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Most of such firms, which largely remain non-compliant with Indian regulations, aggressively promote their illegal site via social media channels. This comes after the government instructed all major OTT platforms to not allow these sites to advertise with them.
Amidst the rampant and uncontrolled mushrooming of apps that illegally offer betting and gambling, the Indian government is set to tighten the regulatory net around them. According to various media reports, the government has discovered around 114 illegal apps currently active in this space in India.
These applications employ proxy bank accounts to collect payments via UPI from its customers, making it difficult to trace these funds. They also use other channels like cryptocurrency and illegal means like hawala to move funds around. The centre is mulling about levying TCS (tax collected at source) on such UPI payments, so that these funds can be linked and traced back to a source. Increased scrutinization for platform verification and payment gateways used by them have also been listed as potential measures. Notably, most of these websites constantly keep tweaking their domain name to escape the clutches of regulators.
A slew of other measures have also been proposed to counter this menace, some of which include regularly blocking unregistered sites. Starting this month, all offshore gaming companies are compulsorily required to register with the Ministry of Electronics and Information Technology (MeitY). In July, the ministry had ordered for blocking about 138 betting sites based on information provided by the Directorate General of GST Intelligence (DGGI).
An additional 38 other gambling sites are already under MeitY’s radar on charges of money laundering. Estimates suggest that such offshore gaming companies rake anywhere between 15-20 billion dollars from the country. Already, investigations into illegal remittances to the tune of Rs 4,800 crores by these companies are being undertaken by various agencies.
Most of such firms, which largely remain non-compliant with Indian regulations, aggressively promote their illegal site via social media channels. This comes after the government instructed all major OTT platforms to not allow these sites to advertise with them. Generally, these offshore gaming sites are registered in tax havens like Cyprus, Malta and Mauritius, countries which have legalized betting and gambling.
The government has ramped up on its efforts to curb illegal activities like gambling. Last month, the Enforcement Directorate (ED) booked a company under the Prevention of Money Laundering Act (PMLA) and attached movable assets worth Rs 5.8 crore under the same.
The accused, Shyamala N and Umar Farooq had not only purchased multiple SIM cards and linked them to various bank accounts for transaction purposes, but had also created fake entities like Rockstar Interactive, Indie World Studio, Falcon Entertainment Agencies, Next Level Technology, Rift Gamer Technologies and more to collect money from public, under the aegis of sites like estartech, khelo24bet and more.