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India’s foreign transactions and money laundering enforcer has raided 25 locations across the nation suspected of housing foreign-controlled online gambling operations.
The Directorate of Enforcement (ED) said on Wednesday (May 24) that search and seizure operations took place in the capital Delhi and four other states on Monday and Tuesday as part of a campaign against India-facing online interests.
The 11 raids in Delhi, together with seven in Gujarat, four in Maharashtra, two in Madhya Pradesh and one in Andhra Pradesh, followed probes into websites registered in “small island countries” such as Curaçao, Malta and Cyprus, the ED statement said.
“However, all of them are linked to Indian bank accounts opened in the name of proxy persons who have no links with online gaming activity,” the statement said.
“The amount so collected from [the] general public through gaming websites is then routed through multiple bank accounts and finally remitted out of India by mis-declaring the purpose of remittances against import of services/goods,” it said.
The statement said the seizures involved a number of operators of “hawala” underground banking structures, naming four hawala bosses and their networks.
“Hundreds of companies have been opened by the key persons in the name of their employees for layering and sending remittances to the tune of [approximately 40bn rupees ($483m)] in the guise of payments for import of goods and services,” the statement said.
Investigators seized 2m rupees and about $2,700 in cash, froze 55 bank accounts and confiscated documentary and electronic evidence of operations, along with remotely accessed laptops, taxpayer and personal ID cards, and other equipment.
The raids represent an expansion of anti-online gaming enforcement and dovetail with central government efforts to disrupt foreign operators, including coordination with state and Union Territory governments to eliminate illegal outdoor advertising, coordinated blocking of online gaming remittance channels via payments companies and other financial institutions, and prosecution of tax evasion, including Ukrainian operator Parimatch.
Although the central government’s crackdown on the online industry is in its infancy, some analysts say they are already sensing impacts on foreign earnings.
In April, India introduced formal central government regulation of online gaming that provides clarity on self-regulation, know your customer (KYC) obligations and other matters, although industry observers remain concerned about indistinct elements such as the scope of illegal “wagering”.
