India pushes for global regulation of online gaming to combat money laundering

Neha Soni September 25, 2024

India is at the Financial Action Task Force (FATF) pushing for online gaming companies to be included under the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) framework, according to a report.

The report, quoting an official, said that India will once again present its case on the need for these platforms to be regulated under global standards. Citing platforms like Mahadev apps, which have been used for money laundering, the government’s objective is clarified as protection from such practices, and not hindering the growth of the rapidly growing sector.

According to the report, the government has initiated internal discussions and is actively exploring the means to enforce stringent Know Your Customer (KYC) protocols and the mandatory reporting of suspicious activities by online gaming companies.

What will be discussed in FATF?

The centre will be bringing up this issue for discussion again at the upcoming meeting of FATF in Paris. The officials will be illustrating cases that highlight the misuse of online gaming platforms wherein they have been used for illegal activities like money laundering.

If the FATF brings the sector under the purview of the AML/CFT framework, gaming platforms could minimise risk of illegal activities as they would be required to adhere to KYC norms and report suspicious transactions.

A person familiar with the development reportedly said, “We are concerned about the gaming sector as it has cross border implications as well, because money transfer can happen between jurisdictions and there can be gaming apps which are run from abroad which have Indian clientele.”

The development comes at a time in the country when authorities continue to unearth and bust various money laundering scams that involve online gaming platforms. One such case was the Mahadev betting scam, it involved multiple websites and was used to launder money abroad via cryptocurrency.

To halt these, the government has mandated that all overseas online gaming companies need to register in India. The centre has also banned numerous websites from abroad in India for not complying with the country’s provisions of anti-money laundering laws.

Stay ahead in iGaming! Subscribe to SiGMA’s Top 10 News and Weekly Newsletter for the latest updates and exclusive offers