SUMMARY
- ED has uncovered a scheme involving money laundering through illicit gaming and betting apps through kirana stores.
- The kirana store proprietors believed they were operating within the regulatory framework of the RBI for DMT.
- DMT framework permits the transfer of funds to any bank account within the country.
The Enforcement Directorate (ED) has uncovered a scheme involving money laundering through illicit gaming and betting apps through kirana stores.
According to a report by The Times of India, the proprietors of these kirana stores were not aware of their involvement in illegal gambling activities. Instead, they believed they were operating within the regulatory framework of the Reserve Bank of India (RBI) for domestic money transfers.
The domestic money transfer (DMT) framework permits the transfer of funds to any bank account within the country. This service enables customers to send money quickly to any IMPS (immediate payment service) or NEFT (national electronic funds transfer) supported account within the nation, with the funds being credited to the recipient’s account almost instantly.
The investigation revealed that this scheme was designed to offer convenient and secure methods of money transfer for migrants who do not have access to traditional banking services.
Additionally, the investigation by the ED led to the discovery of a 40-year-old owner of a mobile accessories shop in a slum in Dahisar and another similar case at a retail shop in Naya Nagar, Mira Road.
This revelation comes at a time when the ED has stepped up its efforts to monitor gambling applications, particularly in the face of the increasing influence of offshore betting platforms in India, just a few weeks ago.
According to previous reports, more than two dozen offshore gambling applications are currently under scrutiny by the ED for facilitating the remittance and round-tripping of funds, as these platforms have been responsible for causing gamblers to lose significant amounts of money, reaching INR 1 Lakh Cr, as mentioned in the report.
Illegal gambling entities, which are predominantly located outside the country, use small convenience stores, small retail outlets, and even counterfeit online e-commerce websites to distribute winnings in small amounts, making it challenging for government agencies to trace the illicit funds, as stated in the report.
Among the apps being investigated are Mahadev Online Book, FairPlay, and MagicWins. Recently, the ED carried out operations across Gujarat and Maharashtra, targeting properties associated with MagicWins, and it was disclosed that the app also had similar payment networks in Haryana and Punjab, utilizing DMT for payout of winnings, as detailed in the report.
The legal uncertainty surrounding online gaming and betting apps has allowed these operators to thrive, with the ED investigating numerous cases of money laundering linked to hundreds of such platforms, as mentioned in the report.
Earlier in May, the Ministry of Consumer Affairs was considering legal action against indirect and indirect advertisements that promote illegal betting and gambling, especially during cricket and election seasons, when such activities are at their peak.
While the Ministry of Information and Broadcasting (MIB) also advised all endorsers and influencers on social media to avoid promoting or advertising, including surrogate advertisements, of offshore online betting and gambling platforms, in March.
