The exploding menace of illegal online betting apps has led to massive corruption, and is entrapping users in dangerous cycles of debt and addiction
For the last four months, Shikhar has barely had any sleep. The 32-year-old from Hyderabad has lost `9 lakh in little over a year on online betting websites. Most of this is money he had borrowed from money-lenders, who he now fears may show up at his door any moment and possibly cause him physical harm. The other thing that keeps him up at night is the thought of telling his wife about the money he has lost. “I don’t know how to tell her what I have done. We are a lower middle class family and Rs 9 lakh is a lot of money for us. I have sold her jewellery too,” he says.
It all started last year when his wife got pregnant. Having lost his job during the tumultuous second wave of the Covid-19 pandemic, Shikhar took a loan of Rs 2 lakh from a money-lender to pay for medical expenses and keep up with daily expenses. A commerce graduate, he was hoping to find a job before the money ran out. He did find a decent-paying IT job in the city, but barely a month into his new job he was let go by the company. This forced him to borrow more money. It was during this time that he came across an advertisement on social media from an online betting company that promised huge returns. Jobless and under a lot of debt, Shikhar was quickly drawn in by the lure of making a quick buck.
“In the first few weeks, I would bet a couple of thousand rupees every day. But soon it spiralled out of control. I started to bet more and more on different websites like Lotus365, Fair Play, Bet365, and others, hoping to make the money back. But I just kept losing. I sold my wife's jewellery, I borrowed from friends and relatives” Shikhar says while recounting his ordeal. At one point he even thought of dying by suicide, but the thought of his wife and newborn child held him back.
His is hardly a lone case. Over the last few years, hundreds of illegal betting websites and apps have mushroomed. Stories of people bitten by the gambling bug are everywhere. According to a report by Think Change Forum (TCF), an independent think tank, offshore sports betting companies receive an estimated Rs 8,20,000 crore ($100 billion) per annum in deposits from India and the industry has been clocking a growth of 20 percent per annum in the last three years since the beginning of the Covid pandemic.
Vivan Sharan, a partner at Koan Advisory, a Delhi-based independent research group believes the growth of online betting in India can be attributed to the development of digital infrastructure and increased usage of smartphones. “The potential for significant financial gains motivates individuals to participate in illegal betting activities. The allure of quick profits can override concerns about legal and financial consequences,” he says. Sharan says despite the ban some of these websites continue to operate because there is no state capacity to monitor. “The government in these cases only swings into action after someone has lodged a complaint. It is very easy to start a betting app. Low market entry barriers, very little (regulatory) supervision, and easy replication of brands are some of the reasons why illegal betting apps have mushroomed in India,” he explained.
The government on its part has of late tried to come down heavily on illegal betting in the country. There has been ongoing action by the Enforcement Directorate in a high-profile case involving the Mahadev betting app. In November, the Ministry of Electronics and Information Technology (MeitY) issued an order to block 22 illegal websites. This isn’t the first time some of these websites have been banned. In a similar order in February this year, MeitY banned 132 illegal websites including Lotus 365.
Days after the ban order by the government, many of these websites continue to run their sophisticated operations without any hiccups. Not only are the websites of some of these illegal betting companies still accessible, some of them are brazenly taking bets on mobile phones and using Indian bank accounts to receive the money.
When this writer called the mobile number listed on Lotus365's Instagram account, a man who identified himself as Ramesh answered. He offered to create an account on the website after a payment of a minimum of Rs 100 was made. The money was to be sent to a UPI ID linked to Utkarsh Small Finance Bank. But before the payment could be made, Ramesh shared another UPI ID over WhatsApp linked to Bandhan Bank and asked for the payment to be made in this account instead.
