India Detects INR700bn in Illegal Gaming Transactions

India’s tax intelligence authorities have identified INR700 billion (US$7.4 billion) in transactions connected to illegal online gaming and betting during a single financial year and have proposed new payment-data measures aimed at helping investigators trace the networks involved.

The figure relates to transactions detected by the Directorate General of GST Intelligence (DGGI). It does not represent operator revenue, confirmed tax evasion or the final amount of revenue lost by the government. The precise level of government revenue loss remains under investigation, according to The Economic Times.

The findings followed a 14-month investigation into illegal online gaming and betting networks that were allegedly being used for money laundering. Earlier this month, the DGGI submitted its report to the Central Board of Indirect Taxes and Customs, according to the newspaper, which cited officials familiar with the investigation.

Payment Data Changes Proposed

As part of its recommendations, the DGGI has proposed changes to the information recorded during online payments.

The agency wants payment records to show the website that directed a user to make a particular transaction. It has also recommended that all bank accounts connected to a website's goods and services tax registration be disclosed, allowing authorities to identify accounts used to receive, move or layer funds.

At present, banks and payment gateways generally record the merchant that receives a payment. However, illegal betting websites may direct users to proxy merchant companies, meaning investigators must separately establish whether those merchants were collecting funds on behalf of an online gaming platform.

Several issues surrounding the proposed system have yet to be resolved. Authorities still need to decide whether gaming websites, payment gateways, aggregators or banks would be responsible for collecting and retaining the required information. The method for verifying the website that initiated a transaction must also be determined.

Consultation Process Begins

The recommendations are currently under consultation because the proposed requirements could create additional due-diligence obligations for banks and payment companies.

The consultation will examine how the new information requirements could be introduced and which parties would ultimately be responsible for meeting them.

The DGGI's investigation covered one financial year and identified INR700 billion in transactions associated with the illegal online gaming and betting networks under review.

Online Gaming Law Provides Enforcement Framework

India's Promotion and Regulation of Online Gaming Act, 2025, prohibits online money games and prevents banks and payment systems from processing transactions connected with such activity.

The rules supporting the legislation came into force on May 1, 2026.

The law provides the framework for restricting online money gaming and related payment activity. The DGGI's investigation and proposed reporting measures form part of enforcement efforts under this wider legal structure.

Investigation Examines Possible Money Laundering

The DGGI's 14-month investigation examined illegal online gaming and betting networks that were allegedly used for money laundering.

Its report to the Central Board of Indirect Taxes and Customs addressed both the scale of the transactions identified and concerns regarding their possible use in illicit financial activity.

However, authorities have not yet established the exact amount of revenue lost by the government. The INR700 billion figure reflects the value of transactions identified during the investigation and should not be interpreted as a final calculation of tax evasion or government losses.

Authorities Consider Next Steps

The DGGI's recommendations will continue to be examined through the consultation process.

Authorities must still determine how the proposed payment-data requirements would operate, who would be responsible for recording and maintaining the information, and how the website behind a transaction would be identified and verified.

The proposed measures are intended to help uncover the networks used to route funds connected with illegal online gaming and betting. The DGGI identified INR700 billion in related transactions during one financial year, while the exact financial impact on government revenue remains under investigation.