Bengaluru-based online gaming firm Gameskraft has announced the difficult decision to lay off 120 employees, a direct consequence of the recently enacted Online Gaming Bill, 2025. The company stated that the current regulatory environment has compelled it to cease its business operations, leaving no alternative but to implement a company-wide restructuring. This move underscores the significant impact of the new legislation on the online gaming sector in India.

The Promotion and Regulation of Online Gaming Bill, which received presidential assent in August, imposes a strict prohibition on all online money-gaming platforms. Under this new law, individuals facilitating such platforms could face imprisonment for up to three years and substantial fines of up to ₹1 crore. Furthermore, the promotion of these platforms through advertising is also penalized, carrying a potential sentence of two years' imprisonment and fines up to ₹50 lakh. The broad scope of the ban has sent ripples through the industry.

Gameskraft has committed to honoring all agreements with the affected employees. This includes providing leave encashment calculated on their total salary, not just the basic component. The company also confirmed that group health insurance for its employees would remain active until March or until the laid-off employees secure new employment, whichever occurs first. Additionally, employees have the option to convert their group health insurance to an individual plan, and those who had included parents in their policy can maintain this coverage without interruption.

The layoffs at Gameskraft are not an isolated incident but rather a symptom of a broader crisis within the real-money gaming industry. Following the passage of the Online Gaming Bill, numerous companies operating in this segment have initiated mass layoffs. Industry insiders had previously issued stark warnings that the comprehensive ban could severely cripple the sector, potentially leading to over 20,000 job losses and forcing more than 300 companies to shut down their operations. This forecast appears to be unfolding as companies grapple with the new regulatory landscape.

Prior to this legislative change, India's gaming market was a burgeoning sector, valued at $3.8 billion and employing over 130,000 skilled professionals, according to venture capital firm Lumikai. Projections had indicated that the market could expand significantly to $9.2 billion by 2029. However, the sweeping prohibitions introduced by the Online Gaming Bill, 2025, have cast a shadow over these growth prospects, fundamentally altering the trajectory of the online gaming industry in the country.