Central registry, proactive approach key to combat offshore betting platforms, say experts

Experts says that illegal offshore betting apps indulged in direct and indirect tax evasion as well as user data theft and fraud

Updated - April 25, 2024 10:14 pm IST

Published - April 25, 2024 10:04 pm IST - NEW DELHI

A proactive and multi-faceted approach, also involving establishment of a central registry of legitimate online gaming companies, is required to combat the menace of offshore betting platforms which, as per a recent report, receive about ₹8,20,000 crore per annum in revenues from India and has seen a growth rate of 20% over the past three years, according to experts.

Stating that illegal offshore betting apps indulged in direct/indirect tax evasion, Nandkumar Saravade, a former Indian Police Service officer and founding chief executive officer of the Reserve Bank Information Technology Private Limited and co-founder of DeepStrat, told The Hindu that they also lured users with the assurance that no Goods and Services Tax needed be paid.

“Masquerading as legitimate gaming platforms, they advertise and run illegitimate schemes to lure unsuspecting users. Caught in their web, dependent users face immense psychological and financial distress and often turn to informal borrowing channels. Such platforms also act as conduits for money laundering,” he said.

Quoting the Think Change Forum report, which estimated that offshore betting market receives about ₹8,20,000 crore per annum in revenues from India and has recorded 20% growth rate over the past three years, Mr. Saravade said the report also highlighted that illegal betting apps cost the government an estimated ₹2 lakh crore in unpaid taxes during the World Cup 2023. Such apps were also being used for user data theft and committing fraud.

Gulshan Rai, former National Cyber Security Coordinator, cited the Mahadev app case stating that as per reports the network was operated through closed groups on various messaging platforms and the enterprise reportedly raked in ₹200 crore daily.

“These illegal betting apps act as pipelines for criminal activity, facilitating money laundering and even terror funding that can pose a serious threat to national security. Furthermore, their foreign origins raise concerns about potential manipulation and data breaches,” he said, adding that without clear and comprehensive regulations, it would be difficult to effectively control such platforms.

Asked if firewalls could be created to proactively identify and act against offshore betting apps, Dr. Rai said such apps were evolving continuously, and new domains and methods of operation were emerging frequently.

“A comprehensive strategy that combines firewalls with user awareness, and collaboration with financial institutions and internet service providers is necessary to effectively combat this issue. By implementing firewalls designed to block access to known illegal sites and utilising deep packet inspection to identify suspicious traffic patterns, it can be made more difficult for users to access these platforms,” he suggested.

He said while the existing measures were crucial, establishing a central registry of legitimate online gaming companies could be a game-changer. “This registry, along with a KYC database and some kind of validation for legitimate platforms, would empower various government bodies and users to easily distinguish legal from illegal platforms. While a comprehensive regulatory framework is under development, a basic registration process can serve as a vital buffer in the interim,” Dr. Rai said.

Mr. Saravade said the financial sector was already taking steps to tackle a similar problem with illegal lending apps and the Reserve Bank of India also was contemplating setting up a Digital Trust Agency to verify lending apps operating in India. “Once verified, the authorised apps will be visible on a public registry. It will be prudent to adopt a similar approach to tackle the menace of illegal betting apps and platforms. Consumer awareness campaigns can supplement these efforts and lend on-ground support to help consumers make informed decisions about the platforms they choose to trust,” he added.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.