After the payment was made, Ramesh asked for the Unique Transaction Reference (UTR) number to be shared over WhatsApp for him to confirm the payment. Moments later this reporter received a message on WhatsApp from a different mobile number. The person identified himself as a “technical support member” for the website. He then shared two mirror websites Lotus365.co and Lotus365.win, and offered to create an account for the reporter in either one of them. When asked what the difference was between the two, the person replied saying “If you open the account in .Co, you'll receive a signing bonus, and on the other hand if you sign for .Win, no signing bonus will be given but there are higher chances of winning.”
Without waiting for an answer, minutes later, he sent an account ID and password on WhatsApp. This was followed by a message from another number on WhatsApp that offered to help the reporter learn how to place bets on the website, where bets were open on the ICC Cricket World Cup and upcoming elections in the country.
The New Indian Express found that many other banned websites are still working without users having to go via a Virtual Private Network or VPN. Fair Play, which was banned in November, also continues to operate like Lotus365. A WhatsApp number listed on their Instagram ID can be used to create an account on the website. Laser Book, another illegal betting website, has also adopted a similar modus operandi. These websites continue to have social media accounts with massive followings across Facebook, Instagram, YouTube, Telegram, and WhatsApp. Reddy Anna, another illegal website that was banned, has 586K followers on Instagram. It also has multiple accounts on Facebook.
Unlike fantasy sports apps that are legal in parts of India, in which users have to employ some bit of sports knowledge to predict the best 11 players in a match, illegal betting websites take up bets on odds offered on the website. It could be anything from guessing the result of a cricket match to what happens in the next ball in the match. On top of that, there is no limit on how much one can bet.
Rohit, 36, from New Delhi was a big-time player on Mahadev betting app before the ban. “I have been playing on Mahadev for a few years now. My total transactions on Mahadev is over Rs 1 crore. Right now, I’m Rs 5 lakh in loss. But there have been times when I have won big on Mahadev,” he says. Mahadev betting app has become the centre of a political storm between the Bhupesh Baghel-led Congress government in Chhattisgarh, from where the website was being operated, and the Bharatiya Janata Party. Launched in 2020 during the Covid-19 pandemic, Mahadev silently and rapidly grew into a popular betting app in north India, with hundreds of thousands of users.
The promoters of the website amassed massive wealth in just three years but ended up in the crosshairs of the Enforcement Directorate after one of the promoters, Sourabh Chandrakar, spent an estimated Rs 200 crore on his wedding in the United Arab Emirates this February, paid for entirely in cash apparently in a bid to avoid paying taxes. So far 18 people have been arrested in connection with the illegal betting website, which is said to be worth Rs 4,000 crore.
But none of these developments have deterred Rohit. He has been betting large amounts of money through bookies known as sattebaaz long before online betting was a thing. He says betting on sports has been a thing in India for as long as he can remember. “I started betting during my college days. Back then, people would place bets over the phone with a bookie they knew or had some relation with. Now it’s become huge. Illegal betting isn’t going to end because of any ban” he says.
Rohit, who runs a sanitation wholesale business, places bets on multiple websites during the course of the day. He is aware of the money he wins on these websites, although often, he ends up losing. “It’s become a habit. I can’t do without it,” he frankly admits. Nirali Bhatia, a cyber psychologist and psychotherapist believes multiple factors have made online betting a huge attraction for millions of Indians. “The lure of making quick money is of course a big part of why so many people have taken up online betting. But there is also a part that is played by social media.
It has raised the aspiration of millions of India, who want to taste fame and wealth without having to work hard. People want to show off their cars and travel photos as that is how you gain respect in society. And it’s not just an urban phenomenon. Post-pandemic we have also witnessed a rise in unemployment and unchecked inflation. Many Indians are unable to cope and hope to make it big on these apps. And lastly, some do it for the thrill of it,” she explained.
While Rohit is in it for the thrill, for Javed from Jammu and Kashmir's Srinagar, betting online was a desperate attempt to make money he needed to pay back for a loss he had suffered in business. The 28-year-old was working in Dubai for years before returning to Srinagar in early 2020. “I want to be with my parents so I started a used car dealership, but when the second lockdown was imposed I lost a lot of money,” he says.
