DGGI Blocks 357 Illegal Offshore Online Gaming Websites in Major Crackdown

DGGI Blocks 357 Illegal Offshore Online Gaming Websites in Major Crackdown

The Directorate General of Goods and Services Tax Intelligence (DGGI) has taken stringent action against illegal offshore online money gaming platforms by blocking 357 non-compliant websites. This move is part of an intensified enforcement campaign against offshore gaming entities that have been evading taxes and operating illegally in India.

DGGI Cracks Down on Offshore Online Gaming Operators

The online money gaming industry consists of both domestic and foreign operators, with offshore entities playing a significant role. According to official reports, around 700 such offshore platforms involved in online money gaming, betting, and gambling have come under the DGGI’s scrutiny. These platforms have been found evading Goods and Services Tax (GST) by failing to register, concealing taxable pay-ins, and bypassing tax obligations, thereby causing substantial revenue losses to the Indian government.

The Ministry of Finance recently stated that these foreign gaming platforms are not only avoiding compliance with Indian tax laws but also engaging in financial misconduct by failing to declare their revenue streams. This evasion has led to a loss of billions of rupees in potential tax collections.

Seizure of Bank Accounts and Financial Crackdown

As part of its latest operations, the DGGI has targeted and blocked several bank accounts associated with these offshore entities. Nearly two thousand bank accounts have been identified as conduits for collecting money from Indian participants. A total of ₹4 crore was seized from these accounts. In addition, 392 bank accounts linked to UPI IDs found on these illegal gaming websites have been put under debit freeze. So far, the government has provisionally attached a sum of ₹122.05 crore in these accounts.

To curb financial fraud, the authorities have also blocked 166 mule accounts, which were being used to facilitate money transfers between Indian users and offshore platforms. These mule accounts played a critical role in money laundering and tax evasion. Moreover, three individuals have been arrested for their involvement in running these illegal platforms, and investigations against more individuals are ongoing.

Why is the Government Against Offshore Online Gaming?

1. Tax Evasion
Offshore gaming platforms have been consistently bypassing GST obligations. By failing to register with Indian tax authorities, these companies operate outside the regulatory framework, leading to massive revenue losses. The government has been losing billions of rupees in potential GST collections that should have been paid by these platforms.

2. Financial Fraud and Money Laundering
Illegal gaming platforms often serve as channels for financial fraud and money laundering. Many of these platforms have been found using fake accounts and digital wallets to transfer money discreetly. The recent crackdown on 166 mule accounts is an example of the measures taken to dismantle these financial networks.

3. Social and Economic Risks
Unregulated online gambling can have serious social consequences. Many users, including minors and financially vulnerable individuals, get addicted to these platforms, leading to financial distress and mental health issues. There have been numerous cases of individuals losing large sums of money, resulting in legal complications and family disputes.

4. National Security Concerns
Many offshore online gaming platforms operate from jurisdictions that do not cooperate with Indian regulatory authorities. This raises concerns over data security and national security, as these platforms may misuse users’ financial and personal information.

5. Consumer Protection Issues
Unlike registered gaming platforms, illegal offshore operators do not follow consumer protection regulations. Users who lose money or face fraud have little legal recourse, as these platforms operate outside India’s jurisdiction.

The online gaming industry in India has experienced exponential growth in recent years. According to industry reports, the sector’s revenue in FY 2023-24 is estimated to be around ₹16,000 crore. While regulated gaming platforms contribute significantly to the country’s tax revenue, offshore platforms continue to operate illegally, depriving the government of legitimate tax collections.

The Indian government has been working towards regulating the industry effectively. The recent imposition of a 28% GST on online gaming transactions aims to bring transparency and ensure that all stakeholders comply with tax laws.

In light of the ongoing crackdown, the government has issued a public advisory urging citizens to avoid engaging with offshore online money gaming platforms. Users who participate in these platforms risk financial losses, legal consequences, and potential cyber security threats.

The government has also urged internet service providers (ISPs) and financial institutions to enhance their monitoring mechanisms to detect and block illegal transactions linked to these platforms.

The DGGI’s decisive action against offshore online gaming platforms marks a significant step in ensuring compliance with tax regulations and curbing financial malpractices. While the online gaming industry continues to flourish, the government remains committed to distinguishing legal and regulated operators from illegal entities that exploit loopholes. The crackdown is expected to send a strong message to offshore gaming companies and reinforce India’s commitment to financial integrity and consumer protection.

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