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Centre mulls stricter UPI transfer regulations to curb illegal betting

The Centre has found 114 illegal betting and gambling platforms operating in the country. Such platforms are taking in UPI payments through proxy bank accounts

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BS Web Team New Delhi

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To shut down offshore platforms, which are illegally facilitating gambling and betting in India, the central government is considering several measures, including tighter rules for Unified Payments Interface (UPI) transfers, according to a report by The Economic Times (ET).

Sources told ET that the Centre has found 114 illegal betting and gambling platforms operating in the country. Such platforms are taking in UPI payments through proxy bank accounts. Hawala, crypto and other illegal routes are being used to remit funds collected in such proxy amounts. Preventing such activities include actively tracking and blocking unregistered online gaming companies, stricter verification processes, and tax collection at source (TCS) on UPI payments.

Domestic online gaming firms flagged several offshore betting and gambling platforms in a presentation to the revenue department last week. Registration has been made compulsory for offshore gaming companies from October 1.

On the recommendation of the Directorate General of GST Intelligence (DGGI), The Ministry of Electronics and Information Technology (MeitY) ordered the blocking of 138 offshore betting sites engaged in gambling in July. Lotus365, Dafabet, Betwaysatta, Parimatch, Fairplay, and1XBET are some major platforms running their operation illegally. These betting companies deploy surrogate news websites and change payment proxies linked to Indian bank accounts.

Most of these firms are registered in Cyprus, Malta, Curacao, Mauritius and the Cayman Islands, jurisdictions which permit gambling and betting.

These firms have now begun to launch aggressive campaigns on Instagram and Facebook after the central government gave an advisory in April to media companies and streaming platforms not to carry their advertisements.

A senior finance ministry official said that industry representatives informed the government about illegal firms that are using various proxy sites, and the Centre is in the process of identifying and blocking them. In June, Revenue Secretary Sanjay Malhotra told ET that payment gateways can be used to track offshore online gaming companies.

The Enforcement Directorate has already begun looking into instances of money laundering by some of these sites.

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First Published: Oct 17 2023 | 9:53 PM IST

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