The government dropped a serious allegation in the Supreme Court this week. Unregulated online money games aren’t just draining wallets; they’re potentially funding terrorism and facilitating money laundering on a scale that threatens national security, as reported by Hindustan Times.
In an affidavit filed before Justices J B Pardiwala and K V Viswanathan, the Centre laid out disturbing connections between real-money gaming platforms and criminal networks. The government claims these platforms have become conduits for routing funds tied to drug trafficking, human trafficking, fraud, and weapons smuggling.
Online Money Games: The Numbers Tell a Dark Story
Indians are losing roughly ₹20,000 crore every year to online money games, with approximately 45 crore people affected. But the financial damage is just one part of this mess. Karnataka reported 32 suicides linked to online gaming between January 2023 and July 2025. On the other hand, Telangana saw seven deaths in a single month this year.
The government’s investigation revealed that gaming companies registered in small island countries open user accounts with Indian banks using proxy persons. Moreover, gaming companies deliberately misdeclare the purpose of these remittances to send user money out of India.
Terror Financing Through Gaming Apps
Analysis of Suspicious Transaction Reports and Cross Border Wire Transfer Reports exposed how offshore shell companies launder money through these gaming platforms. Furthermore, the Centre told the court it has classified material showing direct links to terror financing and offered to submit this evidence in a sealed cover.
“Unchecked expansion of online money gaming has been linked to financial fraud, money laundering, tax evasion and in some cases, the financing of terrorism, thereby posing threats to national security, public order and integrity of the State,” the government’s affidavit stated.
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Why the Ban
The Promotion and Regulation of Online Gaming Act, 2025 aims to shut down this ecosystem entirely. Companies operate from offshore jurisdictions, bypassing domestic laws and creating enforcement nightmares. Additionally, celebrity endorsements aggressively target youth and vulnerable groups through these platforms, multiplying the risks.
The Supreme Court will hear the matter again this week as multiple petitions challenge the new law.