In the past week, India’s digital economy has been characterised by the passing of the Promotion and Regulation of Online Gaming Bill, 2025. This has effectively put to bed India’s thriving real money gaming (RMG) sector. The legislation imposed a blanket ban on all online games involving monetary stakes, regardless of whether they are deemed games of skill or chance. This has wiped out an industry projected to reach ₹23,000 crore by 2029, triggering immediate platform shutdowns by major players including Dream 11, MPL, Games 24x7, Winzo and Zupee. These companies, hailed as unicorns or near-unicorns, symbolised India’s startup boom. It was therefore shocking for these platforms that resurgent governmental authority would cease their operations within a few days.
The tussle between capital holders against the state apparatuses increasingly unwilling to cede control has been going on since sometime. A glaring example is Elon Musk’s fraught relationship with the Trump administration in 2025. Musk, who poured millions into Trump's 2024 campaign and positioned himself as a key advisor through the Department of Government Efficiency (DOGE), initially wielded outsized influence, slashing federal jobs and claiming $160 billion in savings. However, by mid-2025, tensions boiled over. Trump publicly threatened to revoke Musk's government contracts, while Musk retorted that Trump owed his election victory to him. Musk's eventual distancing and announcing his exit from Washington in May 2025, highlighted governmental pushback against billionaire overreach. Globally, right-leaning governments are reasserting their relevance, reversing decades of laissez-faire capitalism.
In India, the RMG ban exemplifies this dynamic at play. The sector's meteoric rise began with judicial clarifications distinguishing games of skill from gambling. Landmark rulings, such as the Supreme Court's 1996 decision in Dr K.R. Lakshmanan v State of Tamil Nadu and subsequent high court verdicts, affirmed that platforms like fantasy sports (e.g., Dream11's/My11Circle’s cricket leagues) involved skill predominance of knowledge over chance, thus exempting them from the Public Gambling Act of 1867. Emboldened, companies like Dream11, MPL, and Games24x7 poured billions into marketing and user acquisition, attracting investments from global giants like Tiger Global and Westcap. Winzo reported ₹1,055 crore in revenue for FY24, while Zupee boasted ₹146 crore as profit after tax, thereby signalling rapid growth. These firms operated in a grey area, promoting 'skill-based' gaming amid ambiguous regulations, until the 2023 GST hike to 28 per cent on full bet value foreshadowed doom. The 2025 ban, citing addiction, fraud, and national security, has now criminalised their core operations, with penalties up to three years' imprisonment and ₹1 crore as fine(s). From this extinction event, three key takeaways emerge, illuminating the shifting sands of power.
First, the rollback of the 'nightwatchman state': Robert Nozick's vision of a minimal government limited to protecting rights, as articulated in his 1974 work Anarchy, State, and Utopia, is reversing globally, particularly under far-right regimes. Nozick argued for a state that refrains from paternalistic interventions, allowing free markets to flourish. Yet, in 2025, populist leaders are expanding state roles to curb perceived societal ills. India's ban aligns with this, mirroring European far-right pushes for stricter immigration and economic controls. Far from minimalism, governments are intervening aggressively: Trump's workforce slashes via Musk were state-orchestrated, not market-driven. This reversal prioritises moral and security imperatives over economic liberty, signalling the end of unchecked capitalism.
Second, heavy reliance on marketing, user acquisitions, and investments in grey areas proves futile when there is a lack of policy clarity. India's RMG unicorns exemplify this hubris. Dream11 and MPL invested millions in celebrity endorsements and IPL sponsorships, ballooning user bases to hundreds of millions. But operating without robust policy safeguards invited regulatory backlash. Precedents abound: the 2019 e-cigarette ban, prohibiting production and sale amid youth addiction fears, decimated a nascent industry overnight, with black markets thriving but legitimate players vanishing. Similarly, cryptocurrency faced RBI's 2018 circular banning banking support, lifted by the Supreme Court in 2020, only for a 30 per cent flat tax and 1 per cent TDS in 2022 to cripple exchanges, trading volumes plummeted 90 per cent by 2023, with many platforms relocating abroad. By 2025, India's crypto sector remains stifled, with ongoing reviews unlikely to reverse the damage. RMG firms, focused on growth metrics, ignored these warnings, leading to their downfall.
Third, focus on business growth without sufficient concern about a clean policy pathway is futile. These gaming giants for example, had anywhere from 500 to 1,500 staff each, dedicated a handful of people to public policy and government relations. This is because these platforms were largely banking on governmental inaction as they were ‘too big to fail’. This imbalance had left them severely vulnerable, and the results have been made clear in the past week. This is particularly important for businesses operating in regulatory grey areas.
The extinction of India's gaming unicorns is not merely a local tragedy but a harbinger of capitalism's reconfiguration. As governments reclaim authority, entrepreneurs must adapt or perish. The state, once a nightwatchman, now patrols with a torch and it's illuminating the limits of unchecked ambition. In this new era, survival demands balancing innovation with policy acumen, lest more unicorns vanish into myth.
The authors are co-founders of the Centre for New Economy Research (CNER)
