Illegal operations
The government of India found as many as 114 illegal betting and gambling platforms operating in India through domain farming, details were disclosed to ET by those aware of it.
The Centre is considering measures to deter these offshore platforms illegally offering gambling in India. The measures may include Tax Collection at Source, (TCS) on UPI payments, actively tracking and blocking unregistered online gaming firms and a stricter verification process.
These platforms are collecting UPI payments through proxy bank accounts and these accumulated amount in proxy accounts is being remitted through hawala, crypto and other illegal routes. The TCS measure would ensure that a money trail is left that can be investigated.
In a presentation to the revenue department last week, domestic online gaming companies flagged several offshore betting and gambling platforms, detailing how they were illegally operating in India.
Registration is mandatory for offshore gaming companies in India from October 1.
In July, the Ministry of electronics and information technology (MeitY) ordered the blocking of 138 offshore betting sites that were engaged in illegal gambling, on the recommendation of the Directorate General of GST Intelligence (DGGI).
Platforms and Mode of Operation
Some prominent platforms pinpointed to be operating illegally are Parimatch, Fairplay, 1XBET, Lotus365, Dafabet, and Betwaysatta. Many of these platforms are on the banned list.
Their mode of operation includes using surrogate news websites and changing payment proxies linked to Indian bank accounts, for instance, Parimatch is now parimatchnews while Lotus365’s domain name has changed from lotus365.com to lotus365.in.
These are mostly registered in jurisdictions that allow gambling and betting like Cyprus, Malta, Curacao, Mauritius and the Cayman Islands.
After the Centre issued an advisory in April to media companies and OTT platforms not to carry advertisements of such gambling platforms, these organisations were reported to have resorted to aggressive campaigns on Instagram and Facebook.
Measures
A senior finance officer told ET that many illegal sites which are not registered in India are still operational and that they are using various proxy sites, which the government is in the process of identifying and blocking.
In July, revenue secretary Sanjay Malhotra told ET in an interview stated that payment gateways can be used to track offshore online gaming companies.
The enforcement directorate is already looking into instances of money laundering by some of these sites.
The Centre amended and notified the IGST Act which mandates that all offshore gaming companies need to be registered in India. It also gives the central government power to block websites which are not registered and are violating laws.
The official added that some websites have been approached for registration but largely they remain non-compliant.
