The government has already initiated internal discussions and is examining various options that would require the gaming companies to adopt strict Know Your Customer norms and stringent reporting of suspicious transactions to the agencies.
New Delhi will once again place its case in the next meeting of the global anti-money laundering body in Paris, people familiar with the matter said.
“India will again present its case on how the online gaming platforms were being misused and why these should be under the ambit of the global standard,” a senior official told ET. citing concerns over illicit funds laundered through platforms like Mahadev Apps.
The policy framework on which the government is working is not to stifle the sector but to secure it from the threat of money laundering, the official said. Once the global body admits the sector within the AML/CFT framework it will face stringent Know Your Customer (KYC) norms and reporting requirements on suspicious transactions. It will have to provide details of beneficial owners.
Last year the Enforcement Directorate (ED) busted a massive network facilitating illegal betting on various games through the Mahadev Online Book platform.
This platform offered a range of card games and online cricket but ED maintains it was involved in match-fixing and money laundering through cryptocurrency. “We are concerned about the gaming sector as it has cross border implications as well, because money transfer can happen between jurisdictions and there can be gaming apps which are run from abroad which have Indian clientele,” another senior official told ET.
The government has already made it mandatory for foreign online gaming companies to register in India, but most are yet to comply.
The government had in March, 2023 brought specific activities related to virtual digital assets under the purview of the Prevention of Money Laundering Act, 2002. While there were initial apprehensions that online gaming may be required to report under PMLA, as some gaming companies were dealing with cryptos, however the compliance burden was restricted to crypto exchanges and gaming companies are not yet a reporting entity under PMLA.