Section 7: Prohibition of transfer of fund.

No bank, financial institution, or any other person facilitating financial transactions or authorisation of funds shall engage in, permit, aid, abet, induce or otherwise facilitate any transaction or authorisation of funds towards payment for any online money gaming service.

Explained:

Section 7 of the Promotion and Regulation of Online Gaming Act, 2025 deals with the prohibition of transfer of funds connected with online money gaming services. The provision is an important part of the Act’s financial-control mechanism because it prevents banks, financial institutions and other entities involved in financial transactions from facilitating payments for prohibited online money gaming services. The Act applies to online money games irrespective of whether they are based on skill, chance or both.

Section 7 prohibits any bank, financial institution or other person facilitating financial transactions or authorisation of funds from engaging in, permitting, aiding, abetting, inducing or otherwise facilitating any transaction or authorisation of funds towards payment for an online money gaming service.

The provision should be read with Section 5, which prohibits offering or facilitating online money games, and Section 9(3), which prescribes punishment for contravention of Section 7. A person violating Section 7 may face imprisonment for up to three years, or a fine up to ₹1 crore, or both. Repeat offences attract enhanced punishment.

Judicial Developments

In Winzo Games Private Limited v. Google LLC (CCI, 2026), the Competition Commission of India considered the impact of the new Online Gaming Act. The Commission noted that Section 7 prohibits facilitation of payments for online money games and that the statutory prohibition operates across real-money games without distinguishing between games of skill and games of chance.

Earlier jurisprudence had treated skill-based gaming differently. In Dr. K.R. Lakshmanan v. State of Tamil Nadu, the Supreme Court recognised the distinction between games predominantly involving skill and gambling. The Bombay High Court also discussed this principle in Play Games 24×7 Pvt. Ltd. v. RBI. However, the 2025 Act adopts a different statutory framework for online money games involving monetary stakes.

Thus, Section 7 strengthens the Act’s objective of preventing financial transactions from supporting prohibited online money gaming services.

Note: Since the Act is relatively new, judicial interpretation specifically concerning Section 7 is still developing.