SC refers online gaming sector case to three-judge bench

The Supreme Court has indicated that challenges to the Promotion and Regulation of Online Gaming Act (PROGA) 2025 will be placed before a three-judge bench, with the hearing likely only in January 2026. The direction came even as petitioners urged an expedited timeline, warning that the online skill-gaming sector is facing unprecedented paralysis despite the law not yet being notified.

A bench led by the Chief Justice heard an early-listing plea from Head Digital Works, operator of A23, which said the case had unexpectedly dropped from the docket of the bench hearing related appeals on state gaming bans. Counsel argued that the removal had left the industry vulnerable to financial and operational disruption and stressed that PROGA’s constitutional validity required urgent examination.

The court noted that challenges to the validity of a statute—particularly on grounds of legislative competence—are typically placed before a three-judge bench. It signalled that all PROGA-related matters will be listed together once the new bench is constituted early next year. When counsel pressed for an earlier hearing, citing a collapse of operations across the sector, the bench reiterated that the matter would be heard only in January.

Petitioners said banks and intermediaries began withdrawing services within days of PROGA’s publication in August, leading to blocked payment channels, frozen settlements and suspended communication systems—triggering heavy losses and workforce cuts. Investors, they added, have also recorded write-offs amid ongoing regulatory uncertainty.

The government has defended PROGA as a necessary safeguard for an unregulated ecosystem that it says exposes users to financial and social harm, maintaining that Parliament has full authority to legislate for the sector.

Introduced in 2025, PROGA establishes a national framework for online money gaming, including registration, compliance requirements and penalties. Although passed after months of debate and published in August 2025, it has not yet been brought into force.

With the matter now headed to a larger bench, the industry’s future hinges on a constitutional ruling that will determine whether the Union, the states, or both can regulate online gaming.