India Must Tackle Illegal Offshore Gambling Platforms

Countries all over the world, including India, are grappling with the issue of offshore betting and gambling platforms as they pose multitudinal threats from individual customers to national security.

Illegal Offshore Gambling Platforms

These platforms often employ sophisticated tactics to evade scrutiny, such as the use of mirror websites, white labels and surrogate advertising and are often served through anonymous links and channels that promise quick money to lure gullible users.

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• The complexities involved and modus operandi adopted underline the urgent need for effective strategies to combat illegal gambling activities.
• The recent goods and services tax (GST) amendments requiring all gaming platforms to pay 28% GST on deposits regardless of whether what they operate is a game of skill or chance has also led to the mushrooming of illegal offshore betting and gambling platforms, leaving the average Indian user vulnerable.
• As per the amendment, the offshore betting and gambling platforms were required to register under the new GST regime, failing which they were to be blocked.
  • However, none of these illegal platforms have registered under the GST regime and are still freely available to Indian users.
• Constitutionally, the jurisdiction to regulate the subject of betting and gambling lies with the state governments.
• It may be noted that there was no internet at the time the Constitution was adopted. States having the jurisdiction to regulate poses two problems.
  • First, different states may treat betting and gambling platforms differently. So, a platform may be legal in one state but illegal in another.
  • In addition, they have their own definitions of what constitutes betting and gambling, thereby creating a consistency problem across the states.
• To tackle offshore gambling and all such other offshore illegal websites and apps, it is necessary to establish central laws with uniform jurisdiction under a centrally designated authority. Such a Constitutional mechanism would enable the central government achieve this through the upcoming Digital India Act.
• At the same time, there is a need for stringent financial measures such as blocking transactions made with offshore operators, which is crucial for disrupting the financial flows to illegal gambling sites.
• By implementing the best practices and leveraging emerging technologies, governments and regulatory bodies can effectively combat illegal gambling activities.
• For now, the best way to block offshore betting and gambling platforms is through Section 14A of the Integrated GST Act, 2023 read with 69A of the Information Technology Act, 2000 requiring close coordination between the directorate general of GST Intelligence (DGGI) and the ministry of electronics and information technology.
• It is equally important to support and create safe and legitimate avenues of alternative entertainment in India i.e. skill-based interactive entertainment.

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Conclusion

Promoting homegrown skill-based interactive entertainment start-ups through regulation anc taxation would go a long way in enhancing the use of responsible gaming while also reducing the user base in India of illegal offshore platforms.