Insights into India’s Illegal Gambling Landscape

A recent study on the Indian gambling landscape has revealed that illegal operators are “thriving,” with four notable platforms attracting a staggering 1.6 billion visits in just three months.

Released by the Digital India Foundation, the report titled “Gambling and Betting Market in India” advocates for more stringent regulations regarding illegal gambling sites across the country.

The report provides a comprehensive analysis of the underground gaming ecosystem in India, identifying factors that contribute to its growth and examining the enforcement strategies employed in other countries to combat the black market. The assessment focused on player engagement with four major offshore brands: Parimatch, Stake, 1xBet, and BateryBet.

Currently, India is home to approximately 448 million players engaged in various forms of online gaming, which includes everything from console games to social gaming, as well as real-money gambling.

In a previous report from October 2024 titled “Combating Money Laundering in the Online Gaming Ecosystem,” the Digital India Foundation highlighted issues like fraud, money laundering, and terrorism financing within the online gaming sector.

The think tank has urged for “enhanced oversight, stronger KYC practices and improved [anti-money laundering] systems by financial institutions.”

When it comes to the licensed gambling market in India, online sports betting remains illegal. Only two states, Goa and Sikkim, permit table games and slots, but only in physical casinos.

The 1867 Public Gambling Act forbids the operation of gambling establishments, as well as visiting them and possessing gambling paraphernalia, with exceptions made for games of skill. Following that, the Prize Competition Act of 1955 aimed to limit gambling that awards prizes.

Despite efforts by the Ministry of Electronics and IT in 2023 to establish self-regulating bodies for the gambling sector, no federal regulatory framework currently exists in India, hampered by the intricate nature of the industry.

A report from venture capital group Lumikai, published in November 2024, estimated that around 10% of Indian smartphone users—approximately 148 million—are engaging in paid online gaming. This study also projected that real-money gaming revenue in India could hit $3.6 billion by 2029.

The Digital India Foundation’s analysis revealed that a considerable amount of traffic directed to illegal gambling sites originated from social media platforms. This contributed to about 42.8 million visits, while 247.5 million were referrals from adult content, affiliate links, or promotions on streaming platforms.

Notably, the majority of visits—1.1 billion—were due to players entering URLs directly, indicating the prior marketing success of these illegal operators.

The researchers examined Google search trends between February 2021 and December 2024 and observed a consistent “exponential rise” in searches for illegal gaming sites such as 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.

The Digital India Foundation also pointed out an increased utilization of cryptocurrencies and mixing services that obscure transaction trails.

The report has urged the Indian government to transition away from its “fragmented” enforcement strategies, recommending a shift to an “ecosystem-based” approach that addresses not only the websites themselves but also the enabling factors behind the activities.

By examining jurisdictions like the UK, US, Denmark, and Norway, the foundation found that those which combined marketing restrictions with website and payment blocking saw more favorable results.

The recommendations include curbing digital media platforms that facilitate player acquisition for these illegal sites and tightening financial regulations to prevent illicit transactions.

For digital entities, including social media outlets, the report advocates the enforcement of “strict ad policies to ban direct paid advertisements, enhance content moderation to flag/remove user-generated content” associated with illegal markets.

Furthermore, it proposes that influencers promoting these illegal operators should face immediate bans from the platforms they use.

Lastly, it suggests that the Reserve Bank of India develop guidelines that mandate payment systems, banks, and financial organizations to implement mechanisms for blocking transactions related to illegal gambling activities.