The Centre is in advanced stages of finalising a move that could bring online real-money gaming companies such as Dream11, Games24x7, and Winzo under the ambit of anti-money laundering laws and subject them to stricter obligations such as know-your-customer (KYC) requirements, and tracking and reporting suspicious transactions, The Indian Express has learnt.
The proposal, steered by the Ministry of Finance and sent for inter-ministerial consultations, could result in online real-money gaming companies getting denoted as “reporting entities” under the Prevention of Money Laundering Act (PMLA), 2002.
PMLA stipulates certain record-keeping and reporting obligations for financial institutions — banks, financial intermediaries or a person carrying on a designated business or profession — by classifying them as reporting entities.
A reporting entity, under PMLA, has to furnish information about its clients and transactions to Financial Intelligence Unit-India (FIU-IND) under the Ministry of Finance and follow a number of compliance obligations including maintaining a record of all transactions, documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients.
It is also subject to compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) obligations, in line with norms of the global money laundering watchdog Financial Action Task Force (FATF).
In a similar move in 2023, the Finance Ministry had notified virtual digital assets (VDAs) as reporting entities, a measure which was squarely aimed at cryptocurrency firms.
If this is finalised, it would mark the second major action on gaming companies after a 28 per cent Goods and Service Tax (GST) was levied on full deposits that users make on such apps in 2023.
It also follows rules to regulate the sector which were notified by the IT Ministry, but remain in limbo and unenforceable due to procedural issues.
“We believe there is a lot of unaccounted money circulating within the online gaming apps and that has to be curtailed. So, the government is moving to bring them under the PMLA ambit and require them to track and report suspicious transactions,” said a senior government official on the condition of anonymity.
According to a report by FICCI and EY from March 2025, online gaming companies in India collectively earned a revenue of close to $2.7 billion in 2024. These companies typically make money by taking a cut from a user’s winnings. As per the report, more than 155 million Indians engaged with real money gaming sub-segments such as fantasy sports, rummy, poker, and other transaction-based games in 2024, marking a 10 per cent increase over 2023. On an average, around 110 million people played these games daily.
Sources in the gaming sector, who work for companies based in India, said that while domestic companies will abide by requirements of the PMLA, their concern is that offshore betting and gambling apps are unlikely to abide by the requirements — an issue they had raised when the 28 per cent GST was imposed on them.
“By conservative estimates, there is anywhere around $25 billion to $30 billion worth of money that is circulating on these offshore betting platforms. Much of that is unaccounted for because the government currently does not have a way to rein them in. While the domestic gaming companies are subjected to onerous requirements, with first the GST and the potential inclusion in PMLA, the offshore firms are making a lot of money,” a senior gaming industry executive said.
The Ministry of Finance did not respond to queries sent by The Indian Express on this issue.
The government has been acting against flouting of compliance norms by online gaming companies. Earlier this month, the government informed Parliament that the IT Ministry had issued more than 1,400 blocking directions related to online betting/gambling/gaming websites between 2022- 2025 (until February). The Directorate General of GST Intelligence (DGGI) has blocked over 350 links of illegal and non-compliant offshore online money gaming platforms.
However, gaming executives said that blocking such platforms may not be effective. “Blocking their domains has also not been effective, since they create new landing pages within minutes of being taken down,” the executive quoted above added.
Much of the industry’s woes also stem from the fact that the IT Ministry’s effort to regulate the online gaming sector, which was done through amendments to the Information Technology (IT) Rules, have failed to take off and have had no regulatory teeth.
In April 2023, the ministry had notified rules for online gaming which allowed for the setting up of self-regulatory bodies to vet the legitimacy of online games, with oversight of the government, among other provisions.
However, some proposals for self-regulation could not be accepted by the ministry as it felt they may be influenced by the gaming industry, raising potential conflict of interest issues.
In an ongoing case in the Madras High Court where the court is hearing challenges to the state’s online gaming law, the IT Ministry, in a submission, said that the IT Rules provisions related to the sector remained “unenforceable” since the ministry has not designated any self- regulatory bodies. (Indian Express)
