28% GST & mandatory IGST registration: How India is plugging offshore gaming loopholes

As illegal offshore betting platforms increasingly exploit regulatory loopholes in India’s digital economy, the Centre has intensified efforts to contain their impact. In response to a growing digital and financial threat, the Ministry of Electronics and Information Technology (MeitY) and allied agencies have stepped up action against these entities that operate beyond India’s tax and compliance frameworks.

Addressing an unstarred question in the Lok Sabha, Jitin Prasada, Minister of State for Electronics and IT, reaffirmed the government’s commitment to an “open, safe, trusted and accountable internet.” Among the critical measures taken is the empowerment of the Directorate General of GST Intelligence under the IT Act and IGST Act, enabling it to direct intermediaries to block unregistered online money gaming platforms, including those based offshore.

Furthermore, suppliers of online money gaming are now mandated to register under a Simplified Registration Scheme within the IGST framework. Since October 1, 2023, the sector has been subjected to a uniform 28% GST. The Centre has also issued 1,524 blocking directions between 2022 and June 2025 to restrict access to illegal gaming, betting, and gambling apps and websites.

However, industry leaders warn that unless deeper structural and enforcement reforms are introduced, offshore betting will continue to erode both the integrity and revenue potential of India’s regulated online gaming ecosystem.

Massive Economic Leakage and an Uneven Playing Field

Anuraag Saxena, CEO of the E-Gaming Federation (EGF), points to severe economic damage: “Offshore betting platforms are taking away close to $12 billion every year from Indian users. This is causing a loss of more than $2.5 billion in GST revenue alone. These figures, drawn from recent industry and regulatory reports, highlight a massive economic leakage that’s both unsustainable and deeply damaging to our digital economy. The disparity is stark, while legitimate Indian gaming companies operate under a 28% GST regime, deduct TDS, and comply with mandatory KYC norms, offshore entities face zero oversight and zero accountability.” 

Saxena notes that this uneven playing field puts domestic operators, particularly those in the skill-based gaming space at a clear disadvantage. They already navigate high compliance costs and evolving regulatory expectations. The growing presence of offshore platforms, which operate without the same checks, further complicates the landscape. “To support the long-term growth of India’s gaming sector, it's important that policy frameworks distinguish clearly between legitimate, compliant platforms and unregulated betting operations, ensuring a level playing field for all stakeholders,” he stresses. 

Roland Landers, CEO of the All India Gaming Federation (AIGF), shares a similar concern: “The economic leakage from unregulated offshore betting operations is substantial, with conservative industry estimates placing it at several thousand crores annually. These platforms not only operate outside India’s taxation framework, but also facilitate capital outflows and potential money laundering—posing serious risks to financial and digital sovereignty.

Unlike offshore operators, Indian gaming companies are fully compliant with domestic tax laws, including 28% GST on deposits and 30% TDS on winnings. Offshore betting sites exploit regulatory gaps to aggressively advertise and lure users away from legitimate, skill-based platforms with the promise of untaxed, easy money.” 

He adds, “This undermines the viability and credibility of India's burgeoning domestic online gaming industry, which is committed to transparency, responsible gaming, and tax compliance. It is imperative that government should address this leakage through stringent action against illegal platforms and by creating a stable, competitive regulatory framework for homegrown operators to thrive.” 

Celebrity Endorsements: A Call for Accountability

The issue of celebrities endorsing platforms linked—directly or indirectly—to offshore betting has also come under sharp focus.

Saxena emphasizes the high stakes of influencer-driven promotion: “Celebrity endorsements carry immense influence, and when tied to unregulated offshore betting platforms, even indirectly can mislead users and normalize risky behavior. Many of these platforms mask themselves as casual games, making it difficult for users to see the underlying risks. In fact, in a July 2023 advisory, the Ministry of Information and Broadcasting (MIB) warned several influencers for promoting such ‘dubious’ platforms.” 

According to Saxena, “To address this, a mandatory Platform Verification Certificate for endorsements by high-reach influencers is essential. Regulatory bodies like ASCI and MIB must collaborate on stricter monitoring, with real consequences like monetary penalties, public disclosures, and action under the Consumer Protection Act for misleading promotions. We’re at a point where responsible promotion is not just advisable but essential. Clear guardrails will protect users and preserve trust in both the gaming and influencer ecosystem.” Landers agrees, stressing the role of due diligence by public figures: “AIGF has consistently advocated for responsible advertising and accountability across all stakeholders, including celebrities and influencers. There’s a clear legal and ethical distinction between regulated skill-based platforms and offshore betting sites. If endorsements inadvertently lead users to unregulated or harmful platforms, it’s only fair that accountability mechanisms follow—whether through penalties, restrictions on endorsements, or action under consumer protection laws.

