In a sweeping move to curb tax evasion and illegal operations in the online gaming industry, the Directorate General of GST Intelligence (DGGI) has blocked 357 offshore gaming websites and frozen more than 2,400 bank accounts linked to suspicious transactions, the Finance Ministry announced on Saturday.
This development marks one of the most significant crackdowns against unregulated online gaming entities operating beyond India’s jurisdiction. According to officials, these websites were facilitating real-money gaming for Indian users without registering under Indian tax laws, thereby evading Goods and Services Tax (GST) on user deposits, known as “pay-ins”.
700 Gaming Websites Under the Scanner
The DGGI has also stepped up investigations against more than 700 offshore gaming platforms accused of similar wrongdoing. Officials said that most of these websites not only evaded mandatory registration as tax collectors but also actively hid taxable financial inflows from Indian consumers.
“The intention is clear – to avoid paying taxes while operating in a grey area of the digital economy,” a senior official said. “Such entities are being investigated for evasion and potentially laundering money using proxy accounts.”
Operations Run by Indian Nationals from Abroad
Adding a surprising twist to the investigation, intelligence officials discovered that some Indian nationals were operating these gaming sites abroad. Platforms like Satguru Online Money Gaming, Mahakaal, and Abhi247 were among them. These sites mainly targeted Indian users, luring them to place real-money bets with promises of quick rewards.
Investigators also uncovered a complex network of “mule” bank accounts – accounts used to collect customer deposits and obscure the trail of funds. As of now, 166 such accounts have been frozen, and three individuals have been arrested in connection with the racket. The probe is ongoing, and authorities indicate that more arrests are likely.
Also Read: The Rise of Online Gaming: Addressing Concerns and Celebrating Growth
Celebrities and Influencers in the Spotlight
The Ministry of Finance also put out a warning to the public, pointing out that most of the online gaming platforms under investigation have been endorsed by popular celebrities. These include Bollywood stars, cricketers, and social media influencers on platforms like YouTube, Instagram, and WhatsApp.
The ministry warned that associating with such platforms not only risks users’ financial security but may inadvertently support operations that threaten national security and financial integrity.
“We urge the public to remain vigilant and avoid engaging with unverified online gaming platforms,” the statement said, adding that any association with such entities could lead to legal repercussions under India’s anti-money laundering and tax laws.
National Push to Regulate Digital Gaming
This most recent crackdown is in line with India’s larger plan to control the quickly expanding online gaming industry, which has witnessed a recent spike in both user engagement and capital inflow. A uniform 28% tax on real-money gaming transactions has been discussed by the GST Council in the past; this proposal has caused division among industry participants.
Tax authorities are of the view that more stringent regulations are necessary to prevent loss of tax funds and safeguard players from exploitation. Industry associations are, however, requesting clearer direction to distinguish between skill games and gambling since it is not certain in the law what the two are.
The government has made it clear: non-compliance with India’s tax laws in the digital domain will be met with decisive action. Users, platforms, and promoters alike are now on notice.
Also Read: Women Make Up Just 12-14% of India’s Gaming Workforce: AIGDF Report
