India's regulatory onslaught: Tackling money laundering in online gaming

The Indian government is intensifying its efforts to address the proliferation of illegal online gaming and betting platforms and the associated concerns regarding money laundering and other unlawful activities. This comes in response to concerns raised in the Lok Sabha about the serious nature of online gaming and betting in the country.

The questions in the Lok Sabha specifically addressed:

Whether the network of online gaming and betting has taken a serious form, with reports indicating transactions exceeding $100 billion USD annually, and the government’s response.
Whether there's a need for collaboration between the government and tech companies like Google and Meta to combat this industry.
Whether these platforms are involved in money laundering and other illegal activities.
The details of these activities and the government's regulatory steps.
Whether many platforms operate from abroad and are involved in GST theft.
The details and regulatory steps concerning these platforms.

In response, the Ministry of Electronics and Information Technology (MeitY) clarified that while "Betting and gambling" is a State subject under the Constitution, the Central Government is also taking significant measures to counter the associated risks.

MeitY emphasized that it is actively engaged in promoting the ethical use of technologies and has amended the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 ("IT Rules, 2021") to address concerns related to online games. These rules place obligations on intermediaries to refrain from hosting unlawful information, including that related to money laundering or gambling.

Legislative and financial measures have also been implemented. The Bharatiya Nyaya Sanhita, 2023, punishes unauthorized betting and gambling. The Finance Act, 2023, introduced income tax on online gaming winnings, and GST is levied on online gaming. The Directorate General of GST Intelligence Headquarters (DGGI) has the authority to direct intermediaries to block unregistered online money gaming platforms, including those operating offshore.

MeitY has issued numerous blocking directions for online betting/gambling/gaming websites and mobile applications. DGGI is actively investigating offshore entities involved in these activities and has taken action to block websites/URLs and freeze bank accounts.

To combat cybercrime comprehensively, the Ministry of Home Affairs (MHA) has established the Indian Cyber Crime Coordination Centre (I4C) and launched the National Cyber Crime Reporting Portal (https://cybercrime.gov.in) and a toll-free helpline number '1930'.

Furthermore, the Ministry of Information and Broadcasting (MIB) has issued advisories to private satellite television channels concerning advertisements for online games and betting platforms, mandating disclaimers and prohibiting advertisements of betting and gambling platforms.

Through these multi-faceted efforts, the Indian government aims to create a safer online environment and curb the illegal activities associated with online gaming and betting.