A recent report by the Directorate of Enforcement (ED) has revealed alarming details about unauthorized online betting platforms operating in India, which have generated illicit proceeds worth thousands of crores through sophisticated money laundering schemes.
According to the Directorate of Enforcement Annual Report 2024–25, several unregulated platforms, including the widely known Fairplay app, have been involved in illegal activities such as unauthorized live-streaming of sporting events and online casino-style gambling. In one major case, the Fairplay app illegally broadcasted Indian Premier League (IPL) matches to facilitate betting, resulting in significant financial losses for the official broadcaster, Star India.
Another syndicate reportedly used promotional .apk files to distribute gambling apps. These platforms promised high returns to users who registered and deposited money into digital wallets, ultimately amassing over ₹400 crore (approximately $48 million) in illicit gains.
Unregulated Apps & Websites
The key findings of Enforcement Directorate on illegal betting and gambling websites includes on details of fraudsters creating and promoting betting apps on social media and messaging platforms such as Telegram and WhatsApp, often disguising them as “online gaming.” These apps operated without licenses and were frequently hosted on overseas servers to evade Indian jurisdiction.
The ED report highlights that many of these platforms used manipulated algorithms. While users might initially win small sums to build confidence, they were later subjected to consistent losses.
The investigations found that users were instructed to deposit funds via UPI and IMPS into bank accounts that were not in the name of any legitimate business. These so-called “mule accounts” were held by individuals or shell entities to anonymously collect funds.
The accounts were often registered as merchants with payment aggregators like RazorPay and PayU. This allowed the collection of large sums in pool accounts, further obscuring the money trail and making it difficult for authorities to trace funds to the primary culprits, the report said.
Once funds were collected, they were routed through a labyrinth of accounts to avoid detection. The Fairplay case involved hundreds of such mule accounts. Ultimately, large amounts were funnelled into shell companies, including one posing as a pharmaceutical firm in Mumbai.
Union Minister for Electronics and Information Technology, Ashwini Vaishnaw, had informed the Lok Sabha that tackling these issues requires close collaboration between the central and state governments.
During the Question Hour, Vaishnaw had emphasized that the central government takes prompt action whenever violations come to its notice, ensuring all measures align with the Constitutional framework. “In 2022, only 14 betting and gambling platforms were banned and by 2024 the number reached to 1097. We are continuously trying and even we are getting a lot cooperation from the society.”
Siphoning Money Overseas
The Enforcement Directorate (ED) had earlier claimed that ₹4,500 crore were proceeds of crime of the online gaming and betting application Fairplay that has been alleged to be involved in money laundering.
The ED recently filed its prosecution complaint (chargesheet) in the case against Fairplay, detailing how it allegedly ran a sophisticated network of shell entities, offshore entities, financial intermediaries and complex money-laundering operations.
The ED report notes that criminals transferred money abroad using cryptocurrencies or falsified import-export transactions. These cross-border transfers made the illicit gains even harder to track.
Laundered funds were often reintroduced into the Indian economy under the guise of Foreign Direct Investment (FDI). In the case of OctaFX, funds returned as share capital to Indian startups, giving the appearance of legitimate foreign investment. Criminals also used the funds to purchase real estate, luxury goods, or make investments in businesses under their control.
Based on these revelations, the Directorate of Enforcement has initiated a series of actions to dismantle the networks behind such illegal platforms. The report urges heightened vigilance by users and financial institutions alike and recommends regulatory tightening around payment gateways and digital wallets.
In the Fairplay money laundering case, the ED said ₹111.59 crores have been seized by freezing bank accounts and properties worth ₹232.65 crores have been identified.
A report by Digital India Foundation stated that illegal betting and gambling activities in India have surged dramatically in recent years, with digital platforms accounting for a staggering 1.6 billion visits in just three months across four major sites.
“India must shift from the current fragmented enforcement strategy to a comprehensive ecosystem-based approach that effectively disrupts the key enablers sustaining illegal betting and gambling operations,” the report added.
It further added that the restrictions should include curbing digital media channels that drive user acquisition, tightening financial regulations to block illicit transactions, and enhancing enforcement mechanisms to ensure long-term disruption of these illegal operations.