Rs. 200 cr. betting racket busted

By K.V. Subramanya

BANGALORE, DEC. 22. The investigation into the international on- line betting racket by the Enforcement Directorate (ED) and the Bangalore City Police has revealed that more than Rs. 200 crores had changed hands between the racket's kingpin based in Dubai and his local contacts in Bangalore during the last few months.

A Bangalore City police team, which unearthed the racket after raiding three places in the City last month, had informed the ED about the scam as the persons involved in the racket had allegedly violated the Foreign Exchange Management Act (FEMA), highly placed sources told The Hindu.

Those involved in the international on-line racket, place huge bets on the Nashdaq shares, Reuters commodity rates and international bullion and oil prices.

The betting is done through the internet, and payments are made at the end of the week on the basis of a point system that is followed by those involved in the betting, sources said. The betting is said to be something similar to the betting that was done on New York cotton prices a few decades ago.

Hawala is the main channel through which money is transacted between those running the racket from Dubai and their agents in Bangalore and other places. A leading jeweller from the City is said to be a key contact for those running the racket and those placing bets from Bangalore, sources said.

The ED officials, who arrived here from New Delhi about a fortnight ago, took up the investigation with the assistance of their local colleagues and the City police.

On the basis of the material gathered by them during the investigation, the ED officials raided another establishment near Richmond Circle in Bangalore on Thursday.

Further, on Thursday and Friday, the ED officials and computer experts inspected a company at Manipal Centre, which was allegedly providing software to those running the on-line betting racket.

The ED officials also conducted simultaneous raids on various establishments in Mumbai, Ahmedabad, New Delhi and in a few other cities in different parts of the country, where the racket is said to be flourishing. It is also said that the racket exists in Singapore, Pakistan, Afghanistan, Hong Kong and Sri Lanka.

The ED officials have seized computers, software, hard discs, floppies and some incriminating documents from the places they raided in Bangalore.

Sources said that according to information gathered, it is estimated that Rs. 200 crores had changed hands between the Dubai-based kingpin of the racket and his agents and players in Bangalore during last five months.

If the transactions from Mumbai, Ahmedabad and New Delhi, which are major commercials centres, are also taken into account, the amount would cross Rs. 1,000 crores, sources said.

Another shocking information that has come out of the investigation is that a part of the money involved in the betting racket was paid to the underworld elements based in Dubai and other places, sources noted.

As the case has international ramifications and mainly pertains to FEMA, the ED has taken over the case from the Bangalore City Police and would investigate it independently here after, sources said.

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