The Indian government has intensified its crackdown on offshore online gaming platforms, identifying 642 entities suspected of tax evasion. These platforms, offering real-money gaming, betting, and gambling services, have been flagged by the Directorate General of GST Intelligence (DGGI). Many of these entities were found uncooperative during investigations, prompting authorities to inform the Ministry of Electronics and IT for website blocking under the IGST Act, 2017.
The Surge of Offshore Betting Platforms
In recent years, offshore entities offering online betting and gambling services have tapped into the Indian market. Their appeal lies in their accessibility and lack of stringent regulations, which contrasts with domestic operators who face heavy scrutiny. However, these foreign platforms are often unregulated, raising issues around potential tax evasion and unlawful activities.
The RMG Sector and Regulatory Challenges in India
The Real Money Gaming (RMG) sector in India has grown exponentially, driven by increased internet penetration and smartphone usage. From fantasy sports platforms to online poker and betting, this industry has attracted millions of players and substantial investments. However, the rapid expansion of RMG has also sparked regulatory challenges, including concerns over addiction, money laundering, and tax evasion. The legal ambiguity surrounding RMG—categorized differently across states—complicates enforcement and compliance, creating an uneven playing field for stakeholders
India lacks a nationwide regulatory framework to govern RMG, leading to fragmented oversight by individual states. While some states have embraced licensing systems, others have imposed outright bans, creating inconsistencies that offshore entities exploit.
“DGGI does not have any reciprocal arrangements with foreign governments. However, 642 offshore entities providing online money gaming/betting/gambling have been identified till date for investigation,” said Minister of State for Finance Pankaj Chaudhary said in the Lok Sabha.
Record Tax Evasion Unearthed in Online Gaming Sector
The scale of tax evasion in the online money gaming industry has reached unprecedented levels. According to media reports, the DGGI uncovered the highest-ever GST evasion in this sector, amounting to ₹81,875 crore in FY24 across 78 cases. This discovery highlights the challenges posed by both offshore operators and domestic non-compliance, emphasizing the urgent need for a robust regulatory framework to prevent revenue losses and ensure accountability in the sector.