India’s Directorate General of GST Intelligence (DGGI) has identified around INR700 billion (US$7.4 billion) in transactions linked to illegal online gaming and betting during a single financial year, prompting authorities to consider new payment-data requirements to help trace the flow of funds.
DGGI Seeks Greater Payment Transparency
The figure represents the value of transactions identified by tax investigators, rather than illegal operators’ revenue or the amount of tax revenue lost by the government. The exact financial impact remains under investigation.
The findings followed a 14-month investigation into illegal online gaming and betting networks allegedly connected to money laundering. DGGI has submitted recommendations to the Central Board of Indirect Taxes and Customs, according to reports.
One proposed measure would require payment records to identify the website that directed a user to make a transaction. Authorities also want greater visibility into bank accounts associated with a website’s Goods and Services Tax (GST) registration.
Proxy Merchants Create Investigation Challenges
Currently, banks and payment gateways generally record the merchant receiving a payment. However, illegal betting platforms can direct users to proxy merchant companies, making it difficult for investigators to determine whether those businesses are ultimately collecting funds for gambling platforms.
By linking transactions to their originating websites, authorities could gain a clearer view of how funds move between users, merchants, payment providers and betting platforms.
However, several details remain unresolved, including whether responsibility for collecting and maintaining the information would fall on gaming platforms, payment gateways, aggregators or banks. Authorities must also establish a reliable method for verifying the originating website.
New Requirements Could Increase Compliance Burden
The proposed changes are still under consultation because they could introduce additional due-diligence and reporting obligations for banks and payment companies.
The initiative comes as India strengthens its approach to illegal online gambling. The Promotion and Regulation of Online Gaming Act, 2025 prohibits online money games and prevents banks and payment systems from processing related transactions. Supporting rules came into effect on May 1, 2026.
Payment Monitoring Becomes Key Enforcement Tool
The DGGI findings highlight the increasing importance of payment tracing and financial monitoring in India’s efforts to combat illegal betting. As offshore and unlicensed platforms adapt their payment structures, authorities are seeking more detailed transaction-level information to identify the businesses and accounts behind the movement of funds.
If implemented, the proposed data requirements could give Indian regulators greater visibility into illegal betting payment networks while increasing compliance responsibilities for legitimate financial and payment-service providers.
