India Gaming Payments Market Outlook (2025)

May, Sun, 2025
deekpay
India Payments

India Gaming Payments Market Outlook Analysis (Professional Perspective)

I. Current state of the industry and policy environment

Specificity of the legal framework:

India's Public Gambling Act 1867 gives states legislative power over gaming, with five states, including Goa and Sikkim, allowing brick-and-mortar casinos to operate
The new IT Act 2023 explicitly prohibits "unauthorised real money gaming platforms", but skill-based gaming is legal.

Payment infrastructure characteristics:

UPI Unified Payment Interface accounts for more than 60% of mobile transaction volume
Local wallets like Paytm, PhonePe capture 75% market share
RBI requires PCI-DSS certification for all payment processors

II. Market size and growth drivers

Data indicators:

Online Gaming Market Size Reaches $2.5 Billion by 2023 (FICCI Report)
CAGR projected 18.7% (2024-2030)

India Gaming Payments Market Outlook Analysis (cont'd)

II. Market size and growth drivers (continued)

Core growth drivers:
- Smartphone penetration increases: Over 750 million smartphone users and 521 TP3T internet penetration in India by 2023 (TRAI data), driving demand for online betting.
- Explosive growth in digital payments: UPI transaction volume to cross 10 billion transactions/month by 2023, with e-wallets and buy now pay later (BNPL) models helping to facilitate betting payments.
- Cricket and other sporting events drive betting economy: Fantasy Gaming platforms (e.g. Dream11, MPL) saw a surge of 3,001 TP3T in trading volume during the IPL (Indian Cricket League).
Segmented market opportunities:
- Legal Gaming Class:
  - Fantasy Sports: 40% of the online gaming market, expected to reach $5 billion by 2030.
  - Skill games such as Rummy/Poker: dominated by South India, contributing 30% in revenue.
- Grey area business:
  - Visits to international gaming sites continue to rise, with some players completing top-ups via cryptocurrency or third-party agents.

III. Payment ecology and challenges

Mainstream payment methods and trends
| Payment Methods | Market Share | Scenarios
|———-|———|———-|
| UPI | ~60% | < Rs. 5000 Small HF Transactions |
| E-Wallets (Paytm, PhonePe) | ~25% | Fantasy Gaming & Casino Top-Up |
| Net Banking / IMPS | ~10% | > Rs. 10,000 Large Transactions |
| Cryptocurrency (USDT/BTC) | <5% (but growing fast) | VIP Player Cross-Border Settlement |
Key regulatory challenges

RBI's vague definition of 'gambling-related transactions' leads to frequent freezing of merchant accounts by banks
GST rate hiked from 18% to 28% (effective October 2023), squeezing operators' margins
Digital Personal Data Protection Act 2023 requires KYC enhancements and increases user acquisition costs

IV. Competitive landscape and business model innovation

Top Players Dynamics:

Dream11 (valued at $8bn): adopting a "virtual credit" model to avoid regulation of direct cash transactions
MPL & Winzo: Introducing the NFT Reward System to Enhance User Stickiness
Betway/1xBet and other international platforms maintain operations through local agents + cryptocurrency settlements

Fintech Solutions Innovation:
✔️ White-label Payment Gateway providers on the rise (e.g. Cashfree)
✔️ AI risk control system screens suspicious transactions in real time (mandatory for RBI)
✔️ "Tokenisation" technology reduces compliance risk by replacing direct card connections

V. Future outlook and strategic recommendations

✅ Optimistic forecast direction:
-Possible "federal regulatory framework" by 2030 with clear legal/illegal boundaries
-Aadhaar Biometric Authentication + KYC Automation Will Improve Industry Transparency

⚠️ risk warning:
▷ The government may follow China's lead in banning real money gambling sites altogether
▷ UPI may restrict service to unlicensed gaming platforms

💡 Business Strategy Recommendations.
✦ Focus on Fantasy Sports and other compliance areas apply for FEMA filing
✦ Diversify risk with Hybrid payment solutions (UPI + Encryption + Cash Pickup)

India Gaming Payments Market Outlook (2025)