New Delhi, November 26, 2025 – The Central government has informed the Supreme Court that unregulated online gaming apps in India have been linked to terror financing and money laundering, underscoring the urgent need for legislative intervention to regulate the sector. The government’s submission comes in the context of the recently enacted Promotion and Regulation of Online Gaming Act, 2025, which seeks to bring oversight to online gaming platforms operating within and across Indian jurisdictions.

A bench comprising Justices J B Pardiwala and K V Viswanathan indicated that it will aim to take up the matter for further hearing on Thursday. In its affidavit, the Centre highlighted the dangers posed by unchecked online money gaming, stating that such platforms are associated with financial fraud, tax evasion, money laundering, and in some cases, the financing of terrorism, thereby presenting serious risks to national security, public order, and the integrity of the state.

The government drew attention to the aggressive marketing strategies adopted by online gaming companies, including pervasive advertisement campaigns, celebrity endorsements, and influencer promotions, which amplify the reach and impact of these platforms, particularly among youth and other vulnerable groups. The affidavit stressed that this unregulated proliferation, coupled with the digital and transnational nature of these apps, makes enforcement extremely challenging under conventional state and central regulations.

“The online gaming industry operates largely from offshore jurisdictions, bypassing domestic laws and undermining state-level regulatory frameworks, creating significant challenges in terms of extra-territorial jurisdiction and uniform enforcement across states,” the Centre noted. It said that these conditions made it imperative for the Union government to assume legislative competence over the sector in order to create a secure, structured, and innovation-friendly digital environment, while mitigating risks to public health, consumer protection, public morality, and financial sovereignty.

The affidavit explicitly claimed, “There is enough material and data indicating that the unregulated online gaming sector has links with terror financing and money laundering.” The government offered to provide additional details under a sealed cover, citing sensitive information pertaining to these activities.

The Centre argued that online money games have caused extensive financial and social damage across India. According to the affidavit, the general public has lost approximately ₹20,000 crore per year to companies offering such games, affecting roughly 45 crore individuals nationwide. The submission also drew attention to the human cost of these losses, citing data from states such as Karnataka, Telangana, and Tamil Nadu. Between January 2023 and July 2025, Karnataka reportedly recorded 32 suicides linked to online money games, while Telangana reported 20 such suicides in the previous year alone, including seven deaths in a single month. Tamil Nadu’s Academic and Medical Committee noted over 30 suicides related to online money games in recent years.

The Centre emphasized that the widespread financial losses arising from online gaming not only impact the economic stability of families but also contribute to a significant mental health crisis, resulting in suicides across various regions. The affidavit stated, “If data were aggregated from all states, the overall figure of suicides would be glaringly high and shocking, and thousands of crores of rupees are lost to society annually due to online money gaming.”

Given these factors, the Centre justified the enactment of a complete prohibition on unregulated online money gamesunder the new legislation. It argued that these platforms are heavily reliant on digital access and online connectivity to reach their end users, primarily the youth and other vulnerable populations, making regulation essential to protect public interest.

The Promotion and Regulation of Online Gaming Act, 2025 was introduced to create a regulated framework for online gaming in India. The law aims to oversee platforms that facilitate monetary gaming, ensure consumer protection, and prevent financial crimes including fraud, money laundering, and the diversion of funds toward terror financing. The Act also provides a mechanism to address the public health and safety concerns posed by unregulated gaming platforms.

The Supreme Court had previously consolidated all petitions from various high courts challenging the new legislation in September 2025. The Centre’s affidavit now provides the Court with detailed justification for the law, emphasizing that regulation is not merely desirable but necessary in the national interest, given the scale of economic and social harm caused by online money games.

The affidavit highlighted several technical and operational aspects of online gaming that make regulation imperative. These include the algorithms used in gaming platforms, the cross-border nature of operations, and the fact that most online games bypass local regulations, creating enforcement challenges. By enacting the 2025 legislation, the Centre intends to standardize regulations, improve oversight, and create a secure environment for legitimate online gaming operations, while simultaneously preventing their misuse for illegal activities.

Furthermore, the Centre stressed the societal impact of unregulated online gaming, noting that families, communities, and vulnerable populations have been adversely affected. The government described the negative consequences as extending beyond financial losses to include emotional trauma, social destabilization, and erosion of public trust in digital platforms.

The Supreme Court’s engagement with the matter is expected to clarify the legal parameters of online gaming regulation, including the powers of the Union and state governments, the scope of permissible gaming activities, and mechanisms to prevent financial crimes and public harm. The Centre’s submission underscores the urgency of judicial oversight to ensure that unregulated online platforms do not continue to pose threats to national security and public welfare.

In summary, the affidavit filed by the Centre before the Supreme Court paints a stark picture of the risks associated with unregulated online gaming apps, including their links to terror financing, money laundering, financial fraud, tax evasion, and suicides. It highlights the urgency for legislation, justifies the provisions of the Promotion and Regulation of Online Gaming Act, 2025, and underscores the need for a regulated, secure, and transparent online gaming environment in India.

The matter is set for further consideration by the Supreme Court on Thursday, where the Court is likely to examine the Centre’s affidavit, the legal validity of the 2025 Act, and its implications for online gaming operations, consumer protection, and national security.

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