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Gaming Operators Targeting India Warned for Money Laundering, Tax Violations

The Indian government's Directorate General of GST Intelligence (DGGI), which is in charge of combating tax cheating, is targeting the gaming industry. According to the Economic Times, the government has targeted roughly 38 online gambling platforms for possible money laundering and tax offences.

According to the DGGI, the corporations earn revenue from Indian consumers but transfer it out of the country. India has yet to legalise online gambling and, according to recent reports, may do so in the future.


According to the organization, the platforms are able to avoid tax requirements in the country through their operations. Furthermore, they enable certain persons, particularly high-net-worth individuals, to launder money while avoiding paying taxes.


Billions of dollars in revenue have been lost.

According to the DGGI, unlicensed gaming activity is responsible for cash flight of up to INR120 billion (US$1.46 billion). This figure is valid from April 2019 through November 2022. However, estimating the financial movement would be impossible.


According to an Income Tax Department report, a growth in online betting on ostensibly free gaming platforms has led to an increase in tax evasion and money laundering. According to the research, these platforms permit payments through the use of foreign-drawn bank cards and cryptocurrencies, making it difficult to determine the source of the money.



If they want to operate in India, offshore gaming enterprises must comply with an overdue tax calculation and GST (goods and services tax) registration. If the required standards are not met, tax officers will submit the situation to the Ministry of Electronics and Information Technology (MeitY) for the prohibition of such gaming sites. Domestic gambling platforms are also under review.


According to the DGGI, continued infractions may result in criminal proceedings being filed against senior executives of the companies.


The government would not identify the 38 entities that had shown on its radar, albeit some operators may have put themselves in harm's way. Offshore betting organisations use Indian media to sell their services to customers, frequently featuring notable players in their advertisements.


For example, Dwayne Bravo and Kieran Pollard of the West Indies recently supported 1XBet in a full-page advertising in the Times of India. Lotus 365, Betway, and other bookmakers also place full-page advertisements in publications.


The Future of Online Gaming Uncertain

India is also struggling to have a standardised strategy to gaming. Leaders in many states have repeatedly argued over what constitutes gambling, with some court issues currently pending.


To assist alleviate some of the misunderstanding, the government recently enacted new legislation. It defined online real money gambling as any gaming activity in which cash or other valuables are exchanged for the chance to win a prize.


The country is also enforcing a prohibition on all unlicensed online gaming operations. Social media sites and online gaming operators must ensure that their users do not offer any options that may break the regulations.


That is insufficient for the state of Tamil Nadu. It just prohibited all internet gambling after its governor, Ravindra Narayana Ravi, signed a bill adopted by the state Assembly a few weeks ago.


Those who engage in internet gambling in the state face up to three months in prison and a fine of INR5,000 (US$60.90). Anyone who sells the games faces up to three years in prison and a fine of up to INR1 million (US$13,970).

By fLEXI tEAM


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