New Delhi, Nov 26: The Centre has told the Supreme Court that unregulated online gaming apps have links with terror financing and money laundering and justified bringing a law to regulate these virtual platforms.
A bench of Justices J B Pardiwala and K V Viswanathan said it will try to take up the matter for hearing on Thursday.
“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,” an affidavit filed by the Centre has said.
It has added that online gaming systems are often aggressively marketed through pervasive advertisement campaigns, celebrity and influencer endorsements, amplifying their reach and impact, especially among youngsters and vulnerable groups.
The government has said that considering the deleterious and negative impact of online money gaming on individuals, families, the society and the country, and given the technical aspects, including the very nature of the electronic medium used for online money games, the algorithms applied and the national and the trans-national networks involved therein, and considering that they operate from offshore jurisdictions — bypassing domestic laws, undermining state-level regulations and presenting enforcement challenges in terms of extra-territorial jurisdiction and inter-state consistencies — the Promotion and Regulation of Online Gaming Act, 2025 was enacted.
It said it was expedient in the public interest for the government to assume legislative competence over the online gaming sector and ensure the creation of a secure, structured and innovation-friendly digital environment, while addressing the associated risks to public health, consumer health, public morality and financial sovereignty.
“There is enough material and data that indicates that the unregulated online gaming sector has links with terror financing and money laundering,” it has said, while offering to give more details in a sealed cover on links of terror financing and money laundering.
“When the society, its national security, financial sovereignty, health and public order are at stake and is directly threatened by online money games, the same cannot be permitted to be offered or facilitated, considering the widespread and harmful impact it causes,” the government has said.
It has pointed out that the online gaming industry is unregulated and completely unchecked by way of a formal legislation and the industry and its products are not restricted to the physical boundaries of a particular State.
“They are solely dependent on the online digital sphere, without which the end consumer, mainly the youth and vulnerable, cannot be reached,” it has said.
Justifying complete prohibition, the government has said roughly, the general public has lost approximately Rs 20,000 crore per year to companies offering online money games and approximately 45 crore individuals have been affected by online money games.
“Between January 2023 and July 2025, the state of Karnataka reported 32 suicides linked to online money games. The state of Telangana reported 20 suicides linked to online money games in last year alone. Even recently, seven deaths in one month were reported in the state of Telangana. The Academic and Medical Committee from the state of Tamil Nadu notes more than 30 suicides related to online money games in recent years,” the affidavit has said.
The Centre has said the financial losses arising from online money games cause widespread and rampant suicides across the country.
“If data is gathered from each state separately, then the overall figure of suicides would be glaring and shocking. Thousands of crores of money are lost by the society linked to online money games,” it has said.
The top court had in September transferred to itself all matters from the high courts across the country challenging the new enactment.–(PTI)
