The All-India Gaming Federation (AIGF), the apex industry body for online gaming in India, has intensified its call for a comprehensive national framework to effectively curb the proliferation of illegal offshore gambling platforms. This urgent appeal comes amidst growing concerns over the significant financial and social risks posed by these unregulated entities.
The Growing Threat of Offshore Gambling
Offshore gambling platforms, often operating from jurisdictions with minimal regulatory oversight such as Curaçao, Malta, and Cyprus, have become a major concern for the Indian gaming industry and policymakers alike.
These platforms frequently bypass Indian taxation laws, evade regulatory oversight, and offer no recourse for consumers, exposing users to significant financial fraud, addiction risks, and even national security threats due due to potential money laundering. Reports indicate that illegal betting activities are causing substantial tax losses to the Indian exchequer, with estimates running into billions of dollars annually.
Limitations of State-Level Initiatives
While the AIGF commends state-level initiatives, such as Karnataka’s recent proposal to establish a dedicated Online Gaming and Betting Regulatory Authority, it emphasizes that such fragmented efforts are insufficient to tackle the cross-border nature of offshore gambling. These entities operate beyond India’s jurisdiction, making it difficult for individual states to effectively regulate and enforce laws against them. The AIGF argues that a unified, national approach is critical to create a consistent regulatory environment and a strong deterrent against illegal operators.
AIGF’s Vision for a National Framework
The AIGF advocates for a robust national framework that brings together all relevant stakeholders, including government bodies, industry players, and law enforcement agencies. Key elements of such a framework, as envisioned by the AIGF and other industry associations, include:
- Clear Distinction Between Skill and Chance: A precise legal distinction between “games of skill” and “games of chance” is crucial for regulatory clarity and effective enforcement. Games of skill should be regulated and fostered, while games of chance (gambling) should remain subject to strict prohibitions or be brought under a regulated licensing regime where permitted.
- Mandatory Registration and Compliance: Offshore platforms targeting Indian users must be mandated to register with Indian authorities, establish a physical presence in the country, and adhere to all Indian laws, including tax regulations and Know Your Customer (KYC) norms.
- Stronger Enforcement Mechanisms: Enhanced powers and resources for law enforcement agencies to investigate, prosecute, and block illegal offshore platforms and their facilitators are essential. This includes measures to combat surrogate advertising and the use of “mule accounts” for illicit transactions.
- Consumer Protection: The framework should prioritize consumer safety through stringent age verification, responsible gaming practices (e.g., self-exclusion options, deposit limits), transparent terms and conditions, and robust grievance redressal mechanisms.
- International Cooperation: Given the cross-border nature of the problem, India should actively engage with international regulators and law enforcement agencies to share information and coordinate efforts against illegal offshore gambling.
- Public Awareness Campaigns: Educating the public about the risks associated with illegal offshore platforms and distinguishing them from legitimate, regulated online skill gaming companies is vital.
Impact on the Domestic Gaming Industry
The proliferation of unregulated offshore gambling poses a direct threat to the legitimate Indian online skill gaming industry. Domestic operators, who adhere to Indian laws and pay taxes, face an uneven playing field due to the “no-GST” claims and often higher payouts offered by illegal platforms. This has led to a significant migration of Indian players to offshore platforms, impacting the growth and revenue of the domestic industry and resulting in substantial tax losses for the government.
The AIGF believes that a comprehensive national framework is not just about curbing illegal activities but also about fostering a safe, transparent, and sustainable online gaming ecosystem in India that protects consumers, generates revenue for the exchequer, and supports the growth of the legitimate gaming sector.
