Online games involving real money linked to terror financing, Centre tells apex court

ACCORDING TO GOVT DATA, AROUND 45 CRORE INDIANS HAVE BEEN AFFECTED BY SUCH ONLINE GAMES, WITH ₹20,000 CRORE BEING LOST ANNUALLY

- Utkarsh Anand

The Union government on Tuesday told the Supreme Court that unregulated real-money online gaming has demonstrable links to terror financing and money laundering, offering to share classified material showing the specific nature of these connections as it mounted a vigorous defence of Parliament's decision to ban such games entirely.

In a detailed affidavit responding to transfer petitions filed by gaming companies, including Head Digital Works Pvt Ltd, the Centre described the online real-money gaming ecosystem as a "menace" that has enabled systematic criminal activity involving tax evasion, mule accounts, crypto-routed fund diversion, hawala operations and offshore shell entities.

"There is enough material and data that indicates that the unregulated online gaming sector have links with terror financing and money laundering," the affidavit stated. "Should this Hon'ble Court direct, the respondent is also willing to place the data pertaining to money laundering and terror financing links to online money games in a sealed cover for the perusal of this Hon'ble Court."

The government cited inputs verified across multiple ministries and enforcement agencies, including analyses of Suspicious Transaction Reports (STR) and Cross Border Wire Transfer Reports. It said online gaming platforms present high-risk channels for laundering proceeds from drug trafficking, fraud, human trafficking and weapons smuggling.

Investigations revealed the use of front persons such as students, homemakers and retired individuals whose bank accounts serve as identity shields for criminal organisations, the affidavit said. It noted widespread recruitment of money mules through social media and messaging apps.