India’s Supreme Court has postponed its consideration of challenges to the Promotion and Regulation of Online Gaming Act (PROGA), 2025, setting the stage for a January 2026 hearing before a three-judge Bench. The decision follows urgent pleas from real-money gaming companies, which say the delay has worsened financial losses and triggered widespread operational shutdowns.
Court Points to Need for Larger Bench
A Bench led by the Chief Justice indicated that cases questioning the constitutional validity of legislation - particularly those involving legislative competence - are typically moved to a three-judge panel. The court explained that the PROGA petitions will be taken up once that Bench is in place. Despite repeated requests for an earlier date, the Chief Justice reiterated, “Everything is shut down.… We are listing in January. That is what I am promising.”
Petitioners told the court that matters connected to PROGA had unexpectedly disappeared from the docket of another Bench that had been examining state-level prohibitions. Those state cases, involving arguments over whether individual states may regulate or restrict online gaming, have already been heard and reserved for judgment. Lawyers stressed that both sets of disputes are closely linked because determinations on the powers of one level of government will influence the other.
Industry Reports Heavy Strain
Head Digital Works (HDW), the lead petitioner, said the postponement has magnified the effect of the law even before it is formally notified. The company described banks and intermediaries withdrawing services shortly after PROGA was published in August, resulting in halted settlements, blocked UPI access and the suspension of communication channels until undertakings were provided. HDW told the court that it has recorded no revenue for nearly three months while still carrying monthly costs above ₹10 crore. Its staff count dropped from 606 to 178, and its foreign investor Clairvest wrote off a ₹760-crore investment.
Industry commentary referenced in the petitions warns these constraints amount to “de facto enforcement” because operators cannot function while waiting for judicial clarity. Broader estimates suggest thousands of workers have already lost their jobs, and companies have reported significant asset write-downs.
Debate Over Rationale and Impact
Parliament approved PROGA in August with little discussion, putting in place a nationwide prohibition on online money-gaming activities—including those traditionally viewed as skill-based, such as fantasy sports, esports and online poker. The law prescribes penalties of up to three years’ imprisonment and fines for anyone offering real-money games.
Supporters of the Act frame it as essential for public protection, citing risks associated with financial fraud and manipulation. One commentary argued the legislation “unmasked the wolf for what it is,” while another stated that unchecked growth had been linked to “financial fraud, money laundering, tax evasion and, in some cases, the financing of terrorism”.
Yet industry executives caution that the blanket ban is pushing users toward offshore platforms.
With the Supreme Court now set to revisit the issue in late January, operators, investors, and workers await a ruling that will determine whether the Union, states, or both can regulate real-money online gaming - and whether the industry can resume operations in India.
Source:
“Breaking: SC flags need for three judge bench, pushes Online Gaming Law challenge to January”, storyboard18.com, December 11, 2025
