Government flags deepening financial and security risks in real-money gaming ecosystem

The central government has informed the Supreme Court that the unchecked expansion of real-money online gaming in India is tied to a widening spectrum of financial and security risks, including money laundering, tax evasion, outward fund diversion and, in some cases, links to terror financing. Citing national security and public order concerns, the government defended the Promotion and Regulation of Online Gaming Act, 2025, which imposes a complete ban on real-money gaming across the country.

The affidavit stated that users lose nearly Rs 20,000 crore every year to real-money gaming platforms, affecting about 45 crore individuals. In FY24, outward remittances routed through gaming channels crossed Rs 5,700 crore, with domestic firms sending funds to offshore jurisdictions known for weak oversight. An analysis of suspicious transaction and cross-border transfer reports indicated that several entities registered companies in small island nations while user accounts in India were operated through proxy identities. Funds collected from players were allegedly moved overseas by mis-declaring the purpose of remittance, raising concerns of layered laundering.

The government argued that the online gaming ecosystem has enabled organised activity using mule accounts, crypto-based transfers, hawala networks and offshore shells. It added that aggressive advertising and influencer-driven promotions have expanded reach among young and vulnerable users.

With states reporting rising suicides linked to gaming losses such as Karnataka’s 32 cases and Telangana’s 20 in recent periods, the Centre said the societal and economic damage warranted decisive intervention. It added that the borderless digital nature of these platforms bypasses state regulation, making central legislation essential to safeguard public health, consumer interest and financial sovereignty.