Cricket Betting: Profits Constitute Proceeds of Crime Under PMLA

The Delhi High Court recently held that, although cricket betting is not a scheduled offence, the profits from it in the present case constituted “proceeds of crime” under the Prevention of Money Laundering Act, 2002, since their origin could be traced to scheduled offences.[1]

In this case, it was alleged that the petitioner acted as a key conduit in an international cricket betting racket by procuring and distributing Super Master Login IDs for the U.K.-based betting website Betfair.com within India.

It was found that the firm involved had generated aggregate proceeds of crime amounting to ₹2,400 crore from the said betting racket, which were subsequently settled with multiple bookies, including ₹60 crore to the petitioner. The Directorate of Enforcement provisionally attached his movable and immovable properties, valued at approximately ₹20 crore, as proceeds of crime arising from illegal acts connected to betting activities.

Rejecting the petitioner’s argument, the Court observed, “even if a downstream activity, such as conducting betting, is not a scheduled offence, profits generated from such activity remain traceable to the original tainted property, especially when the said downstream activity is a final manifestation of a chain of criminality, intricately interwoven with multiple preceding criminal acts, any profit derived therefrom clearly constituting “proceeds of crime” within the contours of the PMLA”.

The Court highlighted that the petitioner’s actions of procuring and distributing the IDs without any KYC verification or lawful documentation amounted to forgery, cheating, identity fraud and criminal conspiracy, all of which constituted a scheduled offence. Furthermore, it was a deliberate act on the part of the petitioner undertaken in furtherance of a larger criminal conspiracy aimed at facilitating the running of an illegal betting racket.

In view of the above, the Court held that any benefits indirectly derived from the use of the IDs amount to proceeds of crime, being the fruits of a poisoned tree.

[1] Mukesh Kumar and Anr. v. Union of India and Ors. [WP(C) 12261/2015] and connected matters.