The fight against illegal online activities: Policy responses for a safer digital environment

Policymaking is crucial in balancing the interests of regulation, innovation, and consumer protection. At its core should be the well-being and rights of consumers, ensuring their safety and security. However, fostering innovation by providing a conducive environment for businesses to thrive and develop new products and services is equally important. In my experience, balancing regulation and innovation is essential to promote growth and competitiveness while safeguarding consumer interests. Ultimately, successful policymaking requires a delicate equilibrium that benefits all stakeholders involved.

Over the years, India has worked towards building a robust digital ecosystem. Unlike other countries, we have created a bottom-up approach to developing scalable solutions that build trust for technology among the masses. With the Digital India Initiative at the heart of all our efforts, we want to create a $1 trillion digital economy by 2027-28. But this rapid digital adoption has also led to increased cyber security threats, posing risks of geopolitical tension and compromising national integrity. Illegal players offering loans, betting, and gambling apps further exacerbate these risks, making it crucial for countries to strengthen their cyber defences. These threats not only target individuals and businesses but also have the potential to disrupt critical infrastructure and sow discord on a global scale.

In India, numerous betting and gambling applications registered in nations like Cyprus, Malta and Curacao pose as legitimate platforms circumventing Indian regulatory and tax obligations. These applications lure consumers with their marketing techniques promising monetary benefits. These activities contravene several Indian regulations, including the Foreign Exchange Management Act of 1999, the Payment and Settlement Systems Act of 2007, the Information Technology Act of 2000, and the Prevention of Money Laundering Act of 2002. In response to the menace of these platforms, ministry of electronics and information technology (MeitY) which is also the nodal ministry for the online gaming industry, has blocked a total of 581 apps as of December 2023, out of which 174 are betting and gambling apps and 87 are loan lending apps. The ministry of information and broadcasting (MIB) and the Central Consumer Protection Authority (CCPA) have further issued advisories against the promotion and advertisement of illegal betting and gambling platforms.

Given the magnitude of the situation and the problems it causes to the country and its citizens, there is a need for policy intervention by the government. A recently launched report by Rashtriya Raksha University (RRU), titled Curbing Online Betting & Gambling: A National Security Imperative has made several critical recommendations to effectively tackle the persistent issue of illegal betting and gambling platforms. One key suggestion is the continuous and expeditious action under Section 69A of the IT Act. This would involve a more systematic approach to identifying illegal platforms through enhanced collaboration between government agencies, followed by issuing prompt blocking orders to Internet Service Providers (ISPs), network service providers, web hosting service providers and other intermediaries. ISPs play a crucial role in preventing access to prohibited content, and their cooperation is essential for timely enforcement. Furthermore, the report has also recommended establishing a comprehensive registration mechanism to create a whitelist of legitimate online real money gaming platforms. This would help users identify lawful operators, thereby enhancing regulatory oversight and consumer protection. There is also a need for inclusion of online betting and gambling activities as scheduled offences under the Prevention of Money Laundering Act, 2002 (PMLA). This would further strengthen India's anti-money laundering framework, enabling authorities to disrupt the financial networks supporting these activities effectively.

The government is working towards creating a safe and secure digital ecosystem. In line with this, CERT-In under the MeitY has been working to enhance the security posture of the nation's digital infrastructure. It collaborates with various stakeholders, including government agencies, businesses, and individuals, to raise awareness about cyber threats and promote best practices for cybersecurity. However, there is a need to address the growing challenge of illegal applications through a robust legislative framework, comprehensive regulatory mechanism, strict enforcement and strong stakeholder collaboration.

India has a burgeoning internet population of about 820 million users and trust among these users is key to the success of India's digital ecosystem. This trust has enabled technology like UPI to grow from 92 crore in FY 2017-18 to 8,375 crore in FY 2022-23. For us to maintain this trust we need to weed out players that compromise the safety of the people. For India to grow into a digital powerhouse, policies must address the needs of the growing ecosystem while protecting the integrity of the nation and its citizens. India is uniquely positioned to lead the world in establishing regulatory frameworks to address risks and opportunities while balancing innovation. While learning from experiences in the West and East, India has the opportunity to showcase its policymaking acumen in regulation of the digital space.

This article is authored by Alkesh Kumar Sharma, former secretary, ministry of electronics and information technology, Government of India.