ED Probe Finds Illegal Gaming & Betting Apps Laundering Money Through Kirana Stores

The Enforcement Directorate (ED) has reportedly discovered a money laundering operation being operated by illegal gaming and betting apps via kirana stores.

As per TOI’s report, these kirana store owners were unaware of their involvement in illegal gambling activities rather were convinced that they work under the RBI’s domestic money transfer (DMT) framework.

In simple terms, the DMT framework allows money transfers to any bank account within the country. Through this service, a customer can send money instantly to any IMPS (immediate payment service) or NEFT (national electronic funds transfer) supported bank account in the country, and the receiver will get it credited into their account within seconds.

The report said that the scheme is intended to provide easy and secure money transfer options for migrants who lack access to formal banking services.

Also, the investigation led by ED led them to a 40 year old mobile accessories shop owner in a Dahisar slum, and a similar discovery was made at another retail shop in Naya Nagar, Mira Road.

This comes at a time where the ED intensified its vigilance on such gambling applications, on the rising influence of offshore betting platforms in India, a few weeks ago. 

As per the earlier reports, over two dozen offshore gaming applications are currently under the radar of ED for remitting and round-tripping funds, as they have caused gamblers to incur losses to the tune of INR 1 Lakh Cr.

It is to note that illegal gambling labels, largely based outside the country, find kirana stores, small retail outlets and even fake ecommerce websites to disburse winnings in small denominations, making it difficult for government agencies to track the illicit funds, said the report.

Among the apps under investigation are Mahadev Online Book, FairPlay, and MagicWins. Recently, ED conducted raids across Gujarat and Maharashtra, targeting properties linked to MagicWins, and it was revealed that the app had similar payment networks in Haryana and Punjab, using DMT to payout winnings, based on the report.

Legal ambiguity surrounding online gaming and betting apps has allowed such operators to flourish, with the ED investigating multiple cases of money laundering linked to hundreds of such platforms, the report added.

Earlier in May, the consumer affairs ministry was mulling action against indirect and surrogate advertisements promoting illegal betting and gambling, especially during the cricket and election season, when such activities are on the surge.

While the Ministry of Information and Broadcasting (MIB) also advised all endorsers and influencers on social media to refrain from promoting or advertising, including surrogate advertisements, of offshore online betting and gambling platforms, in March.