India requires combined enforcement approach to illegal gambling sites, report recommends
The Gambling and Betting Market in India report, published by policy think-tank Digital India Foundation, has recommended stricter regulation on illegal sites in India.
It has analysed the illegal gaming ecosystem across India, mapping its enablers and considering enforcement strategies used elsewhere globally to mitigate the growing threat of the black market. It covers player activity across four leading offshore brands: Parimatch, Stake, 1xBet and BateryBet.
There are an estimated 448 million players in India across all forms on online gaming – from consoles to social games to real-money gambling.
In another study in October 2024 (Combating Money Laundering in the Online Gaming Ecosystem), the Digital India Foundation warned against fraud, money laundering and terrorism financing in the country’s online gaming industry.
The think tank called for “enhanced oversight, stronger KYC practices and improved [anti-money laundering] systems by financial institutions”.
What does India’s licensed gambling market look like?
In term of what India’s legal market looks like, online sports betting is not yet legal in India. Table games and slots are legal in just two states – Goa and Sikkim – but only in-person at casinos in the state.
The Public Gambling Act, 1867, prohibits the operation of gambling houses, visiting a gambling house, as well as being in the possession of a gambling device – although it does carve out games of skill.
This act was followed by the Prize Competition Act of 1955 that sought to restrict gambling that awarded prizes.
There is no federal framework in place in India despite moves in 2023 by the ministry of electronics and IT. That government wing sought to create self-regulatory bodies to oversee the gambling industry. However, that framework has stalled due to size and complexities.
A report by venture capital firm Lumikai, published in November 2024, estimated that around 10% of Indian smartphone users, around 148 million, are paying to play online games. That study projected that real money gaming in India would reach $3.6 billion in revenue by 2029.
How are players accessing illegal gaming sites?
Digital India Foundation’s study found that a significant chunk of traffic to illegal sites came through social media. This accounted for 42.8 million visits to illegal sites and referrals via adult, affiliate or promotion on streaming platforms made up 247.5 million visits.
However, the vast majority of visits, 1.1 billion, were generated by players directly entering URLs. The study notes that this indicates a marked success of illegal operators’ past promotional and marketing success.
Researchers also looked at Google search trends from February 2021 to December 2024. For each year in that period, the study marked an “exponential rise” in searches for illegal sites Dafabet, 1xBet, Parimatch, 4rabet and Khelo24Bet.
“The vast scale and resilience of these markets underscore that the illegal gambling and betting ecosystem in India operates through a sophisticated network of mechanisms that ensure its reach and functionality,” the study stated.
Digital India Foundation additionally noted a rise in the use of cryptocurrencies and cryptocurrency mixing services. The latter is a service that mixes a user’s coins with others so it is difficult to follow the line of transaction.
Digital India Foundation calls for strategy shift
The report has called for the Indian government to shift from its current “fragmented” enforcement plans. It recommended swapping to an “ecosystem-based” approach that tackles not just the websites but the key enablers of the activity.
Digital India Foundation looked at jurisdictions such as the UK, US, Denmark and Norway for mixed approaches to illegal sites. It found that countries that combined marketing restrictions with website blocking, payment blocking and whitelisting achieved better outcomes.
The paper has recommended that India curb digital media channels that are driving player acquisitions for these sites, as well as increasing financial regulation to stop illicit transactions.
For digital platforms, such as social media operators, the report has sought the enforcement of “strict ad policies to ban direct paid advertisements, enhance content moderation to flag/remove user-generated content” connected to illegal markets.
It suggested that influencers promoting illegal operators should face immediate platform bans.
It has also put forward that the Reserve Bank of India should formulate policies or guidelines that require payment systems, banks and financial institutions to create mechanisms that would block transactions that were linked to illegal gambling.