How illegal sites allowed bets on Lok Sabha election results 2024: Decoded

Online betting has taken a controversial turn, moving from sports to high-stake political events. During the seven-phase high-voltage election campaigns, offshore websites lured Indian users to place bets ranging from Rs 10 to Rs 10 lakh, reported by mFilterIt, a digital risk management company.

Legal loopholes and grey areas

The Public Gambling Act of 1867 prohibits betting and gambling in public places but doesn’t specifically address online gambling. This gap in the law has allowed unscrupulous operators to thrive, with illegal apps and websites enticing users to bet on IPL matches and now, the Lok Sabha elections.

Illicit activities

mFilterIt reported that multiple websites were engaging in betting on Lok Sabha election results. These sites used mule accounts—bank accounts or UPI IDs used to receive money from bettors—and then transferred the funds to offshore accounts. Websites like Fairplay, JannatBook.com, om247.com, jaibook.com, satsport247.net, and bacardi777.com have been identified as major players in this illicit activity.

Note: A mule account refers to an account that is used to receive and transfer funds acquired illegally on behalf of others.

Impact

"Such offshore betting sites exploit the UPI system to collect payments, bypassing tax regulations and undermining the Indian financial ecosystem. Methods such as hawala and cryptocurrency transactions are used to transfer money offshore," says Dhiraj Gupta, Co-Founder and CTO of mFilterIt.

Illegal betting poses several risks:

Revenue loss: Significant revenue loss for the government due to tax evasion.

Data risk: Individual financial and personal data are at risk, along with legitimate economic activities.

Categories of bets

Bets on these sites included:

Seat-wise odds of win/loss for candidates

Margin of defeat for candidates on certain seats

State-wise odds of win/loss for political parties

Party-wise win prediction sets

Mule accounts in online betting

To bypass regulations from the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI), these sites use mule accounts to receive money via Indian payment instruments. Citizens, often tricked or bribed, unknowingly become part of this fraud.

Fraudsters trick people into sharing account details or using their UPI for transactions. Dhiraj Gupta said, "We detect 18 to 20 thousand cases every single day for national banks. These mule accounts are usually owned by regular people, who are either tricked into opening these accounts or knowingly use these accounts at the behest of some monetary payments."

Protecting yourself from fraud

"People should refrain from visiting such sites as they not only cause financial losses but also lead to the loss of confidential data and account information that could be misused. These websites use mule accounts for transaction laundering to facilitate the use of Indian payment instruments like UPI," Gupta advises.

"They trick people into knowingly or unknowingly using their account details and UPI for accepting and making transactions. This also causes GST violations as the individuals' and firms' account credentials used commit tax fraud. Be vigilant while making payments on such sites and do not share your personal information, as it could be used for account takeovers, he explains.