Indian officials find evidence of “hawala” transactions in gambling after raids
The Indian Enforcement Directorate (ED) has moved to clamp down on agents arranging high-stakes gambling excursions to Nepal.
A total of eight people were accused of being in violation of the Foreign Exchange Management Act in the Telangana state capital of Hyderabad, after the Enforcement Directorate undertook searches at eight agents’ locations, including the homes of Praveen Kumar Chikoti and Madhav Reddy.
During the raids, the ED seized several devices with multiple hawala transactions made from them, and while gambling is legal in Nepal, the financial transactions made by the players and agents involved are not.
Hawala transactions – defined as a money transfer method that takes place outside the traditional banking system – are illegal in India, and require a minimum of two dealers to handle the transaction.
The system doesn’t keep any official record of the transactions being made, therefore meaning it can’t be traced and is a haven for money laundering.
Casino dealers allegedly organised flights from Hyderabad to the northern province of Bagdogra, situated near the Nepalese border, taking gamblers to the Casino Vegas by Big Daddy in Jhapa – 15 miles away.
The journey reportedly cost each traveller ₹300,000 ($3,761), which included flights, hotel, food and entertainment.
The investigation by the ED into the casino dealers began after The Times of India (TOI) reported on the hawala transactions in March 2022.
Money laundering is a common occurrence in the gambling industry, as earlier today it was reported by Gambling Insider that lucrative jackpots paid to gamers in Kenya have been flagged as a possible means for laundering proceeds of theft, drug deals and terror-related activity.
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