Crackdown on online gaming firms: DGGI attaches 2400 bank accounts, freezes Rs 126 Cr

Hyderabad: Directorate General of Goods and Services Tax Intelligence (DGGI) has blocked 357 websites of illegal offshore online gaming firms and attached about 2,400 bank accounts.

The DGGI has also called out Bollywood celebrities and cricketers along with YouTube, WhatsApp, and Instagram influencers for endorsing these platforms

This follows the crackdown against offshore online gaming entities. The online money gaming industry comprises both domestic and foreign operators.

Under GST law, ‘Online Money Gaming’, being an actionable claim, is classified as a supply of ‘Goods’ and is subject to a 28% tax. Entities operating in this sector are required to register under GST.

Around 700 offshore entities involved in online money gaming/betting/gambling are under DGGI’s scanner. It has been noticed that these entities are evading GST by failing to register, concealing taxable pay-ins, and bypassing tax obligations. So far, 357 websites/URLs of illegal/non-compliant offshore online money gaming entities have been blocked by the DGGI, in coordination with the Ministry of Electronics and Information Technology (MeitY), under Section 69 of IT Act, 2000, DGGI spokesman said in a statement.

In a recent operation against some of the illegal gaming platforms, DGGI targeted and blocked bank accounts that were being used to collect money from participants, attaching nearly 2,000 bank accounts and Rs. 4 crore, in coordination with the I4C and the National Payments Corporation of India (NPCI).

In another action, 392 bank accounts linked to UPI IDs found on the websites of some of these offshore entities have been put on debit freeze and a sum totaling Rs. 122.05 crore has been provisionally attached.

Another operation against a few Indian nationals, who were running Online Money Gaming Platforms from outside India, was conducted by DGGI. The spokesman said these individuals were facilitating online money gaming to Indian customers through various such online platforms including Satguru Online Money Gaming Platform, Mahakaal Online Money Gaming Platform, and Abhi247 Online Money Gaming Platform, and are using mule bank accounts to collect money from Indian customers. DGGI has so far blocked 166 mule accounts linked with these platforms. Three such persons have been arrested till now and an investigation against more such individuals is under progress.

Non-compliance by foreign entities distorts fair competition, harms local businesses, and skews the market. These unscrupulous foreign entities circumvent restrictions by creating new web addresses. Investigations also revealed that these companies operated through ‘mule’ bank accounts to process transactions. Funds collected through mule accounts leave the potential to be funneled into illicit activities which may also be dangerous from the national security point of view.

‘It has been observed that many Bollywood celebrities and cricketers along with YouTube, WhatsApp, and Instagram influencers, are found endorsing these platforms. Therefore the public is advised to remain cautious and not engage with offshore online money gaming platforms as it may jeopardize their finances and indirectly support activities that undermine financial integrity and national security,” the spokesman said.

DGGI remains committed to proactively tackling the menace of illegal offshore gaming entities. With the upcoming IPL season, enforcement actions will be more stringent to curb illicit gaming operations. Staying informed and choosing regulated platforms is crucial for responsible gaming, the spokesman added.