New Delhi: Terrorists and extremists are increasingly using online gaming platforms as a hunting ground for new recruits as well to raise and move funds, says the latest Financial Action Task Force (FATF) report released Tuesday.
“Gaming platforms are increasingly becoming spaces terrorist and extremist actors use to exploit to disseminate propaganda, recruit members, incite and engage in radicalisation activities, communicate and sometimes fundraise,” notes the report titled ‘Comprehensive Update on Terrorist Financing Risks’.
It underscores the need to safeguard digital spaces, highlighting how terror groups are not just using social media for communication, but e-commerce platforms to procure material for terrorist activities like the purchase of aluminum powder from Amazon to “enhance the impact” of the blast that killed 40 CRPF jawans in Pulwama on 14 February, 2019.
The Indian government is also undertaking an in-depth scrutiny of the multi-billion dollar online gaming industry over concerns of fraud and money laundering.
Online gaming scams have emerged as a significant national security threat, with Indian investigative agencies currently probing multiple cases related to the issue. According to sources within the agencies, in just the first three months of 2025, illegal betting websites received over 1.6 billion visits. The online betting market in India is now estimated to be worth more than 100 billion USD and is growing at a rate of 30 percent annually.
Estimates suggest that top betting apps are allegedly evading taxes amounting to Rs 27,000 crore each year. Sources added this money is often laundered and funneled into illegal activities, including terror financing.
Given the scale of the threat, sources in the Indian security establishment told ThePrint that various ministries, departments, and agencies are jointly preparing a comprehensive report. This report will assess the rapid growth of the online gaming industry and its implications for national security, and will recommend appropriate regulatory measures.
The primary objective is to bring online gaming companies under the ambit of anti-money laundering laws, subjecting them to stricter compliance and financial oversight. This is aimed at curbing unchecked proliferation of online gaming apps, many of which are already under investigation for duping users.
The FAFT report cites an analysis of financial crime risks of in-game purchases to highlight a link between terror financing and money laundering techniques used either to move or layer funds using gaming platforms.
“There is some degree of scepticism on the scalability of video games for TF (terror financing), as these platforms may not yet offer transactions of sufficiently (sic) value to serve as a primary tool for such activities. Also, fees can be quite high to conduct transactions on gaming platforms, reducing this attractiveness of the channel for TF. However, data collected on microtransactions and the sale of digital video game items from the past several years indicates that virtual transactions can be lucrative,” the report adds.
Lack of strong oversight and the relative ease to exploit these platforms allow criminals to launder “large amounts of money” through thousands of small transactions, which is also a method used by terrorist groups, it says.
Moreover, the FATF report adds that in-game voice and text chats are used to recruit, radicalise, disseminate propaganda and even incite lone-actor attacks. This, the report notes, can also “provide terrorists with relatively secure platforms to solicit donations and provide guidance on how to conduct financial transactions securely to avoid detection”.
The report gives instances of how organisations such as Hezbollah create and sell their own video games, which are available as open source research materials. “Game elements can indeed be purchased and donated to other players, without much traceability of transactions,” it says, also drawing attention to another key trend—games offering options of reenacting a specific attack or allowing users to play from the perspective of terrorists.
The sales of these games generate revenue for the developers in addition to the donations during gameplay.
Here, the FATF report cites the examples of terror outfits including ISIL, that have exchanged virtual assets acquired through video games for fiat currency with the help of unlicensed virtual asset service providers (VASPs).
The report also presents a case study on how gaming platforms are used for terror financing, wherein the South African Financial Intelligence Centre (FIC) identified a bank account used to make extensive payments to the PlayStation Network Online Platform and its analysis of the account showed multiple red flag indicators suggesting “potential involvement in extremist activities”. Among these irregular transactions were those labelled as “salary”, the purchase of an iPhone, a significant payment for an identification document, and consistent online activity on the PlayStation Network.
The individual to whom the account was linked was also flagged by the FBI for alleged terrorist activity in Somalia and suspected ties to ISIL.
(Edited by Amrtansh Arora)
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