Fairplay betting app operators returned 70% of funds to keep players engaged: ED

Mumbai: An investigation by the Mumbai zonal unit of the Enforcement Directorate (ED) into allegedly illegal activities of some mobile applications, including Fairplay, has revealed that the operators returned approximately 70% of the collected funds to keep players hooked to their games.
ED sources said the business model thus earned roughly 30% gross profits. In a typical betting operation, the organiser’s investments mostly pertained only to developing the betting software/application and thereafter maintaining a financial-administrative system to run the activity.
The agency recently conducted searches across various locations in Ahmedabad as part of its case probe, which revealed that the accused entities had allegedly conducted transactions worth ₹800 crore in a particular span of 15 days. On Tuesday, the ED conducted further searches at nine fintech firms in Delhi and Gurugram as part of its money-laundering investigation into mobile applications, including the Fairplay app.
The fintech firms, acting as financial service providers for certain mobile applications, came under the ED’s scanner due to their alleged involvement in monetary transactions related to the disbursement of betting proceeds to players. The Fairplay app is allegedly linked as a subsidiary app to the Mahadev Online Book (MOB) platform, whose illegal online betting activities have been probed in a separate investigation by the ED since 2022.
ED’s probe against Fairplay Sports LLC and others is based on an FIR registered by the Mumbai police’s Nodal Cyber Police on the complaint of Viacom18 Media Pvt Limited under sections of the Indian Penal Code and the Information Technology Act for allegedly causing loss of revenue of over ₹100 crore, which is the proceeds of crime in ED’s case.
The investigation has revealed that certain organisers of betting activities over the past six to 12 months have been allegedly employing an “improvised” modus operandi in conducting involved monetary transactions. A betting player’s money gets routed via mule bank accounts, which are acquired irregularly or on a rental basis, but the proceeds or returns from such activities reach him via payment gateway-like cyber systems devised by financial services providers, to evade detection by financial regulators.
In June this year, ED carried out searches across Mumbai and Pune and seized movable assets worth around ₹8 crore in the case. The probe revealed that Fairplay had allegedly made pacts through foreign-based entities with Indian agencies representing celebrities. No due diligence had been performed by Indian agencies concerning Fairplay before executing the agreements for its promotion.
Further, it was revealed that Fairplay had allegedly collected funds through various bogus/shell bank accounts, which were then layered through a complex web of bank accounts of shell entities and accumulated in pharmaceutical firms involved in bogus billing. Funds from such firms were then allegedly diverted to overseas shell entities. More than 400 bank accounts of shell entities were found to have been used allegedly for these purposes, which are under examination, along with the trail and utilisation of funds gathered from the public by Fairplay.