The Promotion and Regulation of Online Gaming Bill, 2025, passed by the Lok Sabha on August 20, has sent shockwaves across the online real money gaming (RMG) industry in India. The Bill prohibits seeking money from users for any online game that leads to a gamble for a higher return or loss. 

The decision has cast a shadow not only over revenues and jobs, but also over the fate of the artificial intelligence systems that were developed and deployed by Indian RMG firms to supplement their operations.

The core mechanics of online money games are said to be largely predefined rules, skill elements, randomness, or chance mechanisms, rather than AI modelling or decision-making engines. AI plays a supportive role in user targeting, platform operations, personalisation, and industry marketing strategies.

However, academic papers and technical showcases reveal the extent of this reliance. A major company, for example, developed a graph-based system that detects multi-account misuse in real time. 

Other firms have deployed transformer models to predict user spending and reinforcement learning systems to optimise fantasy line-ups with near-human strategic finesse. 

Some startups even experimented with large language models to boost decision-making in cricket-based fantasy formats. 

This intensive AI usage, however, was not about high-profile announcements or billion-dollar moonshots. Between 2020 and 2024, RMG drew close to $1 billion in investor funding, yet none of it was earmarked for AI separately.

A senior technical officer at an online gaming company, seeking anonymity, disclosed that generally there is a lot of investment that has gone into AI and technology in this space. 

“The primary use case I would highlight is responsible gaming. A lot of investment has gone into responsible gaming,” they shared. 

They said though it is too early to comment on the Bill, these AI systems are not going to be in operation if RMG is discontinued. 

“Free-to-play games may continue, but since they have very few players, much of the AI system is not needed,” they said, adding that the industry has been contributing heavily in terms of the growth of AI in the country. 

“Even though there are multinational companies working on AI systems, this industry has been one of the primary advocates of technology and ‘Make in India’,” they said. 

“In the last seven to eight years, there has been huge growth in AI adoption,” they said, adding that about five percent of the workforce in RMG companies works with AI. 

“If you include adoption-related roles, the percentage is even higher. In terms of expenditure, around 5–10% of total investment goes into AI systems, talent, and infrastructure. With GPU costs included, it could be even more,” they shared, explaining that since these companies are all cloud-based, the cloud partners will also be impacted if operations are discontinued.

In a podcast last year, an engineering director at a company, who did not want to be named, described how his team struggled to manage scattered machine learning models across multiple platforms. 

The fix came through a Kubernetes-native AI infrastructure platform, which consolidated their AI infrastructure, cut costs by up to 70% through spot instance usage, and improved data security by running entirely on internal infrastructure. 

It was a glimpse at how India’s RMG firms were evolving into sophisticated AI-first tech outfits.

What’s next? 

The ban raises uncomfortable questions: What becomes of these AI systems and the skilled engineers behind them? Industry voices are united in their concern. 

“The immediate effect will mean mass unemployment for skilled resources,” warned Ishan Sukul, co-founder and CEO of electronics brand Kreo. 

He noted that AI was not simply a front-end tool for better gameplay but a deep internal muscle that engineers relied on daily. With companies forced to shut down or downsize, those systems may end up looking for a second life outside the industry.

In theory, fraud detection modules and recommendation engines could be retooled for fintech, edtech, or esports. But, reality may not bend so easily. 

“Talent can be repurposed, but this will just be a large hole in the ecosystem,” Sukul said, pointing out that only the best engineers will find a home quickly, while others may be left in limbo or pushed toward entrepreneurial paths. 

Meanwhile, the investors who once helped fuel the RMG boom may now turn cautious. “This will significantly impact how investors view gaming as a sector in India, especially if it’s collecting money in any form,” Sukul warned.

It is a jarring reversal for companies that appear to be pushing gaming technology forward in novel ways. 

Beyond India, the use of AI in gaming continues. A 2020 US patent application by Cambridge-based FalconAI Technologies outlined an AI system designed to actively coach players by predicting opponent strategies and offering real-time guidance, effectively creating a scalable, AI-powered version of a human trainer. 

Such experiments underline that the story of AI in gaming is far from over.

When asked if in the long run, does this ban risk stalling AI innovation in gaming, or could it redirect capabilities into more regulated, socially acceptable domains, Sukul summed it up by saying that AI innovation in gaming is not restricted to RMG at all.

“In fact AI is used way more in the non-RMG sector, way way more,” he concluded.

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