Going beyond the conventional method of accepting bets, bookies had set up illegal online websites for the Cricket World Cup which was again used for assembly elections in five states drawing the attention of youngsters addicted to online gaming and sports apps
Manish Pachouly
Mumbai: The youth of the country is facing the danger of a different kind of addiction. Following the concern of drug abuse, illegal betting has started to attract adolescents.
What aided the youngsters to fall into the trap of betting was the introduction of illegal online websites for the recently concluded cricket World Cup. These websites continued to accept bets for the assembly elections in the five states – Madhya Pradesh, Rajasthan, Telangana, Chhatisgarh, and Mizoram.
It was not difficult for the youths to get access to these websites and place bets because they were already addicted to the prevalent online gaming and sports apps, that allowed monetary transactions. While these apps operate legally in the country, the addiction has diverted youngsters to place illegal bets using the new modus operandi adopted by the bookies.
Starting with the World Cup, the bookies had cloned legally operating betting sites abroad and accepted bets online by distributing the links for login. The links were called ‘Button’ in the betting circle. The benefit for the punters here was that the online gaming apps deduct 28 percent tax upfront on the money deposited while the illegal online betting needed no tax to be paid on the money placed on bets.
Online gambling has been talked about across the world. According to a recent report by Grand View Research, a business consulting firm in the US, the global online gambling market size was valued at USD 63.53 billion in 2022 and USD 70.64 billion in 2023. It is expected to grow at a compound annual growth rate of 11.7% from 2023 to 2030, the report said. On regional insights, the report said that the increased use of internet services and modification of restrictions related to online gambling and betting is anticipated to promote the development of the market in the Asia Pacific over the forecast period.
In India, the illegal betting market easily crosses Rs 10 lakh crore per annum with bets accepted on anything from sports to elections to average rainfall to beauty pageants.
The government policy on gambling has been inconsistent with the most visible betting on racehorses recording a turnover of around Rs 6,500 crore per annum. Besides, online gaming and fantasy sports apps have flooded the Indian market. There had been demands by some authorities in the horse racing federation to legalise betting so that the government can earn huge revenue from it. The illegal betting on horse racing is said to be 10 times more than the legally accepted bets.
However, the high taxation has been a challenge for the legally operating sites. The government has raised the GST to 28 percent on online money gaming, casinos, and horse racing. The GST is to be paid at the entry level. “High-level taxation and unmonitored illegal betting have been giving rise to the latter,” said a member associated with the racing federation.
The unmonitored illegal betting is now proving dangerous for teenagers many of whom these days get decent pocket money and have access to online payment methods. In some cases, the youngsters have also been found to be clandestinely using money from their parents’ accounts to gamble. What starts as fun by playing online games and using fantasy sports apps soon turns into an addiction. The new modus operandi used by the bookies has witnessed some disturbing trends with many youngsters trying their luck on this illegal gambling.
According to an insider in the betting syndicate, so far youngsters were not able to place bets easily because it was done offline. Only those who were aware of the illegal betting market and had contacts with bookies directly or through references used to place bets.
However, with bookies now shifting to illegal online betting, the youngsters too got trapped in this addiction. They got easy access to the links of the websites and obtained a ‘button’ to log in. “Their lives are being destroyed by this,” the insider sighed.
The online system
Explaining the system, the insider said that close to 60 big bookies from India set up servers in Dubai and Hong Kong and created betting websites similar to those legally operating in a few foreign countries.
The insider said that these few big bookies gave buttons to local ones who passed on the same to their clients here. Each big bookie had 3,000 to 6,000 buttons which were further multiplied manifold by the local smaller bookies.
The local bookies had their arrangements with the big ones operating from abroad. “In case of punters’ loss, we kept from one percent to 30 percent of the total amount placed on the bet by them and gave the rest to the main bookies. The percentage we got depended on the amount of bet placed. The higher the amount, the lower the percentage for us, but the monetary benefit was more,” he said, explaining further, “In case a punter placed Rs 10 lakh and lost, and our percentage was 20, we got to keep Rs 2 lakh while the rest went to the main bookie.” In case the punter won, the local bookie had to pay him as per the rate on which he had placed the bet.
The settlement for the World Cup, according to the insider, was done the next day of the match by some bookies while others settled their books every Monday. All the settlements were done through hawala (an illegal mode of money transfer).
The new trend of accepting bets online made it easy for bookies and punters to operate secretly. “There is no need for frequent communication on mobile phones, everything is online,” said a punter who placed multiple bets on the recent World Cup and assembly elections.
Betting estimates
According to the estimate of those in the circle, the cricket World Cup witnessed betting to the tune of close to Rs 1.25 lakh crore with the final match itself witnessing massive bets in the range of Rs 50,000 crore. Punters lost huge money as they had placed bets on India winning the cup. Punters’ loss was bookies’ gain.
The assembly elections witnessed slightly more bets with the estimates crossing Rs 1.5 lakh crore. Insiders said that most of the bets for the elections were online, though a small percentage where the amount was unprecedented was placed using the conservative method of dealing directly with bookies.
Past cases pertaining to online gaming/betting
- In July traders under the banner of Nagpur Chamber of Commerce Limited, demanded the government take strict action against online legal betting apps and block them as they were taking a heavy toll on the younger generation. Their demand came soon after a businessman was duped of Rs 58 crore in betting through a fake app.
- A 16-year-old boy from Hyderabad lost Rs 36 lakh in online gaming. The boy spent this money from his widowed mother’s account. She had got a majority of this money after the death of her husband who was in the police force. The boy had downloaded a free gaming app. However, soon he got addicted and as he moved further in the game, he began to deposit money in the app to add further skills and weapons. The mother realised the loss only when she went to the bank to withdraw some money in June this year.
- A 23-year-old doing a diploma in engineering committed suicide in Chhatrapati Sambhajinagar in May this year after he lost Rs 3.5 lakh in online rummy. He had gotten addicted to online gaming and was stressed after losing money.
- A 37-year-old resident of Uttara Kanada district died by suicide in June after he lost around Rs 65 lakh in online games. The man was addicted to online gaming and had initially won some money. However, he subsequently started losing and after the huge loss took a drastic step.
- A sub-inspector in Pimpri-Chinchwad in Pune was suspended after he won Rs 1.5 crore on a fantasy sports gaming platform. The action was taken after it was found that he had participated in the gaming without prior permission. Officers said that his action led to the maligning of the police department. The policeman, however, maintained that the said online gaming was not illegal and RS 45 lakh was deducted as tax from the prize money. He had also claimed that many from the police department played fantasy sports games.
- The Enforcement Directorate recently registered a case against the Mahadev app, an online betting platform that enabled illegal gambling on various games and sports. The ED investigation into the app began after one of its promoters spent a whopping Rs 200 crore on his wedding in the UAE in February this year. The wedding was attended by several celebrities.
Crime Alert 