Regulatory delays prolong legal ambiguity as betting firms continue to openly advertise

The Indian Premier League (IPL) saw relentless efforts by offshore betting companies to lure users into their fold under the guise of sports content. Despite repeated advisories and warnings issued by the Ministry of Information and Broadcasting (MIB), experts feel that due to regulatory delays these operators are unlikely to be deterred from advertising across various media outlets during the upcoming Cricket World Cup.

The MIB’s latest advisory also acknowledges the fact that there is a spike in promotion of betting and gambling platforms during major sporting events, often through indirect advertisements.

Platforms such as Parimatch, 1xBet, WinBuzz, Fairpla and Lotus 365 have shown no signs that they are stepping back on marketing activities. Indeed, Lotus365.com, an online betting exchange, was among the top 10 advertisers during the January-June period this year, per TAM's half-yearly report on print media ad volumes.

Delay in establishing SROs leading to legal loopholes

The delay in establishing self-regulatory organisations (SROs), which has led to a regulatory void in the space, is the primary reason promotions continue unabated.

“The delay in establishment of such a framework and the regulations thereafter, will lead the online gaming platforms to continue operating in grey areas, making it difficult to ensure fairplay among online gaming industry consumers,” explained Shashank Agarwal, Advocate, Delhi High Court. “While betting continues to be an illegal activity, consumers of the online gaming industry continue to face the risks associated with unregulated operators.”

Media platforms, celebrities, and sponsors involved in promoting or advertising illegal betting sites also face the risks associated with promoting these unlawful activities.

Meanwhile, popular faces such as Suniel Shetty, Tamannaah Bhatia and others are openly endorsing these betting platforms.

Just last month, popular Bollywood starlet Nora Fatehi was seen using her Instagram account to promote her new music video alongside endorsing a betting platform. Fatehi shared an Instagram story featuring a link labelled ‘Sports Related News’. However, upon clicking on the link, users were directed to a platform called Sportsexch, which describes itself as a ‘sports betting exchange community’. Fatehi has also posted content endorsing this brand, offering a shoutout in appreciation of Sportsexch’s support for her new music video.

As things stand, the betting platforms are thriving. Amidst the confusion caused by GST, these platforms not only advertise openly but also aim to rapidly expand their user base. Leveraging their active presence and partnerships with actors and influencers on social media, they have been collaborating with micro-influencers (those with 10,000–100,000 followers) and nano-influencers (those with 100 to 10,000 followers) to distribute codes promising enticing benefits such as ‘No TDS’, ‘No GST’, and even a ‘Lossback Bonus’.

According to Agarwal, the illegal betting and gambling websites continue to exploit the ambiguities in current laws, which are location based, by establishing themselves as offshore entities.

Need to plug regulatory ambiguity

“The unclear regulatory framework increases the liability for media platforms, celebrities, and sponsors endorsing illegal betting sites. The emergence of potential regulators, such as the All-India Gaming Regulator (AIGR) Foundation, and their association with prominent figures, further emphasises the urgent need for clarity in regulations,” said Aviral Kapoor, partner at Alagh & Kapoor Law Offices.

“Media platforms persisting in showcasing illegal betting site ads will face potential legal consequences. MIB’s advisory serves as a warning, and non-compliance could lead to action under various Indian statutes,” Kapoor explained. “Meanwhile, MeitY’s initiative to establish SROs, as highlighted by the Union Minister Rajeev Chandrasekhar, aims to regulate real-money gaming apps. However, the industry's division and concerns about undue influence over these regulatory bodies have caused delays.”