After staying in Kashmir for a year, Javed began applying for jobs hoping to get back to Dubai. But nobody was hiring. During this time, he started betting on BetFair, an illegal website that was banned earlier in February. Javed says he came across an ad for the website on Instagram and was quickly lured in. Before he knew it, he had lost 1.5 lakh rupees. “It’s very addictive. Once you start, you just keep playing. I won some money initially and then I got hooked on it,” Javed says. He knows people who have lost more money and out of shame don't talk about it.
Social media fuelled
Social media platforms like Instagram, Facebook, WhatsApp, Telegram and others have played a big role in helping illegal betting websites gain massive user bases across India. But it's not just the big fish using social media. Even small-time bookies, who would usually operate within a limited group of people are also tapping into these platforms to get more bets. Prashant Kumar, 28, has been working as a bookie in New Delhi for years.
A few years ago, he says he would take bets from people he knew or could trust through his contacts. “You couldn’t trust anyone,” he says. But these days he takes bets from people living everywhere from Shimla to Bihar through a Telegram group he runs. He is still cautious and only lets people in the group he thinks he can trust. “Even on Telegram, I only take bets from people that come through a reference,” he says.
A senior Cyber Police official in New Delhi told The New Indian Express that they have received multiple complaints of illegal betting operations that are being conducted on WhatsApp and Telegram. “People have lost a lot of money in these betting scams. But it is hard to track the people who run these operations because they often use numbers registered using fake identification documents,” he says. The officer adds that there are also groups on Telegram that have tens of thousands of followers and often masquerade as giving tips on betting while they lure individuals onto other platforms that are paying them.
Srikant has taken to social media hoping someone would help him out. “I have written to minister to actors in hopes of getting some help but nobody even cares” he says, adding “I’m hoping for a miracle to happen otherwise I’m doomed.”
The better of the law
Online betting is not strictly illegal in India. The only national law on gambling is the Public Gaming Act of 1867 which regulates gambling in public places. Since it dates to long before the invention of the Internet, there is no clause specifically banning online betting.
However, court rulings over the years have held games of chance to be illegal. Games of skill are generally considered legal. Thus certain card games such as rummy and poker are considered legal as the Supreme Court has ruled that they are games of skill.
State laws, rather than national laws, prohibit most forms of bets on sports except horse racing. There are exceptions. Betting on archery is legal in Meghalaya. Sikkim has a law regulating games of chance and allows casinos and online gaming which is restricted to intranets rather than the internet. Goa also allows casinos but Goa residents are barred from entry. Certain activities of online betting sites — and many of them continue to operate through easily accessible websites and apps — are however illegal. In the Prosecution Complaint filed by ED in the Mahadev gaming app case filed last month, the Enforcement Directorate said that “the criminality stems from the fact that many of these betting activities are not permissible”. It further says that the promoters behind the Mahadev Book app generated a monthly revenue of Rs 450 crore by facilitating illegal betting activities across a network of online applications.
The ED alleged that the platform was operating “benami” bank accounts by using the Unified Payments Interface (UPI) IDs of poor people who were paid small sums in exchange for use of their accounts. These IDs were used to receive and send money. These transactions were not accounted for or taxed, the ED said. The profits made by the gaming app operators were moved out of the country through hawala channels, the ED has alleged. This was used to make cash payments and attracted the agency’s attention and headlines after a very lavish Rs 200 crore wedding in Dubai in February, paid for in cash.
Changing with the times
The Public Gambling Act, 1867 (PGA) was enacted during British colonial rule to provide punishment for public gambling and running of common gaming houses and was applicable only in the United Provinces of Agra and Oudh.
After independence, the Constitution of India distributed the power to make laws on gambling between the Central and the state governments.
Earlier this year, the Indian government issued regulations to govern the online gaming industry, prohibiting games that involve wagering or betting with real money.