Online gaming scams: Small bets win, big bets lose - how they work

Imagine you bet just Rs 10 on an online game, win, and think, "Why not try more?" Encouraged by your small success, you raise the stakes to Rs 500, aiming for a big win. But this time, you lose everything.

This is exactly how a gang in Rajasthan's Malar Road, Phalodi district, lured people into their trap. They operated a scam through a gaming app called "Lotus," where they manipulated outcomes to ensure small betters won while those with larger bets always lost.

Operating from a rented house, the fraudsters rigged games, earning over Rs 1 crore before the police apprehended them on Thursday.

"A diary found during the raid revealed transactions running up to more than Rs 1 crore," said the police in a statement. The operation, dubbed "Operation Firewall," led to the arrest of five individuals on the night of October 9 in Keshav Nagar, Phalodi city. The suspects hailed from Uttar Pradesh and Bihar.

The police confiscated 25 mobile phones, five laptops, seven Aadhaar cards, 24 ATM cards, and diaries detailing 29 bank accounts. Additionally, 33 SIM cards and multiple notebooks were found in the location.

An officer involved in the investigation noted that action is underway to freeze 60 bank accounts believed to have been used in transactions involving substantial sums in this fraudulent activity.

In a related but much larger case, Saurabh Chandrakar, the mastermind behind the Mahadev online betting app scam, was arrested from Dubai today. This scam, operating through illegal betting and gambling websites, is believed to have swindled over Rs 5,000 crore from unsuspecting users.

Betting regulations in India

"Online betting is largely unregulated, which creates a legal grey area that can expose users to financial risks and potential fraud," Dhiraj Gupta, co-founder and CTO of mFilterIt, a digital risk management company, said.

Explaining further, Adarsh Somani, partner at Economic Laws Practice, added, "The legality of betting in India varies by state. Most states prohibit betting, though some have adopted the Public Gambling Act of 1867 or created their own regulations. States permitting betting generally distinguish between games of skill and games of chance, with the former being more likely to be allowed."

How to protect yourself from online betting fraud

To safeguard against online betting scams, it’s advisable to stick to regulated platforms. Adarsh Somani suggests users only engage with platforms that comply with Indian laws, including Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.

Shobhit Goyal, co-founder and CEO of BeFiSc, a fraud detection and identity verification firm, outlined some tips for protection:

Use verified platforms: Stick to well-known, licensed platforms and check for regulatory approvals.

Be cautious of big bonuses: Unrealistic offers could indicate fraud. Always read the terms and conditions.

Enable two-factor authentication (2FA): This adds an extra layer of security to your account.

Avoid sharing personal information: Never share sensitive details like OTPs or passwords.

Monitor account activity: Regularly check your transactions for anything unusual and report suspicious activity immediately.

Steps to take if you've been defrauded

If you've fallen victim to a betting scam, immediate action is important. "Report the fraud to your bank or payment provider to block further transactions and possibly initiate a chargeback," advised Dhiraj Gupta.

Filing a complaint with the Cyber Crime Cell in your state is also recommended. Keep all related communication, receipts, and transaction details, as these can aid the investigation.

"Inform your bank to block or reverse the transaction, and consult an attorney for legal advice if the amount involved is substantial," added Somani.

Betting app scams: The hidden dangers

Betting app scams use fraudulent techniques to trick users and steal their money. Prometteur Solutions, a mobile app and web development firm, highlighted the growing threat, stating, "With the rise in sports betting apps, scammers have found new ways to target unsuspecting bettors."

Not only can these scams cost you financially, but they also pose risks to your personal data. Scammers often sell stolen information on the dark web, which can lead to further identity theft and fraud.

Prometteur Solutions warned, "Falling for these scams can ruin your mobile sports wagering experience. It leaves a bad taste and makes it harder to trust legitimate operators."