of the most significant aspects of the bill is the recognition of esports as a legitimate sporting discipline in India, on par with cricket, football and other established games. By underlining that esports requires skill, reflexes and strategic thinking, the government has opened new avenues for players, coaches and developers to build a more sustainable ecosystem. The shift is expected to bring increased visibility, sponsorship and state support to a field that had so far existed in a regulatory grey zone.

In stark contrast, money-linked games such as fantasy cricket, poker and rummy have been brought under a blanket ban. Platforms offering these games can no longer operate, advertise or receive financial backing in India.

Penalties are stringent: organisers could face prison sentences of up to three years or fines of up to Rs 1 crore, while advertisers risk two years in jail or fines of Rs 50 lakh. Payment processors and financial intermediaries have also been warned against enabling such transactions.

MPL Announces Heavy Job Cuts

The first signs of disruption came swiftly. Mobile Premier League (MPL), one of India’s largest gaming start-ups, reportedly announced a massive workforce reduction. Citing a source familiar with the company’s restructuring, Reuters reported that MPL will slash about 60 per cent of its Indian staff, translating to around 300 out of 500 employees across marketing, finance, engineering, operations and legal divisions.

The news agency quoted an internal email from MPL co-founder and CEO Sai Srinivas, wherein he wrote, “With a heavy heart we have decided that we will be downsizing our India team significantly.” He added that India accounted for half of MPL’s revenues, and the change meant the company would stop generating any revenue from the domestic market in the near term. MPL, which was once valued at $2.3 billion, is now focusing on free-to-play models abroad, especially in the US, where its paid gaming formats remain legal.

Dream11 and FanCode Pivot Strategy

MPL’s rival Dream11, valued at around $8 billion, has also pulled the plug on its paid fantasy cricket offering, which formed the backbone of its revenues. The parent company, Dream Sports, has shifted completely to free-to-play formats. Analysts note that more than 95 per cent of Dream Sports’ income came from cash-based contests, highlighting the scale of the impact.

Meanwhile, Dream Sports subsidiary FanCode has opted to close its merchandise arm, FanCode Shop, by October 2025. The unit, which sold official jerseys, footwear and other fan gear since 2020, will continue fulfilling existing orders before shutting down. A company spokesperson said, “This will help us focus on what’s growing fastest and delivering the most value to our users.”

Industry Faces Uncertain Future

The crackdown has rattled an industry that was projected to be worth $3.6 billion by 2029, supported by global venture capital investors like Peak XV Partners and Tiger Global. Start-ups argue that fantasy sports rely on skill, not chance, and should not be categorised as gambling. While companies such as A23 have initiated legal challenges against the ban, larger players like MPL and Dream11 appear resigned to comply rather than litigate.

For now, India’s online gaming sector stands divided: esports may thrive under official recognition, but fantasy and money-linked platforms face layoffs, shutdowns and a fight for survival. The coming months will determine whether India can strike a balance between safeguarding consumers and nurturing innovation in its fast-evolving digital economy.