The government on Sunday blocked the operation of several illegal betting and gambling apps, including the controversial Mahadev app, on a request by the Enforcement Directorate. But what prompted the action and how is Bollywood embroiled in the controversy? An explainer.
In a late-night order on November 5, the ministry of electronics and information technology blocked several betting and gambling apps, including Mahadev Book Online, over allegations of money laundering. Earlier, some of the people related to the operations of the Mahadev betting app were arrested by the Enforcement Directorate and charged with various sections of the Prevention of Money Laundering Act (PMLA).
In February this year, the IT ministry had issued similar orders to bar the operations of 138 betting and gambling apps on an “urgent” and “emergency” basis for “improper data storage and transfer” to other countries as well as money laundering.
Online betting and gambling are illegal as per the Information Technology Rules of 2021, which were amended in April this year with relevant sections for online gaming. As per the new rules, any gaming intermediary which allows for betting and wagering on the outcome of a game or an event will not be permitted to operate in India.
Mahadev app: How does it work?
Apps like the Mahadev Book Online or reddyannaofficial.in are hyper-local websites, which cater to audiences only from certain states or territories. These apps urge users to interact with bookmakers or bookies through instant messaging apps such as WhatsApp and Telegram as well as social media platforms such as Instagram.
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These websites run through a large syndicate of small apps built using custom Android application packages or APKs. Once a user downloads these apps, they contact an admin of the website, who in turn generates a token or user ID for them.
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The user can then use the generated token to place their bets through instant messaging apps. Money is transferred through online methods such as the Unified Payments Interface (UPI).
Why are these apps and websites illegal?
Apart from flouting the government laws and rules, which bar online betting and gambling explicitly, these apps and websites also skirt laws around transfer of money from one country to another.
For example, the ED had in its chargesheet alleged that the Mahadev app was running a franchise-type model in which while the promoters and the owners of the app are abroad, they use WhatsApp groups and call centres to appoint people to run their businesses in India.
The handlers in India share the profit with the promoters in a 70:30 ratio. These handlers, also called panel operators, are entirely responsible for the payout of monies to the winners, receiving bets from users, and transferring money to the promoters through the hawala route.
ED has estimated that the Mahadev Book Online app had roughly 2,000 such panel operators in India, who would take small bets from users and place bets on live games and events.
Sun and stars
The ED had also summoned several film stars, including Ranbir Kapoor and Shraddha Kapoor, and comedian Kapil Sharma, in connection with receiving money for promotion of the app. Other actors such as Huma Qureshi and Hina Khan have also been questioned by the ED in connection with receiving money for promoting the app.
Other allegations
In its probe, the ED has also alleged that the promoters of Mahadev Book Online had paid more than Rs 500 crore to incumbent Chhattisgarh chief minister Bhupesh Baghel to be used in the upcoming state elections scheduled to be held on November 7 and 17.
Meanwhile, minister of state for electronics and information technology Rajeev Chandrasekhar has said that though the Chhattisgarh government had all the power to recommend shutting down of website/app under Sec 69A of the Information Technology Act of 2000, it did not do so for the last 18 months even as it was investigating the app and the website.