Government aims to include online gaming companies within the PMLA framework.

The Indian government is nearing the completion of a plan to bring online real-money gaming platforms like Dream11, Games24x7, and Winzo under the purview of anti-money laundering regulations, according to sources cited by The Indian Express. This initiative, led by the Ministry of Finance and currently under inter-ministerial review, could classify these companies as “reporting entities” under the Prevention of Money Laundering Act (PMLA), 2002, subjecting them to rigorous obligations such as know-your-customer (KYC) protocols and the monitoring and reporting of suspicious transactions.

Under the PMLA, reporting entities—typically financial institutions like banks, intermediaries, or individuals in designated professions—must comply with specific record-keeping and reporting duties. These include submitting client and transaction details to the Financial Intelligence Unit-India (FIU-IND), part of the Finance Ministry, and maintaining records of all transactions, client identity documents, beneficial ownership details, account files, and business correspondence. Such entities must also adhere to anti-money laundering and counter-terrorism financing (AML/CFT) standards aligned with the Financial Action Task Force (FATF), the global anti-money laundering watchdog.

This move echoes a 2023 decision by the Finance Ministry to designate virtual digital assets (VDAs), primarily targeting cryptocurrency firms, as reporting entities. If finalized, this would be the second significant regulatory step against gaming firms, following the imposition of a 28 percent Goods and Services Tax (GST) on full user deposits in 2023. It also comes after the IT Ministry introduced rules to govern the sector in 2023, which remain stalled and unenforceable due to procedural hurdles.

A senior government official, speaking anonymously, explained the rationale: “We believe there is a lot of unaccounted money circulating within the online gaming apps and that has to be curtailed. So, the government is moving to bring them under the PMLA ambit and require them to track and report suspicious transactions.”

A March 2025 report by FICCI and EY revealed that India’s online gaming industry generated approximately $2.7 billion in revenue in 2024. These companies typically earn by taking a percentage of users’ winnings. The report noted that over 155 million Indians participated in real-money gaming activities—such as fantasy sports, rummy, poker, and other transaction-based games—in 2024, a 10 percent rise from the previous year, with about 110 million playing daily.

Gaming industry insiders acknowledged that domestic firms are prepared to comply with PMLA requirements but expressed concerns about offshore betting and gambling platforms, which they believe will evade these rules. This issue surfaced previously during the 2023 GST rollout. “By conservative estimates, there is anywhere around $25 billion to $30 billion worth of money circulating on these offshore betting platforms. Much of that is unaccounted for because the government currently does not have a way to rein them in,” a senior gaming executive said. “While domestic gaming companies are subjected to onerous requirements, with first the GST and the potential inclusion in PMLA, the offshore firms are making a lot of money.”

The Ministry of Finance did not respond to inquiries from The Indian Express. Meanwhile, the government has been cracking down on non-compliant gaming platforms. This month, it told Parliament that the IT Ministry issued over 1,400 blocking orders for online betting, gambling, and gaming websites between 2022 and February 2025. The Directorate General of GST Intelligence (DGGI) has also blocked more than 350 links tied to illegal offshore real-money gaming platforms. However, industry executives argue that such measures are ineffective, as blocked platforms quickly relaunch with new domains. “Blocking their domains has not been effective, since they create new landing pages within minutes of being taken down,” the same executive noted.

Compounding the sector’s challenges is the stalled implementation of the IT Ministry’s April 2023 amendments to the Information Technology (IT) Rules, intended to regulate online gaming. These rules proposed self-regulatory bodies to assess game legitimacy under government oversight, but progress has faltered. The ministry rejected some self-regulation proposals over potential industry influence and conflicts of interest. In a submission to the Madras High Court—where challenges to Tamil Nadu’s online gaming law are being heard—the IT Ministry admitted that the IT Rules provisions remain “unenforceable” without designated self-regulatory bodies, leaving the sector in regulatory limbo.