The Centre has informed the Supreme Court that real-money online games pose serious national security and financial risks, claiming that such platforms have become conduits for terror financing and large-scale money laundering. In an affidavit filed in response to petitions moved by several gaming companies, the Union government described these platforms as part of a wider criminal network involving hawala transactions, tax evasion, shell companies registered abroad, and the misuse of crypto-based payment routes.
The government, offering to present confidential records in a sealed cover, said data from financial probes shows an alarming surge in suspicious activity linked to gaming accounts. According to its submission, the number of suspicious transaction reports associated with online gaming jumped from just one case in 2019–20 to 239 in 2023–24, covering more than 7,000 bank accounts. Both incoming and outgoing transfers through these accounts reportedly multiplied nearly twenty times within the same period. The affidavit added that outward remittances tied to online gaming exceeded ₹5,700 crore in 2023–24, with a significant portion of the money flowing to foreign jurisdictions known for weak regulatory scrutiny.
These financial patterns, the Centre argued, suggest that the funds often represent disguised transactions layered through offshore entities posing threats related to capital flight, laundering of illegal proceeds, and possible diversion of money for extremist activities. It also highlighted the social fallout of real-money gaming, pointing to a rising number of suicides reportedly triggered by gambling losses. The affidavit cited dozens of such cases from Karnataka, Telangana and Tamil Nadu, arguing that the psychological and economic harm to vulnerable individuals reinforces the need for strict regulation.
Rejecting the gaming companies’ contention that their business falls under the constitutional right to carry out trade or occupation, the government maintained that activities undermining public order, national security and public health cannot claim protection under Article 19(1)(g). It said that restrictions including bans are reasonable and necessary to curb the dangers associated with unregulated money gaming.
The Centre also clarified that its stance does not target e-sports, casual games or online skill-based formats that do not involve monetary stakes. Those categories, it said, remain unaffected and continue to be permissible.
The Supreme Court will now examine the government’s affidavit as it hears challenges to the regulatory framework governing real-money online gaming.
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