The recent sudden announcement by the Government of India of a gold game ban had had a severe impact on the industry, and some industry giants had joined forces to petition the Supreme Court of India against the bill for cutting hundreds of thousands of workers off the means of subsistence and for causing billions of dollars in national tax losses. In response, the Prime Minister of India, Narendra Modi, stated in a paper submitted to the Supreme Court that unregulated gold games were clearly linked to financial fraud, money-laundering, tax evasion and terrorist financing and posed a threat to national security and public order.
According to the Government of India, online genuine gold game users lose about Rs. 200 billion (approximately $2.24 billion) per year in such games and about 450 million Indian people are affected by them. According to the affidavit of the Ministry of Electronic Information Technology of India, over Rs. 57 billion (approximately US$ 638 million) was transferred from the 2023-24 fiscal year to foreign countries through the genuine gold game, and a number of Indian entities transferred large amounts of money to extraterritorial jurisdictions with weak financial regulation. The response was in response to a number of petitions challenging the Act on the Promotion and Regulation of Online Games 2025. The Act, which was approved by Prime Minister Modi of India on 22 August (not yet in force), provides for “total prohibition” in India, regardless of the skill or luck type of the game, and characterizes the offence as a criminal offence punishable by immediate arrest without bail. On-line games argue that dream sports, as a category of independent games, have been recognized by a number of judicial decisions and that Governments should regulate rather than prohibit it altogether.
The Government characterizes the ecosystem of online gold games as a “tumour” and accuses them of contributing to systematic criminal activities, including tax evasion, puppet accounts, the transfer of funds through encrypted money channels, the hawala underground exchange system and the operation of offshore shell companies. Analysis of government expenditure, suspicious transaction reports and cross-border wire transfer data shows that online gold games are mostly registered in small island countries and their users open accounts as agents in the Bank of India. When the funds paid by the users were sent out of India, the declared purposes were overstated. In the document, the Government states: “Some jurisdictions that receive remittances are known for their weak regulation, raising concerns about stratification of money-laundering and cross-border financial flows. Some domestic companies have shown very high foreign exchange amounts, suggesting that these payments require more stringent regulatory review.”
