Online gaming in India is at risk of financial criminality, according to a report.

Online gaming in India is at risk of financial criminality, according to a report.

 New research indicates that the fast-growing online gaming industry in India is inadequately prepared to prevent money laundering and fraud.

 The Digital India Foundation (DIF) has issued a new report titled "Combating Money Laundering in the Online Gaming Ecosystem" in which it cautions against the financing of terrorism, money laundering, and fraud in the online gaming sector of the country.

 According to the report, the estimated daily participant base of 90 million grew by 28% from 2020 to 2023 in legal real-money gaming.  By 2029, it is anticipated to generate $7.5 billion (£5.8 billion/€6.9 billion).  However, "the financial integrity of India's online gaming ecosystem is significantly threatened by vulnerabilities."

 The think tank advocated for "improved [anti-money laundering] systems, stronger KYC practices, and enhanced oversight by financial institutions."

 Trickery is employed by illegal operators to entice patrons.
 Arvind Gupta, the co-founder of DIF, indicated particular apprehension regarding the proliferation of illicit online betting websites.

 He stated that "many platforms circumvent restrictions" by utilising VPNs, mirror sites, geo-blockers, and other workarounds, despite ongoing regulatory efforts, as reported by Hans India.

 Furthermore, they deceive unsuspecting participants through "illegal branding and disproportionate promises," according to the report.  Money laundering is facilitated by the use of cryptocurrencies or currency for payments, as virtual assets can present ill-gotten gains as legitimate.

 According to the report, the increased capacity to transmit and convert gaming assets into fiat currency or crypto-assets has led to an increase in money laundering and fraud.

 The DIF suggests that:

 A task force that is specifically designed to address illicit igaming
 A whitelist of authorised operators, both domestic and offshore
 A pledge from the government to the identification and prohibition of illegal operators
 A public awareness campaign to alert participants about the potential for fraudulent operations

 A potential menace to "digital nagriks"
 These warnings were reiterated in a July report from Rashtriya Raksha University.  The Security and Scientific Technical Research Association (SASTRA) of the university also advised the whitelisting of legitimate igaming platforms that adhere to Indian law.

 According to SASTRA, "illegal sites expose internet users, known in India as "digital nagriks," to unsafe online environments and cybersecurity attacks.".  "They have emerged as a hazard to India's national security... [acting] as channels for money laundering and terrorist financing.""

 Illegal online wagering is estimated to generate $100 billion annually, which is significantly greater than the legal revenue.

 SASTRA stated, "These rogue players syphon money from our economy, thereby fuelling criminal activity and leaving a trail of financial instability." This statement was reported by the New Delhi Business Standard.

 Gupta observed that the online gambling sector is essential to the future of India and, as such, requires additional protections.

 "The sector employs approximately [100,000] individuals directly and indirectly, with the potential to establish 2.5 million jobs by 2025," he stated, citing the presence of over 400 home-grown start-ups."