The Union government is allegedly finalising a proposal aimed at bringing online real-money gaming firms such as Dream11, Games24x7 and Winzo under the Prevention of Money Laundering Act (PMLA) to enforce KYC requirements and tracking of suspicious transactions, reported The Indian Express.
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The proposal, helmed by the ministry of finance, could result in such firms being denoted as “reporting entities” under PMLA. The Act says that reporting entities have certain record-keeping and reporting obligations as financial institutions.
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These reporting entities can range from banks, financial intermediaries to people belonging to a designated business or profession.
Under PMLA, a reporting entity would be required to provide information about its clients and transactions to the ministry of finance’s intelligence unit. They would also have to comply with certain obligations such as maintaining a record of transactions, identity proof documents of clients and beneficial owners, account files and business correspondence of their clients.
The online gaming firms, if subjected to PMLA rules would have to work within the norms set by global money laundering watchdog Financial Action Task Force (FATF) and comply with anti-money laundering and countering the financing of terrorism (AML/CFT) rules.
IT ministry’s attempts to regulate online gaming sector
In an ongoing case in the Madras high court, the IT Ministry, in a submission, said that the IT Rules provisions related to the online gaming sector were not enforceable since the ministry had not designated any self- regulatory bodies.
In April 2023, the ministry introduced rules for online gaming, enabling the establishment of self-regulatory bodies to assess the legitimacy of online games, under government oversight, along with other provisions.
The Centre had also informed parliament that the IT Ministry had issued more than 1,400 blocking orders related to online gaming websites from 2022 to February of 2025.