India ‘ s Online Game Promotion and Regulation Act will enter into force on 1 May. However, according to Indian legal experts, the bill that eventually came into force removed a draft that would have given an enterprise 180 days to refund the balance to the user after the gold game had been banned. This may raise one of the biggest outstanding consumer risks in India’s new game.
The proposed rule 24, which was excluded from the final publication of the Online Game Promotion and Regulation Act (PROGA), had become a major point of contention in the new regulatory framework, shifting responsibility for the recovery of residual balances from platforms to users and creating what lawyers termed “no-man’s land” on pre-proscription deposits. According to the draft proposed in October 2025, game companies, banks and financial institutions should have returned the user ‘ s funds within 180 days of the entry into force of the law, and such transactions would not be considered to have assisted the illicit gold game. However, it does not appear in the Bill regulations that will enter into force on 1 May. With the entry into force of PROGA, India will have an online game board (OGAI). Once OGAI is identified as an online gold game platform, banks and payment services are informed to trigger financial transaction restrictions against the operator. According to industry executives and legal experts, this may actually freeze the balance in the user ‘ s wallet, trust account or node account, and does not provide any specific legal means of refund. The Indian legal expert, Vaibhav Kakkar, stated: “The removal of the explicit 180-day refund clause represents a significant erosion of the financial protection of users. Although users do not lose their basic rights to deposits and bonuses, the lack of statutory time limits creates ambiguity and increases the risk of delay or dispute.”
It was noted that this issue presented a dilemma for operators. Refunds after 1 May, which may, under certain explanations, be regarded as assistance to a genuine gold game transaction prohibited by law, face a maximum of three years ‘ imprisonment and a penalty of Rs.10 million. The retention of these balances, however, may in turn expose the platform to allegations of illegal withholding of funds, even subject to review by the anti-money-laundering law. Jay Sayta, a technologist and game lawyer, stated that the lack of equivalent provisions to 24 draft articles in the published framework could prompt banks and financial institutions to be extremely cautious about remittances. “It can be said that after 1 May, users may not be able to obtain any refunds from online games platforms, as banks and financial institutions may fear potential liability for the mere return of funds,” Jay Sayta said. He added that, literally speaking, article 7 prohibited payment for game services, but that it did not necessarily prohibit the return of funds to users. He called on the Department of Electronics and Information Technology to provide immediate clarification on the treatment of refunds and the management of unclaimed balances, including the possible transfer of funds to the Player Benefits Fund or other designated mechanisms. Industry executives estimate that, after the legislation was approved by Moody in August 2025, some platforms, while banning the gold game, may still have hundreds of thousands of unclaimed surplus users. In the absence of a systematic means of refund, users are increasingly concerned that these funds may be frozen indefinitely. Under the published framework, users can still seek redress through the complaints mechanisms established by the Platform and report unresolved complaints to OGAI, which can issue redress or remedies. However, in the view of the experts, this approach was reactive, complaint-oriented and distinct from the voluntary refund obligations assumed by the Platform as envisaged in the draft.
The management partner of the Indian law firm Krida Legal, Vidushpat Singhania, stated that OGAI could still issue targeted instructions, including temporary unfrozen accounts, to settle arrears, but this would depend to a large extent on how the agency would exercise its rights when it formally became operational, “the actions of the Enforcement Bureau on well-known platforms are of guidance”. The regulator might test whether the retained balance constituted proceeds of crime, a position which he believed would ultimately be reviewed by the court. Legal experts indicated that the lack of safe port provisions for refunds exposed both consumers and operators to risks. Several experts stressed that Governments might need to issue circulars, codes of conduct or ministerial clarifications to exclude refunds of pre-prohibition balances from punishment. Counsel warns that user funds may have been frozen in the grey area of the law until then, making this legislation, which is based on consumer protection, a test of whether the law protects its intended users.