On October 14, Kumud Rishabh, a third-year student of mass communication in Delhi, won Rs 74,000 on an online betting app after he correctly predicted that India would win a cricket World Cup match against Pakistan.

Rishabh already had winnings of Rs 1 lakh from his earlier bets. So, on October 15, the 23-year-old decided to go all in by betting Rs 1.74 lakh on England defeating Afghanistan – a rather safe call to make. But, defending champions England ended up losing to Afghanistan.

Rishabh lost all the betting money he had made so far during the World Cup. But that did not stop him from betting on the remaining matches.

“There is always a next match,” Rishabh said. “If I can lose all my money, I can win it back too.”

Despite the financial risks involved in gambling, Indians seem to have taken to online betting apps with gusto. By marrying the huge appetite for cricket with the temptation to make easy money, online betting appears to have found a booming market in the country.

A report published in October by the Think Change Forum, an economics think-tank says that the estimated size of the online betting industry in India is Rs 8,20,000 crore of which 80%-90% accounts for gambling in cricket matches.

The business, however, stands on shaky legal grounds. Experts point out that it is operating through loopholes in regulation, which leave users exposed to fraud by betting platforms.

The burgeoning business

The prospect of earning big money quickly has drawn a young clientele to betting apps.

Rishabh was just 19-years-old during the 2019 edition of the Indian Premier League, when he was first introduced to apps on which users pay to create fantasy teams on every match day. One of the apps, he said, was offering a total prize money of Rs 1 crore every day for a fee of Rs 39 to create a team. The users would get points based on the performance of the players they picked, and the prize money generated from the entry fee of users would get divided among them on the basis of a percentile score.

“The ads used to say I could win Rs 1 crore by investing only Rs 39, which I found extremely attractive,” Rishabh said. “I used to create multiple teams in a day as putting in Rs 100 or Rs 200 did not seem like a big deal.”

Rishabh made some modest winnings on fantasy team apps, but soon shifted to platforms that allow betting on the outcome of matches as they offered higher returns.

At one point, Rishabh along with a friend, operated close to 50 profiles on betting apps registered under different email IDs to be able to improve his chances of winning. “You can bet on various aspects of the game, like outcome of the toss, outcome of the match, the number of runs that would be scored and so on,” Rishabh said. “So, I could bet on a number of possibilities through different profiles on the apps.”

Although he has made losses on the apps, Rishabh said he was confident of recovering them in the future.

Fans gather in Mumbai to watch the India vs Australia World Cup final match on November 19. (Photo: Francis Mascarenhas/Reuters)

This optimism about being able to recover losses ran common among most of the young online betters Scroll spoke with. Shekhar Lalwani, 25, who works at a call centre in Gurugram, lost close to Rs 2 lakh after India’s loss to Australia in the World Cup final last month. But he is hopeful that he will recover his losses during the next edition of the IPL scheduled for April and May and the 20-over World Cup after that.

Lalwani likened betting to investing in equities – investors rarely pull out of the stock market if the prices of their shares drop. “My initial investment was only a few thousand and I believe that’s all that I have lost,” he insisted. “The rest I had won by betting itself, then I lost and I will win back again.”

But this optimism could extract a heavy toll.

There are several news reports about users, burdened by betting losses, resorting to crime or even killing themselves.

Eight of the 12 betting app users Scroll spoke to said that they made losses more than Rs 50,000 at some point.

Even if users don’t make losses, the betting apps are sure of turning a profit. Roland Landers, chief executive officer of the All India Gaming Federation said that bookmakers of these apps ensure this by setting the odds accordingly.

“It does not matter how many users won or lost, the odds are set such that the betting platform will always end up making huge gains, “ he said. The apps offer higher returns on outcomes that are less likely, essentially luring users to put money at a greater risk, he added.

Professor Ranganath Tannir, co-author of the Think Change Forum report said that in 2024 betting apps are projected to earn an average revenue of $292 (around Rs 24,000) from every user. This ensured an overall profitable business for these platforms even if a section of users won.

The legality question

The most striking aspect of online betting apps is that they have created an easy pathway to gambling on live sports, which is otherwise illegal in India.

The legality of gambling in India hinges on the distinction between game of skill and game of chance. Games of skill, in which players use their memory, knowledge, judgement or expertise to make decisions, are constitutionally protected by a 1996 Supreme Court judgement. But games of chance, where outcomes are based on luck, enjoy no such protection. In 2022, the Supreme Court held that fantasy sports were games of skill. But that is not the case with betting on live sports.

Mumbai-based gaming lawyer Jay Sayta explained that the owners of betting apps manage to bypass Indian law by running them through offshore companies based in tax haven countries like Curacao, Cyprus and Malta.

“These are shell companies with opaque shareholding patterns,” Sayta told Scroll. “So the question of legality is not just about the game of skill versus game of chance aspect. Questions about money laundering and violation of foreign exchange rules are involved here.”

Sayta added that even when the government goes after betting apps, the platforms rebrand themselves under a different domain name. “In November, the government had banned 22 apps in the Mahadev app money laundering case, but Mahadev itself is now running under the domain name Mahakaal,” he pointed out.

Landers of the All India Gaming Federation said that there have been instances where betting platforms have shut shops after taking money from users. “In such cases, the users do not even approach the police as they are scared of being prosecuted for illegal gambling,” he said.

Lack of regulation attracts users

The loopholes in regulation, however, often prove to be the selling point for these apps, experts said.

For example, 24-year-old student from Delhi, Shweta Pathania, prefers the Pari Match app over others as it requires the user to complete fewer steps while making payments to place a bet.

Sayta said this was another instance of gaps in the regulation of betting apps.

“Many of these apps would pay some money to poor and less educated people in order to use their UPI [Unified Payments Interface] IDs for taking bets,” Sayta explained. “So, while placing a bet, an app user could technically be just transferring money to a vegetable vendor.”

The Indian Premier League is a popular event among betting app users. Credit: Reuters

The apps engage several such UPI users and the money collected in those accounts are then transferred to the betting platforms by various channels like hawala and cryptocurrency, Sayta said. “The apps usually transfer the money out every one or two days and often keep changing the UPI IDs they use to avoid scrutiny from regulators about suspicious transactions.”

For the user, this makes payments easier compared to legal gaming platforms like fantasy apps, which have an additional step in the payment process, where they ask for the UPI ID and other personal details of the users. For the online betting apps, which are increasingly based outside India, this helps them avoid the regulations involved in transferring money abroad.

Landers told Scroll that since offshore betting apps are not liable under Indian laws, they charge no Goods and Services Tax from users and that no part of the winnings are deducted in the form of Tax Deducted at Source, or TDS.

Another example of a loophole in the regulation of the betting space is how the apps bypass the ban on advertising of gambling platforms by getting social media influencers to do surrogate promotion.

For 27-year-old Shravan Singh from Jamshedpur, this could well be the reason to get back to betting which he had quit after losing nearly Rs 1.5 lakh during the 2021 edition of the IPL.

“I often see videos of [YouTuber and reality TV star] Elvish Yadav suggesting apps on which there is a better chance of winning,” Singh said. “On [messaging app] Telegram, I still subscribe to channels run by [social media influencer] Malik Mumbai for tips on online betting.”

“I had quit betting as I could not sustain any more losses but I am tempted during every big match,” Singh said.