India’s tax intelligence agency has detected INR700 billion (US$7.4 billion) in illegal online gaming and betting transactions across a single financial year, and has asked the government to rewrite payment records so investigators can see which website sent each rupee.
The figure comes from the Directorate General of GST Intelligence (DGGI) and covers transactions the agency identified. It is not operator revenue, confirmed tax evasion or a loss to the exchequer. The exact revenue loss is still being calculated, according to The Economic Times, which reported the findings on 2 September.
Within that ecosystem, DGGI suspects goods and services tax (GST) evasion of INR196 billion (US$2.1 billion) and has traced roughly 750 shell merchant entities used to collect player funds.
A 14-month investigation
The findings come from a 14-month investigation into illegal online gaming and betting networks allegedly used for money laundering. DGGI submitted its report to the Central Board of Indirect Taxes and Customs (CBIC) in August. CBIC forwarded it to the Department of Revenue, where the recommendations now sit.
The problem DGGI describes is one of visibility. Betting platforms rarely collect money under their own name. Funds move through separate merchant companies registered with payment aggregators, so the bank record shows a merchant with a plausible business description rather than the site that took the bet. With 750 such entities in play, tracing a payment back to the platform that generated it means reconstructing the chain by hand, one account at a time.
What DGGI wants payment systems to record
The agency has made two recommendations.
The first is that payment records identify the website that directed a user to make each transaction. That would attach an origin to every transfer at the point it is processed, rather than leaving investigators to infer it later from merchant names and transaction patterns.
The second is that all bank accounts linked to a website’s GST registration are disclosed. That would let investigators map the accounts used to receive, transfer and layer funds under a single registration, which is the step that turns a list of individual payments into a network.
Taken together, the two changes would move enforcement from the operator to the payment rail. That approach is now common where the sites themselves sit outside national jurisdiction. Brazilian authorities took a comparable route this week, blocking R$191 million in an investigation into Betnacional owner NSX.
The payment aggregator problem
Indian authorities have already brought a case at that layer. In March 2026, the chief executive of Fino Payments Bank was arrested over the onboarding of 36 shell entities as payment aggregator merchants, in a case involving around INR30 billion (US$318 million) in betting-linked transactions.
Cases of that kind are slow and depend on an onboarding failure being severe enough to prosecute. A recording requirement would change the default, placing the identification burden on the payment system at the moment of the transaction instead of on investigators months later.
Blocking has not moved players onshore
The recommendations arrive against a blocking effort that has not closed the market. As of 28 March 2026, 8,376 betting and gambling URLs had been blocked in India, more than 4,800 of them after the Promotion and Regulation of Online Gaming Act, 2025 came into force. The Act prohibits online money games and bars banks and payment systems from processing transactions connected to them.
Demand has moved rather than disappeared. A survey by CUTS International found use of offshore platforms rose from 68.3% to 82% after the ban, and the share of respondents using offshore sites daily rose from 3.4% to 42.3%. Those users are still paying through Indian banking infrastructure, which is why the payment record has become the point of leverage.
Open questions on who records the data
The government has not decided which entity would be responsible for recording the website information, or how the detail would be verified. Payment aggregators, sponsor banks and the merchants themselves each sit at a different point in the chain, and each has a different view of where a transaction originated. A field that can be populated by the party with the most to hide is worth little.
Verification is the harder half. A website name attached to a payment is only useful if something checks that it is the real one, and no mechanism for that has been set out.
The Department of Revenue will decide whether the recommendations become a requirement, and in what form. Whatever emerges will land on domestic payment infrastructure rather than on the offshore operators the measures are aimed at, which means banks, aggregators and their compliance teams will carry the cost of a rule written to expose someone else.
Source: Directorate General of GST Intelligence
