Parimatch probe takes ED to Zepto's doorstep

Mumbai: As part of its ongoing probe into offshore betting applications, the Enforcement Directorate (ED) had asked quick commerce platform Zepto to join its investigation into alleged money laundering linked to Parimatch, a Cyprus-based betting platform banned in India that continues to operate through multiple mirror websites, according to people aware of the matter.

They said the agency, which is probing Parimatch, found that Zepto not only ran promotional campaigns on the illegal betting app but also circulated flyers with customer orders, effectively delivering gambling-related advertisements directly to households.

The ED sought an explanation from Zepto on whether it was aware of the credentials of the advertiser before taking up the promotions, said one of the persons, who did not wish to be identified, adding, "In 2022, the Ministry of Information & Broadcasting had issued an advisory against promotion of online betting/gambling through advertisements in public interest."

Queries emailed to Zepto remained unanswered till press time.

People close to the Bengaluru-based company told ET that Zepto was not the only quick commerce application that the ED had reached out to. "Information pertaining to Parimatch was sought over email. The agency was informed that a third-party managed the said ads. Their details were shared with the agency, following which no communique was received from them," one of the persons told ET on condition of anonymity. "To be clear, nobody was summoned."

In May, the ED conducted searches at 17 locations linked to the offshore betting platform, seizing around ₹1.2 crore in cash and freezing bank balances worth ₹3.8 crore. The action was part of a money laundering probe into an alleged betting operation that investigators claim generated more than ₹3,000 crore annually.

In a press release on May 27, the ED said, "Investigation has further revealed that the platform promoted betting-related advertisements through leading quick-commerce applications and circulated promotional material along with grocery deliveries to attract and onboard new users. Such advertisements were strategically displayed to users during app usage and order placements."

Investigators say offshore gaming and betting platforms are increasingly adopting new methods to sustain operations in India amid heightened scrutiny by multiple enforcement agencies. Authorities have flagged a rise in surrogate advertising, covert promotion through messaging applications and the use of social media influencers to market such platforms.

Officials said several betting operators have created social media pages that appear to provide sports-related content while subtly directing users to gaming applications. "In Parimatch's case, an Instagram page ostensibly providing cricket and football updates contained links that redirected users to the betting platform," another person said.

The ED has also alleged that Parimatch operated surrogate advertising entities under the names 'Parimatch Sports' and 'Parimatch News'. Earlier searches led to the freezing of assets worth more than ₹110 crore and the seizure of around 1,200 mule credit cards, officials said.

India's offshore betting market is estimated to exceed ₹85,000 crore, with individual platforms allegedly generating annual revenues of ₹3,000 crore to ₹5,000 crore. Investigators claim operators frequently engage influencers, actors and sportspersons through informal arrangements, with payments often routed from jurisdictions such as Cyprus and Dubai.

According to the ED, Parimatch and its associates allegedly employed a complex network of mule accounts, payment intermediaries and financial inclusion channels to collect, layer and transfer user funds.