A comprehensive white paper on illegal betting and gambling in India highlights the worrying links between illegal betting activities and national security threats, while advocating for a regulated domestic electronic gaming market as a possible solution. The report, co-authored by Indian Army Lieutenant Generals Vinod G. Khandare and Vinit Goenka, pointed out that illegal gambling has had a serious impact on India’s economy, security and data sovereignty. The report recommends solving the problem by establishing a regulated local video games market.
According to the report, India's illegal gambling industry is estimated to be worth $100 billion annually, recommending immediate regulatory action. It explains how offshore companies exacerbate risks to the economy and security by using complex financial networks and benami (dirty money middlemen) accounts to move money offshore, especially when they involve children.
The study describes how online gambling companies use cryptocurrencies and offshore servers to circumvent laws that make monitoring and enforcement more difficult. It highlighted how these organizations used India's Unified Payments Interface (UPI) to move funds through false inducements, ultimately delivering the funds to specific people and organizations.
India's central agency has found that certain gambling apps secretly send user data to servers located abroad, posing a major threat to national security. The apps' ability to access cameras, transfer backup data and record user activities has raised alarm bells given the current border tensions.
Properties or transactions carried out by an offshore company using a false identity or in the name of another person are called "benami".
As these platforms handle sensitive data and financial activities, they also present serious cybersecurity risks. The white paper highlights the growing use of cryptocurrencies in illegal gambling and encourages anonymity, making law enforcement more difficult.
Research also points to how illegal operators circumvent critical know-your-customer (KYC) and age verification procedures to exploit minors. Using cash payments to top up gaming wallets is possible on offshore services like Parimatch, making it easier to take advantage of younger consumers.
The white paper recommends creating a regulated domestic video game industry, accepting the limits of an outright ban, and treating illegal gambling as a national security threat as ways to address these issues. This would reduce capital outflows while providing monitoring, transparency, and consumer protection.
The study suggests that supporting the domestic gaming industry could offer significant economic and geopolitical advantages and calls for increased enforcement efforts to find and prosecute offshore operators. By providing access, financial assistance, tax incentives and skills, India has a skilled workforce that can take advantage of the expanding global gaming industry.
To address illegal gaming and betting in India, the white paper authors hope their findings and recommendations will spark policy dialogue and legislative initiatives.
