New Delhi, Illegal online betting and gambling companies act as channels for money laundering and terror financing, according to a report by the Scientific and Security Technical Research Association of Rashtriya Raksha University.
IT Rules 2021 differentiates between permitted real money online gaming and illegal betting and gambling practices. However, the report suggested the need for a registration mechanism to whitelist legitimate real money online gaming platforms operating in compliance with Indian laws.
"Illegal online betting and gambling apps expose Indian digital nagriks to various security risks such as cybersecurity attacks and unsafe online environments. They have also emerged as a threat to India's national security because the sites Illegal online betting and gambling websites act as channels for money laundering and terrorist financing," says the Security Scientific and Technical Research Association (SASTRA) report.
It said the current legal and regulatory framework does not adequately distinguish between legitimate and illegitimate activities, so illegal platforms frequently facilitate additional illicit activities, including money laundering.
The report says that while there is no official estimate on the size of the betting and gaming market in India or the revenue generated from these activities, a 2017 report by the International Center for Sports Safety estimated that the betting market and illegal gambling in India was worth it. 150 billion dollars, or almost 10 lakh crores.
"These dishonest actors siphon money from our economy, leaving a trail of financial instability, thus fueling criminal activity," the report says.
The report has recommended the government to implement the IT Rules 2021 for Online Gaming Intermediaries to create a legal distinction between legitimate real money online gaming and betting and gambling.
It has suggested setting up an inter-ministerial committee to evaluate legislative and enforcement measures and introduce a comprehensive regulatory framework to ban online betting and gambling.
As per the IT Rules 2021, betting and gambling are illegal in most parts of the country and online gaming platforms are treated as illegal when it comes to gambling on those platforms.
Citing examples to differentiate between game of skill and game of chance, former Additional Solicitor General N Venkataraman had said that the Supreme Court cited horse racing as a game of skill even though the result of the race is unknown before it. really start. In the same sense, he added that putting money in a horse race eventually leads to betting according to the current laws on the matter.
The Ministry of Electronics and IT has reaffirmed the guidelines to regulate online gaming but is yet to implement them.
The report mentions the 59th report of the Parliamentary Standing Committee on Finance, which noted that illegal gambling apps pose a security threat.
The parliamentary report noted that the suspicious transactions of UPI IDs are linked to websites in Curacao, Malta, Cyprus and other countries from where illegal betting and gambling websites operate.
According to the SASTRA report, illegal platforms are misusing the Liberalized Remittance Scheme (LRS) provided by the Reserve Bank of India, which allows residents to send a certain amount of money abroad each financial year, for specific purposes.
The report mentions cases where illegal online platforms disguise themselves as feeding platforms and also use surrogate advertising to circumvent existing rules.
"Surrogate advertising has emerged as a significant trend among illegal online betting and gaming websites offering services in India. Due to legal restrictions surrounding the advertising of betting and gaming services, operators employ alternative strategies to attract users," the report says.
According to the annual complaints report for the financial year 2023-24 released by the Advertising Standards Council of India (ASCI), illegal betting advertisements have emerged as one of the most problematic categories, ranking second with a 17 percent, according to the report.
It has also recommended collaborations with advertising standards bodies such as ASCI to develop and enforce guidelines specifically against online gambling and betting advertisements.
IT Rules 2021 differentiates between permitted real money online gaming and illegal betting and gambling practices. However, the report suggested the need for a registration mechanism to whitelist legitimate real money online gaming platforms operating in compliance with Indian laws.
"Illegal online betting and gambling apps expose Indian digital nagriks to various security risks such as cybersecurity attacks and unsafe online environments. They have also emerged as a threat to India's national security because the sites Illegal online betting and gambling websites act as channels for money laundering and terrorist financing," says the Security Scientific and Technical Research Association (SASTRA) report.
It said the current legal and regulatory framework does not adequately distinguish between legitimate and illegitimate activities, so illegal platforms frequently facilitate additional illicit activities, including money laundering.
The report says that while there is no official estimate on the size of the betting and gaming market in India or the revenue generated from these activities, a 2017 report by the International Center for Sports Safety estimated that the betting market and illegal gambling in India was worth it. 150 billion dollars, or almost 10 lakh crores.
"These dishonest actors siphon money from our economy, leaving a trail of financial instability, thus fueling criminal activity," the report says.
The report has recommended the government to implement the IT Rules 2021 for Online Gaming Intermediaries to create a legal distinction between legitimate real money online gaming and betting and gambling.
It has suggested setting up an inter-ministerial committee to evaluate legislative and enforcement measures and introduce a comprehensive regulatory framework to ban online betting and gambling.
As per the IT Rules 2021, betting and gambling are illegal in most parts of the country and online gaming platforms are treated as illegal when it comes to gambling on those platforms.
Citing examples to differentiate between game of skill and game of chance, former Additional Solicitor General N Venkataraman had said that the Supreme Court cited horse racing as a game of skill even though the result of the race is unknown before it. really start. In the same sense, he added that putting money in a horse race eventually leads to betting according to the current laws on the matter.
The Ministry of Electronics and IT has reaffirmed the guidelines to regulate online gaming but is yet to implement them.
The report mentions the 59th report of the Parliamentary Standing Committee on Finance, which noted that illegal gambling apps pose a security threat.
The parliamentary report noted that the suspicious transactions of UPI IDs are linked to websites in Curacao, Malta, Cyprus and other countries from where illegal betting and gambling websites operate.
According to the SASTRA report, illegal platforms are misusing the Liberalized Remittance Scheme (LRS) provided by the Reserve Bank of India, which allows residents to send a certain amount of money abroad each financial year, for specific purposes.
The report mentions cases where illegal online platforms disguise themselves as feeding platforms and also use surrogate advertising to circumvent existing rules.
"Surrogate advertising has emerged as a significant trend among illegal online betting and gaming websites offering services in India. Due to legal restrictions surrounding the advertising of betting and gaming services, operators employ alternative strategies to attract users," the report says.
According to the annual complaints report for the financial year 2023-24 released by the Advertising Standards Council of India (ASCI), illegal betting advertisements have emerged as one of the most problematic categories, ranking second with a 17 percent, according to the report.
It has also recommended collaborations with advertising standards bodies such as ASCI to develop and enforce guidelines specifically against online gambling and betting advertisements.