India Moves to Ban Real-Money Online Gaming Over Terror Links, Addiction Concerns

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In a decisive move, the Indian government has informed the Supreme Court that real-money online gaming has a proven link to terror financing and money laundering. The Centre has offered to share classified data supporting these claims, citing a surge in suspicious transactions and a dramatic escalation in outward remittances. The government's affidavit highlights the risks of online gaming platforms, which are being used as high-risk channels for laundering proceeds from crime. Investigations have revealed the recruitment of money mules through social media and messaging apps, with widespread use of front persons to shield criminal activities. The data shows a significant increase in suspicious transactions, from one in 2019-20 to 239 in 2023-24, involving 7,056 accounts. Outward remittances through real-money gaming channels exceeded ₹5,700 crore in FY 2023-24, with multiple Indian entities sending large sums to foreign jurisdictions with weak financial oversight. The Centre has argued that the real-money gaming ecosystem has severe public health implications, causing addiction, debt traps, and even driving dozens to suicide. The government has estimated that ₹20,000 crore is lost annually by users to real-money gaming companies, affecting approximately 45 crore Indians. The Centre has invoked Entries 31 and 97 of List I of the Constitution, asserting that regulation of the digital sphere, including online gaming, falls within Parliament's domain. It has warned that state-wise attempts to regulate the sector have led to regulatory chaos, with conflicting approaches causing raids, FIRs, and litigation across jurisdictions. The government has rejected the industry's reliance on Article 19(1)(g), which guarantees the right to practice any profession or carry on any occupation, trade, or business. It has argued that offering real-money gaming platforms is outside the scope of constitutionally protected trade and that reasonable restrictions may include prohibition, particularly when national security, public order, and public health are threatened. The Centre has clarified that the law does not ban all online gaming, but only prohibits real-money games. E-sports and other non-money online games remain fully permitted. The government has set the stage for a constitutional battle over competence, federalism, digital regulation, and the future of India's online gaming industry.