Online gaming apps can certainly be enjoyable, providing both entertainment and the thrill of potential cash winnings. However, they can quickly become a ticking time bomb of hidden scams and deceit. The temptation and prospect of quick money may reel you in, but only a lucky few walk away victorious.

Take, for example, Vaibhav from Junnar, Pune. Addicted to online gaming, he ended up losing a whopping INR 1.5 Lacs ($2,050) on such apps. He initially won some money, but that quickly disappeared into the game's wallet without returning to his bank account. "In gaming apps, one is made to believe that they will win money. But the money never comes back to their account. They are designed in such a way to make you win initially so that you get addicted," warned Vaibhav. 

“In gaming apps, one is made to believe that they will win money. But the money never comes back to the account...These apps are designed in such a way to make you win initially so that you get addicted.” - Vaibhav

Lured by the initial wins, numerous people across India have fallen prey to these seemingly harmless gaming apps. Financial loss is only one part of the story, which can take a darker turn as seen in a case from Nagpur where a class 9 female student was blackmailed for explicit pictures after losing a bet. During the Covid-19 pandemic, schools switched to online mode due to lockdown restrictions. The girl, hooked on online gaming, faced a risky situation when she lost a bet.

The victor demanded a payment of Rs 2,000 or her explicit photos in lieu. When the minor complied, he used the images to blackmail her, even going to the extent of sharing them with her relatives. This led the devastated family to register an FIR, and the culprit was subsequently arrested. 

The world of these online scams isn't limited to singular instances. In fact, a startling number of victims, principally hailing from tier-2 and tier-3 towns and cities, find themselves deceived by these betting apps. Cunningly, these platforms present themselves as skill-based gaming apps, smartly circumventing legal issues.

How Do These Gaming Apps Work? 

The deceptive cycle experienced by individuals who become addicted to certain gaming apps tends to follow the stages below: 

  1. Initial Wins: Games are designed to provide players with an initial win, creating an illusion of easy money.
  2. Addiction: Once the players get a taste of winning, it becomes easy for them to become hooked on the game in hopes of winning more.
  3. Heavy Losses: As players continue to engage with the game, they start incurring heavy losses with little to no return on their investment.
  4. The lure of New Games: In an effort to keep players engaged and spending more money, gaming apps frequently introduce new games.

A key point mentioned by cyber expert and CEO of DCCF Labs, Deepika Singh, is that these scams are legal under Indian law, as they are designed as skill-based games and thus don't fall under the gambling definition set by the Supreme Court in 1996. 

“The definition under gambling is outdated and has not been modified ever since the British era. In those days there were no apps...The app makers in today’s era are using those loopholes to market their product.” - Deepika Singh

The Mathematics Behind the 'Win'

The complex machinations behind these games often seem simple on the surface. Consider, for instance, a gaming app where six players are playing for cash on a Rs 860 table. For this illustration, each point carries a pre-decided value of Rs 4. Here's how the winnings are calculated: 

  • Initial Game Cost: ₹860
  • Value of Point: ₹4
  • Losing Points: The points lost in the game were 45, 78, 23, 20, and 40.
  • Winner's Winnings (Before Fees): This would amount to ₹824, considering that each point holds a value of ₹4.

So, the total winnings (before fees) would be calculated as 4 times the sum of all the losing points (45+78+23+20+40).

The Ongoing Investigation of Mahadev Betting App 

There's an ongoing investigation in India centering on a popular gaming app known as Mahadev. Managed by various companies ranging from investment firms to event management and travel companies, the app finds itself in a scandal worth Rs 5,000 crore. As the Economic Detective (ED) investigation has revealed, it seems that these companies have been functioning as mere front-ends, involved in money laundering schemes through hawala operations. 

The Operations and the Players 

According to the investigation, Vikash Chhaparia, based in Kolkata, was the key figure managing hawala operations for the Mahadev app. The involved enterprises include M/s Perfect Plan Investments LLP, M/s Exim General Trading FZCO, and M/s Techpro IT Solutions LLC, along with Rapid Travels, in charge of ticketing operations. 

Interestingly, the investigation has brought to light a high-profile wedding that employed private jets and hired vendors from Mumbai. This extravagant event, organized for the app promoter, Saurabh Chandrakar, allegedly used hawala channels for cash payments. The transactions were reportedly made in the name of M/s R-1 Events Pvt Ltd of Yogesh Popat. 

The Mahadev app also has sister concern websites such as fairplay.com, reddy anna app, raipur book, lotus 365, james 777, luckybook91, ratanbook, cricket99, betbhai9, and betbook239." - Economic Detective Investigation

These platforms provided a variety of games such as poker, and betting in cricket, badminton, tennis, and football on sites like laser247.com, laserbook247.com, betbhai.com, and many more. 

The Scale of the Issue 

 The investigation has identified close to 75 First Information Reports (FIRs) registered against the app in 3-4 districts of Chhattgarish. In addition to this, 50 corporate accounts and 10,000 savings accounts involved in transactions are also under scrutiny. The maturity of money laundering seems to have been executed through these accounts. 

  • 75 FIRs lodged
  • 50 corporate accounts
  • 10,000 savings accounts

 Furthermore, there have already been 429 arrests, and 1,035 accounts have been frozen thus far, with more than 3,000 bank account details currently being investigated. 

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