While online gaming is seen as entertainment, it is also a lucrative industry with many illegal businesses. A recent investigation from Indian authorities found that many overseas gaming platforms are evading taxes and siphoning crores of rupees from the country using illegal methods.
How Money is Being Stolen From Indians
According to a ToI report, the GST authorities have revealed that hundreds of overseas gaming and betting apps operate in India without paying taxes. Among the numerous suspects, Parimatch, a Cyprus-based firm, is at the centre as it runs one of the largest networks related to local sports leagues on television. The Directorate General of Goods and Services Tax Intelligence (DGGI) has uncovered and dismantled one network linked to Parimatch.
The investigation found that the firm moved out Rs 700 crore from Indian users of gaming apps. This large sum of money was then funnelled out by using cryptocurrency. Reportedly, most similar online gaming firms are based out of tax havens and operate illegally in India. Parimatch’s gaming and betting services amassed massive funds that were later channelled through bank accounts of numerous shell companies. This led the DGGI to freeze over 400 bank accounts, although the investigation soon reached a dead end following the arrest of dummy directors of a shell firm.
Online gaming is a fast-growing industry in India. However, the recent GST probe has discovered the dark side of the gaming market. This serious issue needs to be addressed quickly by the industry watchdogs and the stakeholders. Strict measures should help regulate the online gaming sector and ensure that foreign gaming firms comply with local tax laws. Indian players should also engage in online gaming responsibly and avoid such illegal platforms that launder money.