The IT Ministry has issued blocking orders against Mahadev Book, Reddyannaprestopro, and other ‘illegal’ betting and gambling sites, a government press release issued yesterday observed. 22 betting apps and websites have been targeted in total.
The developments come after the Enforcement Directorate’s inquiries into money laundering charges against Mahadev Book’s promoters, and raids of its premises in Chhattisgarh. Sources informed PTI earlier that the funds fudged could be as high as Rs. 6,000 crore.
In yesterday’s press release, the Minister of State for IT Rajeev Chandrasekhar added that the blocking requests had come from the Enforcement Directorate itself. “Chhattisgarh Government had all the power to recommend shutting down of website/app under Sec 69A IT Act,” said Chandrasekhar. “However, they did not do so and no such request is made by the State Government while they have been investigating it for last 1.5 years. In fact, the first and only request has been received from ED and it has been acted upon. Nothing prevented Chhattisgarh Government from making similar requests.” The Chhattisgarh state government is led by Chief Minister Bhupesh Bagel of the Indian National Congress.
The press release did not specify whether the apps were finally blocked under Section 69A of the IT Act—which gives the Indian government powers to do so on specific grounds, including protecting national security, public order, and more.
What’s this money laundering case about?: The Enforcement Directorate first filed its 197-page chargesheet (with over 8,000 pages of annexures) against Mahadev Book in October. The investigation found that Mahadev Book is run from the United Arab Emirates—and runs with a 70-30 % profit-sharing ratio with its franchisees. The Directorate alleged that “large scale hawala operations” are used to transfer the betting app’s earnings to offshore accounts, while “large” cash transactions are underway in India to advertise the platforms. The Enforcement Directorate’s investigations also led to the arrest of two people, including a Chhattisgarh police officer, for money laundering. They were booked under provisions of the Prevention of Money Laundering Act, 2002.
An aside—the gaming industry’s views on online and offshore betting sites: Online real money gaming companies in India offering non-gambling games (like rummy and poker) with wagering have often come under the regulatory scanner for the ‘harms’ they perpetuate on gamers. These included gaming addiction, and even suicide due to gaming-related financial losses. However, the industry has repeatedly held that online betting and gambling platforms—similar to those blocked in this instance—are the real culprits perpetuating harm against Indian gamers. Located in offshore tax havens, they fall outside India’s regulatory and tax scanners.
Notified earlier this year, India’s online gaming rules partially address this issue, by only allowing real money games approved by a private self-regulatory body to operate in the country. Experts added that games outside of this framework, like gambling and betting ones, can be blocked under Section 69A of the IT Act. Earlier this year, gaming lawyer Jay Sayta explained the significance of the move:
“Intermediaries such as hosting providers, news websites, social media websites, search engines etc. cannot host any game that is not recognised as a permissible online game by a self-regulatory body (primarily targeted at offshore betting portals) and cannot publish any advertisement or surrogate advertisement or promotion of an online game that is not a permissible online game (i.e. gambling/betting games or platforms)…The new rules are therefore expected to curb the menace of illegal offshore betting and gambling websites and their surrogates that are openly flouting the law and advertising through various means. The new rules would help in stopping promotional content of offshore betting websites and pave the way for swift blocking of domains and websites/apps engaged in illegal gambling or betting.”
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