ED investigation exposes illegal money laundering apps through Kirana stores

The Enforcement Directorate (ED) has reportedly unearthed a money laundering operation being run by illegal gaming and betting apps through Kirana stores

Further, the ED investigation led them to a 40-year-old owner of a mobile phone accessories shop in Dahisar slum, while a similar discovery was made at another retail shop in Naya Nagar, Mira Road

The applications tested included Mahadev Online Book, FairPlay and MagicWins.

The Enforcement Directorate (ED) has busted a money laundering operation being run by illegal gaming and betting apps through Kirana stores, sources said.

According to a TOI report, the owners of these shops were unaware that they were involved in illegal gambling activities. They believed that they were operating under the RBI’s domestic money transfer (DMT) system.

In simple terms, the DMT framework enables money transfers to any bank account in the country. With this service, a customer can instantly send money to any IMPS (Instant Payment Service) or NEFT (National Electronic Funds Transfer) enabled bank account in the country and the recipient will receive it in their account within a few seconds.

The report said the aim of the programme was to provide easy and safe money transfer options for migrants who do not have access to formal banking services.

Moreover, the ED probe led them to the 40-year-old owner of a mobile phone accessories shop in Dahisar slum. A similar discovery was made at another retail shop in Naya Nagar, Mira Road.

This happens when ED intensified its vigilance regarding such gambling apps and the growing influence of foreign betting platforms in India, a few weeks ago.

As per earlier reports, over two dozen offshore gaming apps are currently in the ED’s sights for fund transfer and remittance as they have caused losses of Rs 1 lakh cr to gamers.

It should be noted that illegal gambling companies, operating mostly outside the country, set up convenience stores, small retail outlets and even fake e-commerce websites to pay out winnings in small denominations, making it difficult for government agencies to track the illicit funds, the report said.

Among the apps under investigation are Mahadev Online Book, FairPlay and MagicWins. Recently, the ED conducted raids in Gujarat and Maharashtra, targeting properties linked to MagicWins, and it was revealed that the app had similar payment networks in Haryana and Punjab, using DMT to pay out winnings, as per the report.

The report adds that legal ambiguities surrounding online gaming and betting applications are fostering the development of such operators, and the Department of Justice is investigating numerous money laundering cases related to hundreds of such platforms.

At the beginning of May, the Ministry of Consumer Affairs meditation taking action against indirect and surrogate advertisements promoting illegal betting and gambling, especially during the cricket and election seasons when such activities are particularly intense.

While the Ministry of Information and Broadcasting (MIB) also deliberate all sponsors and social media influencers to refrain from promoting and advertising, including surrogate advertising, foreign betting and online gambling platforms during the month of March.