Why govt may block the websites of 642 offshore gaming companies

The Directorate General of GST Intelligence (DGGI) has identified 642 offshore online gaming entities and is investigating these companies for potential tax evasion. These entities, offering services like online money gaming, betting, and gambling, have been flagged for being uncooperative during the investigation. According to a report by the news agency PTI, the Ministry of Electronics and Information Technology (MeitY) has been asked to block the websites of these companies under the IGST Act.
“DGGI does not have any reciprocal arrangements with foreign governments. However, 642 offshore entities providing online money gaming/betting/gambling have been identified till date for investigation,” Minister of State for Finance Pankaj Chaudhary said in a statement in the Lok Sabha,

Another report by The Digital India Foundation India claimed that the rapidly growing online gaming sector is under threat from money laundering and urgent action is needed to protect it and the country's digital economy. The report also recommends several measures, including:
Targeting illegal operators: Creating a dedicated task force to crack down on illegal online gaming operations.
Supporting legitimate businesses: Establishing a whitelist of legal and trustworthy gaming operators.
Stopping misleading ads: Combating misleading advertisements that can lure users into risky platforms.
Promoting financial integrity: Enhancing financial integrity within the gaming sector and increasing international cooperation to combat cross-border money laundering.
Educating users: Raising public awareness about money laundering risks in online gaming and educating users to make informed choices.
Strengthening financial systems: Conducting a comprehensive assessment of in-game assets and encouraging financial institutions to implement AI-powered detection systems and robust investigative teams to combat money laundering activities.

The Indian Real Money Gaming (RMG) sector is booming, with revenue projected to hit $7.5 billion in the next five years. This growth is fueled by millions of gamers and creates jobs in related industries like fintech and cybersecurity. However, the report warns of challenges like financial integrity, cybersecurity, and user protection that could hinder the sector's progress. The illegal betting market, which attracts over $100 billion annually in India, highlights the severity of these issues, particularly money laundering through in-game currencies, cryptocurrencies and offshore platforms.