Report on India’s Online Gaming Sector
- 25 Oct 2024
In October 2024, the Digital India Foundation (DIF) released a report identifying money laundering as a major threat to India’s online gaming sector, recommending a government ‘whitelist’ of compliant gaming companies to regulate and protect the industry.
Key Points
- Whitelist of Compliant Operators: DIF advocates a ‘whitelist’ for online gaming companies to ensure only government-approved operators can access payment gateways and ISP services.
- Money Laundering and Terror Financing: The report highlights the misuse of international online betting platforms for money laundering and terrorism funding, calling for a specialized task force to target illegal operators.
- Market Growth and Challenges: With the real money gaming (RMG) sector projected to reach $7.5 billion in five years, the report raises concerns about financial integrity, cybersecurity, and user safety in an industry attracting $100 billion annually in illegal deposits.
- Use of Cryptocurrencies and VPNs: It warns of growing risks from in-game assets and cryptocurrencies, as well as the circumvention of regulatory blocks through VPNs and geo-blockers.
- Regulatory and Enforcement Measures: DIF recommends mandatory registration for RMG operators under the Central Goods and Services Tax Act and an advisory for advertisements limited to whitelisted operators, aiming to block illegal gaming activity.
- Cross-Border Cooperation: It urges the government to form international partnerships to combat illegal gaming, enhance transaction monitoring with banks, and increase public awareness on safe gaming practices.
- Call for Regulatory Framework: To clarify legal from illegal operations, DIF suggests a designated regulatory authority under the Ministry of Electronics and Information Technology (MeitY) to ensure financial integrity and sector growth.
