Online gaming companies are being misused for financial fraud, terror financing and money laundering, Union Minister of Information and Broadcasting Ashwini Vaishnaw said on Wednesday, before a bill banning online real-money games was sent to Parliament.
"In certain cases, real-money games and online games are being linked to illegal activities including financial fraud, money laundering, and financing terrorism," Vaishnaw said in an accompanying Statement of Objection and Reason for the bill.
Vaishnaw has also pointed out the fact that many real-money gaming companies are operating as offshore entities and evading Indian laws and taxes for the sector. This has posed a challenge for law enforcement officials.
The Cabinet approved the Promotion and Regulation of Online Gaming Bill 2025 on Tuesday. It will be tabled in the Lok Sabha on Wednesday. The government intends to regulate gaming sector with the bill.
If passed, under the proposed regulation, offering, aiding, abetting, or inducing otherwise in the offering of any online money will be a criminal offense. The bill also seeks to make it an offense for banks and financial institutions, and individuals facilitating fund transfer related to such activities.
In the absence of a proper regulatory framework, the industry continued to function in a grey zone. This raises risk for young participants and other users to be exposed to severe risks, according to the government.
The government believes that establishing an authority to regulate the sector will make way for innovation and attract responsible investments and align India's online gaming industry with international best practices.
With the Promotion and Regulation of Online Gaming Bill 2025, the Centre is aiming to promote e-sports games and online social games with a ban on real-money games. The bill will accord formal recognition and governance of e-sports.
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