FATF Engagement with Indian Online Gaming Firms
The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has initiated discussions with Indian online gaming firms to address money laundering and terror financing risks associated with such companies and offshore entities. This marks the first occasion where gaming firms are directly engaged by FATF regarding these concerns.
Discussion Details
- The meeting is scheduled for a Friday and will be chaired by FATF Director Smarak Swain.
- Gaming companies such as Dream11, Baazi Games, Zupee, and WinZO are invited.
Agenda Topics
- Overview of money laundering and terror financing risks in online gaming.
- Discussion on current regulatory landscapes and FATF standards.
- Open forum for addressing industry challenges and potential mitigation strategies.
The discussion aims to enhance understanding of how customers can be protected from offshore betting and gambling operations that may indulge in money laundering.
Background and Context
- FATF is an inter-governmental body setting international standards to combat money laundering and terror financing.
- India joined FATF in 2010.
- Recent investigations, like that of Mahadev Online Book for illegal betting and money laundering, highlight the urgency of these discussions.
Legal and Regulatory Measures
- The finance ministry amended the GST law, imposing a 28% GST on full value bets and requiring offshore platforms to register for GST in India.
- Non-compliant overseas gaming platforms face access blocking in India.
Market Overview
- India has over 568 million gamers.
- The gaming sector experienced a 28% CAGR from 2019-20 to 2022-23 and is projected to generate $7.5 billion in revenue within five years.
- The illegal betting market in India manages deposits exceeding $100 billion annually.
Measures for Risk Containment
- Creation of a dedicated task force to address illegal operators.
- Development of a whitelist of legal operators.
- Efforts to counter misleading advertisements.