Illegal betting apps now lure Indian users with pornographic content

Illegal gambling and betting apps have now adopted new modus operandi to acquire Indian users. These offshore gambling apps are enticing Indians by providing free pornographic content in exchange for downloading their illicit APK apps for smartphone users. Using chat messengers as a medium, these operators lure users to download the apps, allowing them to gamble and watch pornographic content simultaneously.

According to the 2021 Global Report on Corruption in Sport from the United Nations Office on Drugs and Crime (UNODC), the size of the illegal market for betting and gambling is estimated to be around $350 billion and $1.7 trillion, respectively.

Think Change Forum (TCF), an independent think tank, had released a report titled “State of the Betting and Gambling Industry in India.” According to the report, the offshore sports betting market receives an estimated $100 billion annually in deposits from India and has been growing at 20 percent per year in the last three years post-pandemic.

The report further observes that under the new GST regime, despite best enforcement efforts, the illegal offshore betting industry will continue to grow at 20% at the least, leading to a tax loss figure of Rs 6,72,205 crore by 2026.

Porn as freebie

Ritesh Bhatia, Founder of V4WEB Cybersecurity, a cybercrime investigations company, said, “Today betting apps are using unethical ways of luring Indians via pornographic content. Multiple groups on apps such as Telegram are used as a medium to provide free pornographic content to users. In return, users have to download APKs of illegal betting and gambling apps."

He further said, “The person gets to watch free porn and later starts betting on such illegal apps. The victim takes the bait of winning for a certain period and gambles more money, ending up losing every penny later.”

A report by Esya Centre titled “Offshore Online Betting and Gambling in India” highlights the accessibility of such illicit apps. Researchers behind the report initiated contact through the provided number on the website to gauge the ease of availing the service. The operator of VIP-Bet’s WhatsApp business account offered a monthly plan for 150 euros, promising inclusion in a Telegram group for betting after payment.

Bhatia says, “Money has been laundered in multiple digital formats and is being deposited in Indian bank accounts, which is then being laundered across the border. The government should implement stricter laws, and intermediaries such as messenger apps, banks, and digital payment apps must be vigilant and take proactive measures to stop such activities.”

According to the same report’s findings, Indian consumers have reportedly suffered significant losses due to similar operations. The risks are further exacerbated for minors, as many websites fail to conduct essential KYC or age verification checks. This lax approach enables minors to easily access these platforms, exposing them to inappropriate content and enticing them into unlawful activities.

Illegal betting is 10x bigger than RMG

Elaborating on the unethical operations of illegal betting apps in India, Siddharth Sharma, SVP of Business Strategy at Head Digital Works (A23), said, “Rogue operators siphon money out of our economy, leading to financial instability and fueling criminal activity. Moreover, their existence poses a risk to national security, as they act as channels for money laundering and terrorist financing.”

Sharma further said, “There’s no calculation or direct measurable effect that illegal betting apps have on our business. However, assuming they do not pay GST or deduct TDS, the illegal betting industry is easily ten times the size of the legitimate Real Money Gaming (RMG) sector in the country at the moment. Apart from revenue impact, the unethical and false marketing tactics used by these offshore players have a problematic effect on users in India.”

When asked if A23 has raised this issues with the government, Sharma said, “As a business and part of gaming federations like EGF and AIGF, we have actively engaged with relevant government bodies to address these persistent challenges. Measures such as a central regulatory framework to keep track of tax dues and compliance by all online gaming platforms, and the formation of a statutory regulatory body like SEBI for the online gaming sector to monitor financial practices and enable responsible gaming restrictions across applications, have been suggested to the involved stakeholders.”

Need government intervention

Roland Landers, CEO of the All India Gaming Federation, said, “Despite the ban, illegal apps continue to operate by constantly changing domain names. Regular tracking of these illegal websites clearly shows that they often resurface. These operators use aggressive tactics to mask their identities and frequently alter their operational details to evade detection. These apps do not pay TDS or GST to the government and divert users from legitimate Indian platforms.”

Landers further said, “The government should strengthen enforcement, establish a regulatory framework, spread consumer awareness, and include stakeholders to counter such issues.”

It should be noted that the growth of illegal betting apps in India poses severe financial and security risks. There is an urgent need for implementation of robust regulatory framework and vigilant monitoring to crackdown on illegal gambling and betting companies operating in India to safeguard the nation's economic and security interests.