India is facing a growing crisis as offshore gambling platforms exploit regulatory loopholes to thrive in the country. A recent report by the Digital India Foundation (DIF) report highlights how unlicensed operators leverage digital advancements to establish a foothold. These entities, registered in jurisdictions like Curaçao, Malta, and Cyprus, bypass local laws through cryptocurrency transactions, social media promotions, and an extensive network of mule accounts.

Despite India's strict laws against most forms of gambling, digital payment systems and widespread internet access have made it easier for illegal platforms to operate. The DIF report identified websites like pari-match-in.com, stake.bet, and 1xbetind.in as key offenders, underscoring the urgent need for more effective enforcement measures.

Authorities worldwide are being urged to intensify enforcement against illegal offshore gambling sites, particularly in India, where unregulated operators continue to exploit legal loopholes. However, it’s important to recognize that not all online gambling platforms operate outside the law. Many reputable and well-regulated sites provide a safe and secure environment for players who wish to engage in online gaming responsibly. Those seeking legitimate options can explore trusted resources, such as FreeSpinsTracker.com, which has curated no deposit bonuses for Indian gamblers and which only promotes licensed online casinos that adhere to strict regulatory standards and player protection measures.

While cracking down on unlawful sites is necessary to prevent fraud and financial crimes, responsible gambling remains a legitimate pastime. Strengthening enforcement should go hand in hand with ensuring players have access to fair and regulated platforms, fostering a safer gaming ecosystem for all.

A Multi-Billion Dollar Black Market

A study by India’s Parliamentary Standing Committee on Finance reveals that illicit deposits in offshore gambling exceed $100 billion annually, growing at an alarming rate of 30% per year. This industry is not only a drain on the national economy, but the findings also raise concerns over financial crimes such as money laundering and tax evasion.

One of the most alarming aspects is the role of Indian mule accounts in these transactions. The Reserve Bank of India (RBI) estimates that such accounts process around $300 million in illicit funds each month, with only 10% of these funds being recovered. Individuals, often enticed by job offers or financial incentives, unknowingly enable these transactions, making law enforcement efforts even more challenging.

A Tax Evasion Crisis

Despite new tax laws mandating offshore gambling platforms to register with India’s Goods and Services Tax (GST) department, none have complied since the regulation came into effect on October 1, 2023. Investigations by the Directorate General of GST Intelligence (DGGI) into 658 offshore gambling companies have exposed widespread tax evasion, prompting urgent calls for stronger enforcement.

The issue extends beyond gambling operators to financial intermediaries such as digital wallets, shell companies, and payment gateways that facilitate transactions. Although several entities have been flagged for investigation, the scale of operations presents a formidable enforcement challenge.

Aggressive Advertising Fuels Expansion

Unlicensed gambling platforms have aggressively marketed themselves to Indian users through digital advertising and influencer partnerships. The Advertising Standards Council of India (ASCI) recently flagged 890 illegal gambling ads, 831 of which appeared on Instagram alone. These ads often feature misleading promotions, fake endorsements, and strategic placement during major sporting events like the Indian Premier League (IPL).

Influencer marketing has also played a pivotal role, with social media personalities and celebrities openly endorsing gambling apps, offering vulnerable consumers referral bonuses and discount codes to drive user acquisition. The lack of strict regulations on influencer promotions has allowed these deceptive tactics to persist unchecked.

Payment Ecosystem: A Loophole for Money Laundering

Illegal gambling operators have deeply embedded themselves into India's digital payment landscape, exploiting regulatory gaps. The DIF report outlines various methods used to process gambling transactions. For instance, many platforms leverage the Unified Payments Interface (UPI), initially routing funds through legitimate business accounts before transferring them offshore. Cryptocurrency transactions further complicate enforcement efforts, as digital assets provide anonymity, making it difficult for authorities to trace gambling revenues. Additionally, networks of shell companies and unregulated payment gateways act as intermediaries, facilitating transactions while obscuring the true origins of funds."

Regulatory Gaps and Enforcement Challenges

While the Indian government has attempted to block gambling websites and issue advisories, enforcement remains inconsistent. Offshore operators continuously evade restrictions by launching mirror websites and using Virtual Private Networks (VPNs) to maintain access.

Regulatory bodies have also struggled to curb digital advertising violations. A recent investigation found over 1,040 gambling-related ads running on Meta’s platforms despite the company's policies against such content. The RBI, despite having authority under the Payment and Settlement Systems Act, has yet to implement stringent measures against gambling-related transactions.

Strengthening the Regulatory Framework

The DIF report calls for a comprehensive approach to combat offshore gambling, emphasizing the need for stricter regulations and coordinated enforcement. One of its key recommendations is stronger digital advertising controls, urging collaboration between government agencies and digital platforms to restrict gambling promotions effectively. It also advocates for enhanced payment blocking measures, requiring financial institutions to strengthen due diligence in detecting and preventing illegal transactions.

To help consumers distinguish between legal and illicit operators, the report suggests implementing blacklisting and whitelisting mechanisms. Additionally, it calls for stricter influencer marketing regulations, proposing penalties for those who promote illegal gambling platforms. Given the cross-border nature of these operations, the report highlights the importance of international cooperation, stressing the need for stronger partnerships with global regulators to curb illicit gambling activities effectively.

Looking Forward: Promoting Responsible Gaming Practices

In response to the challenges presented in this report, industry groups such as the All India Gaming Federation (AIGF), Federation of Indian Fantasy Sports (FIFS), and E-Gaming Federation (EGF) have introduced a Code of Ethics (CoE) to promote responsible gaming. The CoE includes mandatory third-party audits, structured reporting, and consumer protection measures like age verification and spending limits.

While this initiative is a step in the right direction, experts argue that without robust enforcement, illegal gambling will continue to flourish. Strengthening digital enforcement, closing regulatory loopholes, and fostering international collaboration are crucial to mitigating the risks posed by offshore gambling platforms in India.