Joint effort from big tech, govt crucial to fight illegal online gambling, betting: Digital India Foundation

New Delhi: A joint effort by the government and big tech players like Google and Meta is required to dismantle the fast-growing illegal online gaming sector in India, according to the Digital India Foundation.

The think tank, in a report revealed that illegal operators sustain their operations through a highly sophisticated network of enablers of digital advertising and marketing channels, payment ecosystem, and software providers.

"This illegal sector exceeds $100 billion per year and is growing fast at a rate of 30 per cent per year, driven by increasing digital adoption, technological advancements, and regulatory uncertainty.

"Indian regulators need to actively collaborate with social media companies such as Google and Meta as enforcement of controlling gambling-related promotions remains highly inconsistent," the report titled ‘Illegal Gambling and Betting Market in India: The Scale and Enablers’ said.

Arvind Gupta, Founder of Digital India Foundation, said this has led to a rise in money laundering and illegal payments.

Companies like Google and Meta profit from advertising and Search Engine Optimisation (SEO), which may explain why they often fail to take decisive action against illegal betting and gambling firms, he said.

"At least one-third of their traffic is coming via these websites. The big tech is making money off the advertising, and these websites are prospering. Influencers are wrongly promoting them without knowing the impact of this," Gupta told PTI.

As per the report, the scale of illegal gambling and betting in India is immense, with over 1.6 billion visits recorded across four platforms--Parimatch, Stake, 1xBet, and Battery Bet--between October and December 2024.

The analysis indicated that social media contributed significantly to this traffic, generating 42.8 million visits during the period. This traffic was largely driven by direct paid advertisements on platforms like Facebook, as well as promoted content, influencer marketing, and social media engagement campaigns.

It is pertinent to mention that these operators maintain multiple mirror websites to circumvent regulatory takedowns.

"They're making money illegally, doing money laundering, and they're funding the big tech. So, big tech has no interest in stopping their existence. They are bypassing the payment norms by creating surrogate companies and taking payments via them, or creating a distribution channel and taking payments via them," Gupta said.

All these firms--about 600 of them are offshore--are avoiding GST rules of India, he noted.

"They should have a rule of conduct where they stop hosting gambling ads and promoting illegal sites--sites which don't pay GST, for instance. The financial and payment systems should block payments to these sites," he added.

Gupta advocated for a multi-pronged approach and reverse gameplay as the need of the hour.

Experience from multiple jurisdictions including Norway, the UK, Denmark, Belgium, and the US shows that blocking alone is ineffective, the report said.

Countries that implement a combination of strategies, including website blocking, marketing restrictions, payment blocking, and whitelisting/blocking, have seen more effective results in combating illegal betting and gambling.

Therefore, India must shift from the current fragmented enforcement strategy to a comprehensive ecosystem-based approach that effectively disrupts the key enablers sustaining illegal betting and gambling operations.

This includes curbing digital media channels that drive user acquisition for these platforms, tightening financial regulations to block illicit transactions, and enhancing enforcement mechanisms via a whitelist/blocklist to sustain long-term disruption.

Gupta said whitelisting companies who pay taxes and blacklisting the rest will help reverse the damage to an extent.

At the same time, it is important to encourage the industry and not stifle innovation, he added.