The Ministry of Electronics and Information Technology (MeitY) has declared a blocking order against 22 betting platforms, following investigations by the Enforcement Directorate (ED) into an illegal betting app syndicate. Although the complete details of the blocked operators have not been disclosed, MeitY has confirmed that both Mahadev Book and Reddyannaprestopro are among those facing restrictions. This development comes in the wake of successful raids conducted by the ED, revealing the unlawful operations of Mahadev Book.
Adhering to legalities enforced by any jurisdiction is no novel concept. Indeed, hundreds of similar sites and apps have met a similar fate. For instance, in Oceania several Australian casinos have been recently banned by the ACMA since it was discovered that they were illegal offshore sites not abiding by the country’s strict regulatory framework.
Cause For Concern
The subsequent investigations have resulted in numerous arrests, including Bhim Singh Yadav, who was apprehended under Section 19 of the Prevention of Money Laundering Act (PMLA) and is currently working for the Chhattisgarh police. Interestingly, despite an 18-month investigation, the local Chhattisgarh government failed to take action against the illegal websites and apps, despite having the authority to do so under Section 69A of the IT Act.
The inquiry precedes the 2023 Chhattisgarh Legislative Assembly election, scheduled to occur in two phases on November 7th and November 17th, aiming to elect all 90 members of the state’s Legislative Assembly. Chhattisgarh’s Chief Minister (CM), Bhupesh Baghel of the Congress party, claimed on Sunday that there is a covert understanding between the Government of India and the Mahadev betting app, questioning why the app has not been banned by the Centre until now.
Baghel highlighted that, in total, the Chhattisgarh Police have arrested approximately 450 people ahead of the upcoming elections in the state. The ED also disclosed that a search operation on November 2nd found that Mahadev App Promoters made regular payments, totaling $61,028,630, to CM Baghel. Baghel refuted these accusations, stating that the BJP wanted to challenge the upcoming polls with the help of its agencies.
The ED is currently conducting an investigation into the Mahadev Book Online Betting App syndicate and its promoters. While the inquiry is ongoing, the central agency intercepted Asim Das, a cash courier sent from the UAE, tasked with delivering a substantial amount of cash for the election expenses of the ruling Congress party in the state.
Gambling Tax Increase
The blocking order is just one of the many changes happening in India’s online gambling industry. Just last month, the government introduced a flat 28% turnover tax rate for licensed operators offering services such as casinos, online gambling, and horse betting. Unlike being applied to the gross gaming revenue (GGR), this new taxing rate will be applied to the full face value of a bet.
In the realm of online gambling, the tax will be calculated based on the full value of bets placed with operators. On the other hand, for land-based casinos, the tax depends on the amount of chips purchased at each venue. There is also a disparity in horse racing, where the tax is applied to the full value of bets placed with bookmakers and totalizators. The new rates have faced significant criticism, with Betway operator Super Group withdrawing from the Indian market in response.
The Apex Industry Body for Online Gambling in India (AIGF) stated that this will make it much harder for businesses to survive, having an overall negative impact on the industry. This could lead to more players turning to black market operators as well as a loss of jobs.
New Regulations
In January, the Indian government unveiled a fresh set of regulations to oversee online gambling. These regulations stipulate that any online game offered must comply with existing laws. Additionally, proposals were made for the establishment of self-regulatory bodies, composed of online gaming businesses, tasked with formulating rules. Key areas of focus include player protection against harm, addressing addiction, preventing financial crimes, and ensuring the safeguarding of children.
