Report: India urges FATF to enforce AML framework on gambling companies
Talks underway between the government and dirty money watchdog that could see firms adopt KYC norms and report suspicious activity
India is calling on the Financial Action Task Force (FATF) to include online gambling companies in its anti-money laundering (AML) and counter-terrorism financing (CFT) framework, according to reports.
The Economic Times has suggested talks are now underway between the Paris-based intergovernmental body and the Indian government. India has been a member of the FATF since 2010.
Should discussions prove successful, gambling companies would be forced to adopt strict know your customer (KYC) requirements and report suspicious activities to relevant agencies.
The issue will be discussed at the FATF plenary and working group meeting due to be held in Paris from 21-25 October.
Last week, FATF reported that India has implemented an AML/CFT framework that was “achieving good results” but added it “faces serious terrorism and terrorist financing threats”.
Speaking to The Economic Times, a senior official said there were concerns with illegal funds being used on apps such as the Mahadev app, which was at the centre of an illegal betting investigation earlier this year. The Enforcement Directorate suspected the platform to embroiled in match-fixing and using cryptocurrencies launder funds.
The official continued: “India will again present its case on how the online gaming platforms were being misused and why these should be under the ambit of the global standard.”
The official added that the aim of the inclusion of AML in the framework is to protect the industry from the threat money laundering, not to strangle the gambling industry.
Last week, the Indian government confirmed it was sticking to its decision made last October to hike the Goods and Services Tax rate on gambling from 18% to 28%.
Minister of Finance Nirmala Sitharaman confirmed this has resulted in a 412% surge in tax revenue from operators, with that figure reaching ₹6,909 crore (£628m) in the first six months of the policy change.
When announcing the increase in tax last year, the government also made it mandatory for offshore gambling companies to register in India. Under the Prevention of Money Laundering Act (2022), operators who offer skill games do not need to report suspicious activities, but crypto exchanges do.
Super Group, the parent company of Betway, exited India last year on the back of the increased tax rates, saying at the time that market was “no longer commercially viable”.
India’s current online gambling laws allow for players to place real money on skill games, such as daily fantasy sports (DFS), rummy and poker.