A report on the Indian gambling market found that illegal operators are "thriving," with just four platforms' websites receiving 1.6 billion visits in three months.
The Digital India Foundation's "Indian Gambling and Betting Market"
The report suggests stricter regulation of India's illegal websites.
The study analyzed the illegal gambling ecosystem across India, identified its contributing factors, and considered enforcement strategies adopted elsewhere globally to mitigate the growing threat of the black market. The research covered player activities of four leading offshore brands: Parimatch, Stake, 1xBet, and BateryBet.
India has about 448 million players, playing various forms of online games—from gaming consoles to social games, to real-money gambling.
In another study in October 2024 (Addressing Money Laundering Activities in the Online Gaming Ecosystem), the Digital India Foundation warned of fraud, money laundering, and terrorism financing activities in the country's online gaming industry.
The think tank calls for "financial institutions to enhance supervision, strengthen KYC practices, and improve [anti-money laundering] systems."
What is India's licensed gambling market like?
As for India's legal market, online sports betting is not yet legal in India. Table games and slot machines are only legal in two states, Goa and Sikkim, but only for live gaming in casinos within those states.
The Public Gambling Act of 1867 prohibits operating casinos, visiting casinos, and possessing gambling devices, although the act does indeed ban skill-based games.
This was followed by the Prize Competitions Act of 1955, which aimed to limit prize-giving gambling.
Despite initiatives taken by India's Ministry of Electronics and Information Technology in 2023, India has yet to establish a federal framework. The government department attempted to establish self-regulatory bodies to oversee the gambling industry. However, due to scale and complexity, the framework has stalled.
A report released by venture capital firm Lumikai in November 2024 estimates that about 10% of India's smartphone users (approximately 148 million) are paying to play online games. The study predicts that by 2029, India's real-money gaming revenue will reach $3.6 billion.
How do players access illegal gaming websites?
The Digital India Foundation's study found that a significant portion of traffic to illegal websites comes from social media. Illegal websites received 42.8 million visits, with 247.5 million visits referred by promotions on adult, affiliate, or streaming platforms.
However, the majority of visits (1.1 billion) were generated by players directly entering the website addresses. The study notes that this indicates significant success in past promotions and marketing by illegal operators.
Researchers also studied Google search trends from February 2021 to December 2024. The study shows that each year during this period, searches for illegal websites like Dafabet, 1xBet, Parimatch, 4rabet, and Khelo24Bet showed "exponential growth."
The study notes, "The vast scale and resilience of these markets highlight the complex network mechanisms through which India's illegal gambling and betting ecosystem operates, ensuring its influence and functionality."
The Digital India Foundation also noted an increase in the use of cryptocurrencies and cryptocurrency mixing services. The latter is a service that mixes a user's currency with other currencies, making it difficult to trace transaction routes.
Digital India Foundation Calls for Strategic Shift
The report calls for the Indian government to change its current "fragmented" enforcement plan. It suggests an "ecosystem-based" approach, not only targeting websites but also addressing key factors leading to cybercrime.
The Digital India Foundation studied comprehensive approaches to illegal websites in jurisdictions like the UK, USA, Denmark, and Norway. The study found that countries combining marketing restrictions with website blocking, payment blocking, and whitelisting achieved better results.
The report suggests India curb digital media channels that drive these websites to attract players and strengthen financial regulation to stop illegal transactions.
For digital platforms like social media operators, the report demands the enforcement of "strict advertising policies, prohibiting direct paid advertising, enhancing content review, and tagging/removing user-generated content related to the illegal market."
The report suggests that influencers promoting illegal operators should be immediately banned from platforms.
It also proposes that the Reserve Bank of India should develop policies or guidelines requiring payment systems, banks, and financial institutions to establish mechanisms to block transactions related to illegal gambling.
