A surge in offshore betting and money-gaming apps using India’s digital payment systems could expose users to financial risks, according to concerns raised by Nithin Kamath, chief executive officer (CEO), Zerodha. The platforms, many of which operate outside India’s regulatory framework, are reportedly using the convenience of UPI payments. This is to attract users with small entry amounts and aggressive online promotion.
Kamath recently warned that such apps have mushroomed after the ban on several real-money gaming platforms in India. He suggested that restricting their access to UPI and blocking associated bank accounts could help curb the problem.
How the trap works
His X post highlights that the industry data and advertising watchdog Advertising Standards Council of India (ASCI) insights suggest that these platforms rely heavily on social media marketing to reach users. Promotions frequently appear on platforms such as Instagram, YouTube, X and Telegram, often through influencers and paid ads.
The onboarding process is designed to be quick and simple:
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Users sign up with a mobile number and complete a basic OTP verification. -
A small wallet top-up allows them to start betting almost immediately. -
Deposits are enabled through popular UPI apps such as PhonePe, Google Pay and Paytm. -
Entry amounts can be as low as Rs 300, making participation appear low-risk to new users. -
Once funds are deposited, the money is often pooled and routed to offshore betting operators. Users can place bets on cricket matches, casino-style games, and other online gambling activities.
Withdrawal complaints and regulatory gap
The bigger risk emerges when users attempt to withdraw their winnings. According to industry executives and research cited by ASCI, several users have reported difficulties receiving payouts from such platforms.
Since many of these operators are located outside India, legal recourse for users becomes complicated. Disputes over withheld winnings or blocked accounts may be difficult to resolve through Indian regulators or courts.
Why UPI access is a concern
Kamath argued that the easiest way to slow the growth of these platforms would be to make money transfers harder. Preventing offshore betting apps from integrating with UPI and encouraging banks to block suspicious merchant accounts could reduce their reach.
For users, the episode highlights a broader personal finance risk: The same digital payment convenience that powers everyday transactions can also enable quick entry into unregulated financial activities.
With small deposits and easy sign-ups, these platforms may appear harmless at first. However, once money moves outside India’s regulated financial system, recovering funds can become extremely difficult if things go wrong.
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