ETtech Explainer: What is the Mahadev app case troubling Bollywood celebrities?

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.

ED nabs courier of Mahadev App sent from UAE in relation to Chhattisgarh Assembly elections: Sources

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.

Growfast

Java Programming with ChatGPT: Learn using Generative AI

Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Digital marketing - WordPress Website Development

Marketing Digital marketing – WordPress Website Development By – Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert View Program

Mastering Microsoft Office: Word, Excel, PowerPoint, and 365

Office Productivity Mastering Microsoft Office: Word, Excel, PowerPoint, and 365 By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Financial Reporting and Analytics

Finance Financial Reporting and Analytics By – Dr. C.P. Gupta, Professor: Department of Finance and Business Economics, University of Delhi View Program

Mastering Full Stack Development: From Frontend to Backend Excellence

Web Development Mastering Full Stack Development: From Frontend to Backend Excellence By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Basics of Generative AI : Unveiling Tomorrow

Artificial Intelligence(AI) Basics of Generative AI : Unveiling Tomorrow’s Innovations By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Future of Marketing & Branding Masterclass

Marketing Future of Marketing & Branding Masterclass By – Dr. David Aaker, Professor Emeritus at the Haas School of Business, UC Berkeley, Author | Speaker | Thought Leader | Branding Consultant View Program

AI for Everyone: Understanding and Applying the Basics on Artificial Intelligence

Artificial Intelligence(AI) AI for Everyone: Understanding and Applying the Basics on Artificial Intelligence By – Ritesh Vajariya, Generative AI Expert View Program

AI and Generative AI for Finance

Finance AI and Generative AI for Finance By – Hariom Tatsat, Vice President- Quantitative Analytics at Barclays View Program

Mastering C++ Fundamentals with Generative AI: A Hands-On

Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Master in Python Language Quickly Using the ChatGPT Open AI

Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Human Potential and the Future of Employment

HR Human Potential and the Future of Employment By – Lynda Gratton, Prof. at London Business School, Speaker, Author, Global Thought Leader View Program

A2Z Of Finance: Finance Beginner Course

Finance A2Z Of Finance: Finance Beginner Course By – elearnmarkets, Financial Education by StockEdge View Program

Commercial Contract and Dispute Resolution

Legal Commercial Contract and Dispute Resolution By – Mukul Sharma, Partner- Cyril Amarchand Mangaldas View Program

SQL for Data Science along with Data Analytics and Data Visualization

Data Science SQL for Data Science along with Data Analytics and Data Visualization By – Metla Sudha Sekhar, Developer and Lead Instructor View Program

Modern Marketing Masterclass by Seth Godin

Marketing Modern Marketing Masterclass by Seth Godin By – Seth Godin, Best-selling author View Program

Financial Literacy i.e Lets Crack the Billionaire Code

Finance Financial Literacy i.e Lets Crack the Billionaire Code By – CA Rahul Gupta, CA with 10+ years of domain experience, trainer View Program

Labour Laws

Legal Labour Laws By – Ankita Ray, Partner: Cyril Amarchand Mangaldas View Program

Data Privacy with General Data Protection Regulation (GDPR)

Legal Data Privacy with General Data Protection Regulation (GDPR) By – Arun S. Prabhu, Partner (Head- Technology and Telecommunications): Cyril Amarchand Mangaldas View Program

Cybersecurity Masterclass

Technology Cybersecurity Masterclass By – Gaurav Khera, Partner, Risk Advisory: Deloitte View Program

Advanced Excel Course - Financial Calculations & Excel Made Easy

Office Productivity Advanced Excel Course – Financial Calculations & Excel Made Easy By – Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant View Program

Drafting Commercial Contracts and Dispute Resolution

Legal Drafting Commercial Contracts and Dispute Resolution By – Shafaq Uraizee Sapre, Managing Partner: Mumbai, Chandhiok and Mahajan View Program

AI and Analytics based Business Strategy

Artificial Intelligence(AI) AI and Analytics based Business Strategy By – Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program

Digital Marketing Masterclass by Neil Patel

Marketing Digital Marketing Masterclass by Neil Patel By – Neil Patel, Co-Founder and Author at Neil Patel Digital Digital Marketing Guru View Program

Budget Analysis, Forecasting & Control

Finance Budget Analysis, Forecasting & Control By – Mandar V. Joshi, Partner and Head of Technology Implementation, Management Consulting: KPMG View Program

A2Z Of Money

Finance A2Z Of Money By – elearnmarkets, Financial Education by StockEdge View Program

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.

Discover the stories of your interest

Blockchain

Cyber-safety

Fintech

E-comm

ML

Edtech

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.