Digital Fraud Issues in India’s Online Gaming Sector

Optimizing competitive advantage by overcoming current gaming roadblocks

Gaming operators in India are contending against the dual challenges of ambiguity between central and state gaming regulations and rising losses linked to networked digital fraud attacks. The regulations introduced by The Ministry of Electronics and Information Technology (“MeitY”) in 2023 defined the role of registered self-regulatory organizations (SRO) for centralized oversight of the gaming industry. It also introduced criteria to strengthen requirements around Know Your Customer (KYC) verification for online real money games. MeitY’s amendments create central-level regulations, but they do not fully replace the state-wise laws – which leaves gaming operators navigating the operational complexities of regulatory uncertainty while trying to run their day-to-day business.

These operational ambiguities also create an environment for enterprising and well-networked fraud organizations to exploit through identity fraud, promo abuse, criminal collusion and player scams. The combination of digital anonymity and speed of online gaming opens opportunities for fraudulent actors to leverage technology tools, like bots and AI, to quickly execute and monetize bonus abuse or player scam schemes. The losses tied to these fraud events not only impact gaming operators’ profitability and reputation – they also introduce significant player safety risks. Such challenges require gaming operators to implement a real-time fraud detection strategy to stay one step ahead of cybercriminals. Perfecting the careful balance between user experience and responsible gaming environments is shaping up to be a leading competitive differentiator in India’s growing gaming industry. Roland Landers, the CEO of the All India Gaming Federation (AIGF), estimates that between 85 - 90% of gaming revenue in India comes from the real money gaming side that attracts a core target audience ranging between 18 and 35 years old. These factors underscore the importance of promoting safe and responsible gaming environments, including age verification and proactively protecting financially vulnerable consumers while also protecting your organization against regulatory non-compliance and exposure to fraud and money laundering risks. 

Strengthening gaming safeguards by embracing standardization 

What proactive steps can gaming companies take now to best position their business for sustainable success in India’s dynamic regulatory and risk environment?  The answers center around security and trust. “The best route to entrenching India as a preferred destination for players, developers and investors begins with establishing robust standards designed to protect against harm and foster responsible online gaming,” says Roland Landers of All India Gaming Federation. The AIGF is the oldest, largest and the most diverse industry association for online gaming in India. They are currently working toward updating their charter with newer mandates for their member organizations and identifying industry norms, best practices and technology solutions that promote player protection and responsible gaming. Many of these initiatives center on: 

• Mandating know your customer (KYC) verification that identifies users and verifies their identities before accepting a deposit 
• Implementing age verification measures to prevent players under 18 from accessing real money games
• Maintaining and monitoring digital records to address concerns of potential money laundering
• Establishing coordinated reporting between SRO’s and industry members to increase risk visibility in real time 
• Promoting in-game features enabling players to set limits on their spending and playtime, with constant red-flag alerts built into game designs
• Adopting the Advertising Standards Council of India (ASCI) code to prevent in game advertisements promoting crime, violence or discrimination³

Momentum towards more formalized gaming standards is picking up speed. March 2025 began with the AIGF and the other federations announcing a Code of Ethics (CoE) to ensure responsible gaming and safety standards across the industry. The CoE mandates age-gating, KYC, fair play policies, responsible advertising and annual third-party audits to ensure compliance and credibility. The unified Code will be adopted by nearly 200 online gaming companies, covering the entire real-money gaming industry in India. Gaming companies with a revenue of more than ₹100 crore per year need to implement these practices within the next six months while platforms whose revenue is less than ₹100 crore per year have nine months to implement these guidelines. The federations will issue a certification upon successful adoption that is valid for one year, renewable annually upon completion of a third-party independent audit. The code is going to be reviewed annually to assess its effectiveness and identify areas for improvement.⁴ 

Gaming operators need to establish a 360-degree risk view of users on their gaming platforms that aligns with the enhanced player protections set forth by these SRO expectations and prevent digital fraud from impacting their business. “Safety and trust rely on optimizing user experience with appropriate level of security at onboarding and throughout the customer journey,” says Tai Thanh Vo, Director, Market Planning, LexisNexis® Risk Solutions, “Starting from a place of trust enables operators to recognize returning and trusted users and confidently engage in a way that elevates the gaming experience across the player life cycle.” Proactive onboarding protocols that utilize risk-responsive technologies enable gaming operators to more accurately identify vulnerable and at-risk players upfront. The right technology tools can authenticate digital identity or behavioral anomalies that may signal collusion or increased scam risks before players or gaming operators are negatively impacted. Leveraging the right combination of technology and digital intelligence allows gaming operators to prioritize gaming safety and strengthen regulatory compliance while providing a seamless user experience.

Leveling up responsible gaming to improve operator outcomes 

Success in India’s booming online gaming industry starts with a strategy that reflects the responsible gaming standards being reinforced by SROs and the newly announced Code of Ethics. Gaming operators that actively prioritize fraud prevention in their business strategy can promote player safety and experience while also protecting their bottom line. Integrating real-time digital identity intelligence and risk-based authentication enables operators to detect suspicious activity in real time, uncover fraud networks and reduce financial losses. Embracing best practices and innovative technology tools positions your organization to evolve and adapt quickly as regulatory expectations standardize on a broader scale so you can stay focused on perfecting entertaining gaming experiences for your most valuable players. 

Listen to the Identity Trust Podcast for a deeper conversation on “Gaming the System: Tackling Digital Fraud in India’s Online Gaming Boom”.  

1. and 2. “The Rise of Online Gaming in India: A Booming Industry,” February 6, 2025, SME Street, https://smestreet.in/online-gaming/the-rise-of-online-gaming-in-india-a-booming-industry-8695303
3. Sharma, Aruna, “Online Gaming Needs a Unified Policy, Not Disparate State Laws,” Outlook Business, November 4, 2024, https://www.outlookbusiness.com/columns/online-gaming-needs-a-unified-policy-not-disparate-state-laws
4. Aryan, Aashish, “Gaming federations tie up to enforce code of ethics for user safety,” Business Standard, March 10,2025,  Gaming federations tie up to enforce code of ethics for user safety | Industry News - Business Standard