The Centre has justified its decision to ban online money gaming by filing an affidavit before the Supreme Court, exposing links between the unregulated online gaming sector and serious threats including terror financing and money laundering. The affidavit was submitted in response to petitions challenging the Promotion and Regulation of Online Gaming Act, which has not yet been formally notified following presidential assent.
Financial Fraud and National Security Risks Highlighted
The government emphasized that online money games pose significant social, economic, psychological, and privacy risks, particularly to youth and vulnerable groups. It argued the law aims to protect individuals and safeguard the financial system’s integrity, as the unchecked growth of online gambling has been tied to tax evasion and funding of terrorism, thereby threatening public order and national security.
Data and Reports Reveal Money Laundering Networks
Classified data based on Suspicious Transaction Reports and Cross Border Wire Transfer Reports, submitted in a sealed cover to the court, showed that many online gaming companies are registered in small island nations. These companies facilitate user accounts with Indian banks under proxy names, and funds collected are illicitly remitted abroad under false pretenses, fueling money laundering and terror financing networks.
