The Centre is in superior levels of finalising a transfer that would convey on-line real-money gaming corporations equivalent to Dream11, Games24x7, and Winzo beneath the ambit of anti-money laundering legal guidelines and topic them to stricter obligations equivalent to know-your-customer (KYC) necessities, and monitoring and reporting suspicious transactions, The Indian Categorical has learnt.
The proposal, steered by the Ministry of Finance and despatched for inter-ministerial consultations, might end in on-line real-money gaming corporations getting denoted as “reporting entities” beneath the Prevention of Cash Laundering Act (PMLA), 2002.
PMLA stipulates sure record-keeping and reporting obligations for monetary establishments — banks, monetary intermediaries or an individual carrying on a chosen enterprise or career — by classifying them as reporting entities.
A reporting entity, beneath PMLA, has to furnish details about its purchasers and transactions to Monetary Intelligence Unit-India (FIU-IND) beneath the Ministry of Finance and comply with various compliance obligations together with sustaining a report of all transactions, paperwork evidencing identification of its purchasers and helpful homeowners in addition to account recordsdata and enterprise correspondence referring to its purchasers.
Additionally it is topic to compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations, in step with norms of the worldwide cash laundering watchdog Monetary Motion Process Drive (FATF).
In an identical transfer in 2023, the Finance Ministry had notified digital digital belongings (VDAs) as reporting entities, a measure which was squarely aimed toward cryptocurrency companies.
If that is finalised, it could mark the second main motion on gaming corporations after a 28 per cent Items and Service Tax (GST) was levied on full deposits that customers make on such apps in 2023.
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It additionally follows guidelines to manage the sector which had been notified by the IT Ministry, however stay in limbo and unenforceable as a consequence of procedural points.
“We imagine there’s plenty of unaccounted cash circulating throughout the on-line gaming apps and that needs to be curtailed. So, the federal government is shifting to convey them beneath the PMLA ambit and require them to trace and report suspicious transactions,” mentioned a senior authorities official on the situation of anonymity.
In keeping with a report by FICCI and EY from March 2025, on-line gaming corporations in India collectively earned a income of near $2.7 billion in 2024. These corporations sometimes generate income by taking a lower from a consumer’s winnings. As per the report, greater than 155 million Indians engaged with actual cash gaming sub-segments equivalent to fantasy sports activities, rummy, poker, and different transaction-based video games in 2024, marking a ten per cent enhance over 2023. On a mean, round 110 million individuals performed these video games day by day.
Sources within the gaming sector, who work for corporations based mostly in India, mentioned that whereas home corporations will abide by necessities of the PMLA, their concern is that offshore betting and playing apps are unlikely to abide by the necessities — a difficulty they’d raised when the 28 per cent GST was imposed on them.
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“By conservative estimates, there’s anyplace round $25 billion to $30 billion value of cash that’s circulating on these offshore betting platforms. A lot of that’s unaccounted for as a result of the federal government at present doesn’t have a technique to rein them in. Whereas the home gaming corporations are subjected to onerous necessities, with first the GST and the potential inclusion in PMLA, the offshore companies are making some huge cash,” a senior gaming business govt mentioned.
The Ministry of Finance didn’t reply to queries despatched by The Indian Categorical on this challenge.
The federal government has been appearing in opposition to flouting of compliance norms by on-line gaming corporations. Earlier this month, the federal government knowledgeable Parliament that the IT Ministry had issued greater than 1,400 blocking instructions associated to on-line betting/playing/gaming web sites between 2022- 2025 (till February). The Directorate Normal of GST Intelligence (DGGI) has blocked over 350 hyperlinks of unlawful and non-compliant offshore on-line cash gaming platforms.
Nevertheless, gaming executives mentioned that blocking such platforms might not be efficient. “Blocking their domains has additionally not been efficient, since they create new touchdown pages inside minutes of being taken down,” the manager quoted above added.
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A lot of the business’s woes additionally stem from the truth that the IT Ministry’s effort to manage the net gaming sector, which was carried out via amendments to the Info Expertise (IT) Guidelines, have didn’t take off and have had no regulatory tooth.
In April 2023, the ministry had notified guidelines for on-line gaming which allowed for the organising of self-regulatory our bodies to vet the legitimacy of on-line video games, with oversight of the federal government, amongst different provisions.
Nevertheless, some proposals for self-regulation couldn’t be accepted by the ministry because it felt they could be influenced by the gaming business, elevating potential battle of curiosity points.
In an ongoing case within the Madras Excessive Courtroom the place the courtroom is listening to challenges to the state’s on-line gaming legislation, the IT Ministry, in a submission, mentioned that the IT Guidelines provisions associated to the sector remained “unenforceable” for the reason that ministry has not designated any self- regulatory our bodies.