The Bill seeks to regulate the misuse of online gaming apps and online frauds
New Delhi: In a bid to check rampant online fraud, the Union Cabinet, at its meeting chaired by Prime Minister Narendra Modi, on Tuesday approved the much-awaited online gaming Bill, which seeks to regulate the misuse of online gaming apps and similar platforms. Sensing that the online gaming may pose a risk to national security due to illegal betting activities involved, it is expected to be a punishable offence for those who will misuse it, according to top sources.
The move of the government comes after a rise in fraud cases in recent months, with several investigating agencies stepping up action against celebrities promoting such applications. “The Bill seeks to bring online gaming platforms under a legal framework and introduce penalties for gambling through digital apps. The government is also trying to table the bill in Parliament on Wednesday,” the sources said.
Since October 2023, 28 per GST has been levied on online gaming, while player winnings have been taxed at 30 per cent starting FY 2024-25. The tax net has also been extended to offshore platforms, with authorities empowered to block unregistered or illegal sites. The proposed law also flags concerns over addiction, and inconsistencies across state laws and has provisions for penalty as well.
The sources said that the bill aims to draw a clear line between entertainment-focused online games and those involving money and wagering. “Normal online games will not face any restrictions and may even be considered as part of global Olympiads in the next 8-10 years. On the taxation front, the government is exploring all the possibilities to bring betting-related gaming apps under the GST category of “sin goods”, which could attract a levy as high as 40 per cent,” the sources said.
The move of the government is prioritising to regulate the fast-growing online gaming industry, prevent misuse, and ensure safeguards against financial fraud and other unlawful activities. “Though the bill has many provisions, it may bar celebrities and influencers from endorsing or promoting betting-related gaming applications. Any violation of this provision will invite legal action,” the sources said.
It also learnt that the ministry of electronics and information technology (MeitY) could be designated as the central regulator for online gaming. The bill also is meant to put an end to online betting. Unauthorised betting already carries a fine and a seven-year jail term under the new penal code Bhartiya Nyaya Samhita.
