Online Gaming Ecosystem Tied to Medicine, Hawala and Terror Financing: Centre Tells Supreme Court

The submission got here in an in depth affidavit responding to constitutional challenges to the Promotion and Regulation of Online Gaming Act, 2025, filed by main trade gamers together with Head Digital Works Pvt Ltd.

The Centre warned that the unchecked development of on-line cash gaming posed a “clear threat to national security, public order and financial sovereignty,” citing inputs from a number of ministries and enforcement businesses.

It stated it was ready to put “classified material” earlier than the Court in a sealed cowl to show demonstrable hyperlinks between gaming networks and drug trafficking, human trafficking, оружие smuggling and different organised legal exercise.

According to the affidavit filed by AoR Sudarshan Lamba, suspicious transaction studies related to gaming platforms have risen exponentially. From a single enquiry in 2019-20, the quantity surged to over 200 in 2023-24, involving practically 7,000 financial institution accounts and outward remittances exceeding Rs 5,700 crore routed to jurisdictions with weak monetary oversight.

The authorities alleged intensive use of mule accounts, crypto-layering, hawala channels and offshore shell entities to masks illicit flows.

The Centre additionally foregrounded the general public well being and social harms related to real-money gaming. Data submitted by states recorded 32 suicides in Karnataka between January 2023 and July 2025, 20 instances in Telangana final 12 months, and over 30 in Tamil Nadu lately. Nearly 45 crore people, the affidavit claimed, had been adversely impacted. “There can be no right to profession or trade at the cost of human lives,” it stated, urging the Court to reject the trade’s reliance on Article 19(1)(g).

On legislative competence, the Centre argued that Entries 31 and 97 of List I place regulation of the digital area squarely inside Parliament’s area. It criticised state-level interventions as having created “regulatory chaos,” prompting the enactment of the 2025 laws to determine uniform requirements and shut enforcement gaps arising from extra-territoriality and cross-border operations. The prohibition, it clarified, doesn’t lengthen to e-sports or on-line video games with out real-money stakes.

In a separate affidavit earlier than a bench of Justices JB Pardiwala and KV Viswanathan, which has consolidated challenges from a number of High Courts, the Centre reiterated that unregulated gaming platforms have been aggressively marketed by superstar endorsements and influencer campaigns, disproportionately concentrating on youth and susceptible teams.

It contended that the brand new legislation was enacted within the public curiosity to curb the “widespread and harmful impact” of those platforms on people, households and the nation.