Chennai: In the recent Indian Premier League season, six individuals were apprehended in Chennai due to their involvement in an online betting scam during the Chennai Super Kings (CSK) versus Sunrisers Hyderabad match. Investigations revealed that a policeman from Elephant Gate had connections with a gang that lured young people into participating in these illegal offshore betting sites.
Tragically, the state has witnessed multiple incidents where online gamblers have taken their own lives after suffering significant financial losses while playing online games.
To combat these illicit activities and regulate the e-gaming industry, the Tamil Nadu Online Gaming Authority (TNOGA), established last year, has initiated the registration of e-gaming entities. Despite acknowledging the threat posed by offshore betting sites, recent discussions with gaming companies have primarily focused on playtime and monetary limits for gamers on domestic platforms, as confirmed by multiple sources, including a TNOGA member.
These illegal betting sites, often based in Curacao, Cyprus, and Malta, manage to operate within India by leveraging virtual private networks (VPNs) and cryptocurrencies, effectively evading detection. Typically, young users are drawn to these platforms through referrals on WhatsApp or Telegram. Upon joining, users must register and invest money. Gamers typically pay through UPI or e-wallets and then engage in playing games or placing bets. Reflecting a national trend, games of chance such as spin reels, lottery, and bingo are more popular in Tamil Nadu compared to skill-based games such as chess, rummy or scrabble, as indicated by studies conducted by think tanks.
“Online gaming companies claim they can limit the time and money spent on their platforms, but technological advancements can bypass these restrictions. While registered companies can be held accountable, offshore betting companies operate like ‘ghosts,’ making them difficult to track despite requests for assistance from central agencies and foreign police. These entities pose a significant threat and require immediate attention,” said V Sathyamoorthy, a retired police inspector with Tamil Nadu’s cybercrime wing.
In Tamil Nadu, fewer than ten gaming companies have registered with TNOGA so far, as many are headquartered in Bengaluru and Mumbai, where scrutiny is less stringent, according to an anonymous TNOGA member. Similar to the Madras high court’s directive for Tamil Nadu to regulate rather than ban the sector, Kerala and Karnataka have established their own authorities. However, these states experience lower engagement on illegal sites, resulting in a missed opportunity for Tamil Nadu to tap into potential tax revenue, according to stakeholders.
Citing industry reports, Siddharth Sharma, senior vice president (business strategy) at Head Digital Works (A23) and a member of the E-Gaming Federation, said that the illegal gambling and betting industry is 36 times larger than legitimate online gaming companies. “This amounts to approximately Rs 4 lakh crore in unpaid taxes to the government. It’s not only a loss to the exchequer but also highly problematic from a security standpoint,” he asserted.
The Union ministry of electronics and information technology (MeitY) had previously addressed the issue by blocking over 138 offshore sites through IP address blocking, domain name system (DNS) filtering and payment blocking. However, these sites often resurface under new names, necessitating continuous updates and collaboration with Internet Service Providers (ISPs) and banks.
