By Adnan Bhat
Rishabh Singh has lost over 50,000 rupees on illegal betting websites since the start of the Indian Premier League (IPL) last month.
Although it's not a big amount for the 35-year-old from New Delhi, who runs a real estate business, it is also not his first time losing money on such websites.
Singh has been betting on these websites for over two years. "When I started betting, I won almost 3 lakh rupees in the first month. Then it didn't go so well. I ended up burning 2 lakhs from my own pocket," he told Decode.
Despite the financial setbacks, Singh hasn't lost his appetite to bet. "When you win some money, you get hooked on it," he explained.
For a brief period late last year, Singh had stopped. After the enforcement directorate filed a high profile case against Mahadev betting app in August, Singh says he and many of his friends quit betting fearing police action. But just a couple of months later he was back at it after being bombarded with ads from betting websites on his Instagram timeline.
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Last year, the Ministry of Electronics and IT (MeitY) banned 174 gambling and betting websites under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
Real money gaming industry has witnessed prolific growth in the country over the last decade. In 2023, the government amended the IT rules to govern the online gaming industry, and at the same time prohibiting games that involve wagering or betting with real money.
So what’s the distinction between the two? Fantasy gaming apps like Dream11, My Circle 11 and others, users create virtual teams composed of real players to compete against each other based on the statistical performance of the players in live games. As opposed to this, on betting platforms, users place wagers on the outcome of sports events, such as the winner of a cricket match or the total number of runs scored based on the odds set by the platform.
The betting platforms have been banned.
However, Decode found out that many of these betting websites are not only still operating in India but are also openly advertising their platforms on social media using influencers and paid promotion. But that's not all. Even though most of these websites are said to be operated by offshore betting companies, Decode’s investigation reveals almost all of them are using various Indian banks to accept payments.
Supreme Court lawyer Amit Anand says the ban doesn't work because under the IT act the government can only limit access to a particular domain in the country. "So when the central government bans them, they can come up with a mirror website to bypass the ban. Under IT rules, the government can only geo-fence access to a website, that's the only power section 69 of the IT act," he explained.
The Promotions On Social Media
Lotus365, a popular betting website, was banned in February last year. Yet, it has continued its operations in India almost without any hiccups since. On Instagram, Lotus365 has over 140,000 followers. And since the start of the IPL, the website has been running sponsored ads featuring prominent social media influencers like Elvish Yadav and tech reviewer, Gaurav Chaudhary, popularly known as Technical Guruji.
It's not just one website that is using social media to lure people into betting. Decode found many other banned betting websites like Parimatch, 1Xbet and Fairplay using the same strategy.
Since June last year, the Ministry of Information and Broadcasting has issued four advisories directing newspapers, news channels, entertainment channels, online news publishers, online advertisement intermediaries (such as Google and Facebook), and social media platforms to refrain from advertising online betting platforms.
One of the advisories dated 21 March read, “Engaging in the promotion or advertisement of online gambling and betting, given its unlawful status in majority of the states, renders one equally liable for participating in an illegal activity. Hence, celebrities and influencers are advised to refrain from endorsing and promoting illegal betting and gambling activities.”
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Despite these explicit instructions from the central government prohibiting the promotion of online betting platforms, numerous celebrities persist in endorsing them.
In March, BJP leader and former WWE superstar Khali posted an ad for betting website MagicWin India on his Instagram handle which has over 10 million followers.
Even though Magic Win doesn't feature in the list of banned betting websites, it is just a new iteration of the same. When clicking on the link provided on the website's Instagram page, a warning message pops up "Be aware of potential scams."
Despite the clear concerns over the legality and authenticity of the website, many other celebrities like Zareen Khan, Amyra Dastur, Mallika Sherawat have also featured and shared ad campaigns for the website on social media in recent months.
The Murky Payments
Not only are these illegal betting websites using social media to lure Indians to their platform but are also brazenly using a network of Indian banks to accept payments.
A link provided in the profile 1xbet takes you to the website, after signing up using a mobile number, instantly a message was sent on WhatsApp from their "customer executive". After a quick lowdown on how people have won large sums of money on the website, the executive asked to send 500 rupees through UPI to an Indus Bank account registered in Rajasthan to enlist on the platform following which bet could be placed.
As per RBI and NPCI guidelines, Indian payment instruments should not be on blacklisted and banned website categories, like gambling, betting, forex trading sites, or on other restricted sites. They cannot have or use Indian payment instruments like Indian bank accounts, credit, or debit cards, UPI/VPA. So despite these regulations already in place how do these websites manage to operate using Indian bank accounts?
Decode found out that many other betting websites banned last year are using a similar modus operandi of Indian bank accounts and UPI to launder millions of rupees daily.
Think Change Forum (TCF), an independent think tank estimates offshore sports betting companies receive Rs 8,20,000 crore ($100 billion) per annum in deposits from India and the industry is clocking a growth of 20 percent per annum.
Amit Relan, founder and CEO of digital fraud detection firm mFilterIt says illegal betting websites are using a web of “mule bank accounts” to continue their operations to slip under the radar of law enforcement agencies.
“These accounts are like a secret passage in the financial world. Criminals use them to move their dirty money. It helps them stay hidden from the law because the money does not directly link back to them. Plus, since these accounts seem legit at first, they can slip past the rules meant to catch shady dealings,” he told Decode.
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Mule accounts are usually owned by common people who might not even know they are involved in something illegal. They could be tricked into opening these accounts or using their existing ones by thinking they are just doing a normal job or helping someone.
“Transaction laundering can have serious impacts. Even if the bank and owner of these mule accounts didn’t know what was going on, they might still have to deal with investigations, fines, or even lawsuits. So banks need to keep a close watch on what’s happening with their accounts to avoid getting tangled up in legal messes,” Relan added.