This isn’t about targeting celebrities, but about setting basic due diligence standards. Public figures must verify the legality of platforms they endorse, while agencies and brands should ensure full compliance. Guidelines from ASCI and advisories from the Ministry of Information and Broadcasting already offer a framework—what’s needed now is stronger enforcement. Ultimately, these steps are crucial for building a credible and safe advertising ecosystem in gaming.

AIGF supports stronger implementation of these frameworks, not to hinder endorsements, but to ensure they do not serve as a gateway to misleading the public and indirectly support illegal operations.”

Revenue vs Regulation: A Digital Conflict of Interest

Both leaders underscore a troubling conflict of interest when digital platforms are expected to regulate content that brings them significant ad revenue.

Saxena points out: “There’s an undeniable conflict of interest when major digital platforms are expected to self-regulate offshore betting ads, especially when the revenues at stake are massive. In 2024–25, offshore betting accounted for 43% of all ad violations in India, up from 17% the previous year. ASCI flagged over 3,000 illegal betting ads, with Meta-owned platforms responsible for nearly 80%. Despite Google removing 247 million ads and suspending 3 million accounts, concerns remain about delayed action and revenue earned before takedowns.

At EGF, we believe a more structured approach is needed. Transparency and accountability can’t be optional when user safety and national interest are at stake. We propose a Digital Integrity Score that ranks platforms based on compliance, takedown response, and violation history. Persistent offenders must face closer regulatory scrutiny, while compliant platforms should be incentivized with certification.”

Landers elaborates on the industry’s collaborative efforts with regulators: “India’s digital ecosystem has a unique opportunity to lead by example when it comes to responsible advertising in the gaming sector. While gaming ads—especially from offshore operators—have historically contributed significant revenues to digital platforms, the focus must now shift toward long-term trust, transparency, and consumer safety. AIGF believes that with evolving regulations and growing public awareness, platforms are increasingly recognizing the importance of aligning with responsible, legal gaming partners. 

To support this, AIGF encourages proactive steps such as mandatory pre-screening of gaming advertisers, adherence to ASCI guidelines, and compliance with MIB’s self-declaration norms. The Federation’s collaboration with ASCI to monitor misleading gaming ads is a strong example of industry-led accountability. By prioritizing consumer protection and promoting only regulated, skill-based platforms, digital platforms can help build a safer online ecosystem while continuing to grow responsibly. 

Need for Transparency and a Central Enforcement Mechanism

Saxena calls for real-time tracking and collective action through a centralized framework: “At EGF, we believe greater transparency is key to curbing the spread of offshore betting ads. Currently, the transparency around offshore betting ads remains limited, with no structured disclosures on takedowns or ad origins. Platforms often share only anecdotal, post-facto information. To drive meaningful change and strengthen enforcement, we are ready to work closely with MeitY and MIB to establish a centralized, real-time Offshore Betting Blacklist. Further, we also advocate for a voluntary industry code of conduct, modeled on the EU’s Digital Services Act, to promote higher standards of transparency and compliance among digital publishers in India. Such steps would not only encourage a safer, more responsible advertising but greater accountability across the digital ecosystem.”

Landers stresses the importance of AI tools and a publicly available whitelist: “AIGF has been consistently working with various government bodies to share information on illegal and offshore betting websites. Our members actively support this effort by regularly flagging such platforms, enabling timely action to be taken. While industry-government collaboration is strengthening, what’s urgently needed is a clear, central regulatory framework. Clarity around what constitutes legitimate skill-based gaming—along with a publicly available whitelist of compliant Indian operators—would not only help users make informed choices but also aid platforms, advertisers, and enforcement agencies in identifying and blocking non-compliant or illegal entities more effectively.

Complementing this, the deployment of AI-driven ad filters and other technological tools to proactively detect and block misleading content will further bolster the ecosystem. The collective goal must be to protect Indian users, support legitimate businesses, and uphold the integrity of the domestic gaming industry.”

As India moves to safeguard its digital economy and reinforce public trust, the consensus among industry stakeholders is clear: meaningful reform must go beyond takedowns and include long-term, collaborative, and transparent frameworks that distinguish lawful platforms from illegal ones. With voices like EGF and AIGF leading the charge, the momentum to clean up India’s online gaming ecosystem has never been stronger.