In an article titled “A peek into the World Cup betting racket” published in June 2018, ApEx had discussed a ‘rare group of gamblers’ who were betting via international bookmaking sites using the crypto-currencies banned in Nepal.

Tiwari, an IT student and a self-styled “crypto trader” who wishes to be identified only by his surname, had spilled the beans on how Nepal’s crypto-trading youths had found a way to illegally load their international betting accounts using crypto-currencies. Tiwari used to transfer crypto-currency from crypto-wallet Bittrex to the betting site 1xBet, converting them into dollars.

Three years later, the ‘rare group of gamblers’ is rare no more, Tiwari tells us, although tracking and talking to them was extremely difficult for ApEx this time. Still, following some groups on Facebook, Twitter and Telegram, we found out that the number of crypto-traders in the country has increased, and so have gamblers using international websites.

Between our conversation with Tiwari in mid-2018 to now, he claims to have lost close to Rs 40 million on sports betting alone. “I lost everything I earned from crypto-currency trading,” Tiwari says. “I had earned a lot in the bullish market when the Bitcoins I bought for $2200 reached $64,000.” Tiwari had become a full-time crypto-trader, staying online most of the time. Gambling was entertainment at the start. Then it got addictive to the point that he was doing it all the time, eventually losing almost all his crypto holdings. 

Hassle-free betting

Most betting websites need users to verify their accounts by uploading their passports and even bank statements. Unverified betting accounts are at the risk of being shut down anytime and holders can’t make withdrawals in case they win. “But 1xBet is the best for Nepalis,” Tiwari says. “You can register without any complications, and loading the account with crypto-currency takes just five minutes.”

Tiwari knows of many other users making deposits on the 1xBet site through crypto-currencies. But even more are using the local wallet Khalti, he says. During the last Euro Cup (June 11-July 11), Khalti got some attention on social media when a few people posted about how it was being used to deposit money into 1xBet accounts locally. (The Cyprus-based company’s website still has a notice, in both Nepali and English, mentioning the Khalti app.)

Amit Agrawal, the co-founder and director of Khalti, refutes all links between Khalti and 1xBet. “We were shocked when we found out,” says Agrawal. “This has nothing to do with Khalti. It’s just that some unscrupulous users have been making transactions through our app.” Agrawal informs that Khalti has already sent legal notices to 1xBet and is also working with Nepal Rastra Bank to identify and penalize offenders. The repeated use of Khalti accounts on the betting site has harmed the brand’s image and continuous monitoring of transactions after the discovery is costing the startup precious time and resources. Khalti has already suspended around 1,500 accounts.

As most transactions on digital wallets like Khalti are done by individuals, it is difficult to trace which users are using their accounts for betting. Also, crypto-currency transactions are mostly untraceable as the whole structure of the Blockchain lets its users remain anonymous. Moreover, most users also mask their IP addresses.

Ishwar, an employee at a private company, says sports-betting is a good side hustle. “If you are a disciplined gambler, you can earn a significant amount of money,” he says. But Ishwar himself has lost more than Rs 100,000 in under a year. Still, he finds the prospects of making money through gambling enticing and feels it should be legalized and regulated.

A Khalti user in the past, he is now using local agents to load his betting account. “There is so much money going out and coming in through betting sites,” Ishwar says. “Only if the government regulated it, it could earn a lot of revenue through taxes.” Besides taxes, localized betting houses could also create jobs. 

Why not legalize?

Another “gamester” Durgesh, who also spoke on the condition of anonymity, had met Ishwar via a social media group where like-minded youths like him speculate on upcoming sporting events. The group’s discussion ranges from international events like the Euro Cup to club football to test cricket to tennis and even horse races. The summer Olympics in Tokyo allowed them to bet on otherwise rarely considered events like table tennis and swimming.

“Sports betting is getting popular as the Nepali youths’ interest in international sports is increasing. So it would be best for the government to legalize local bookmaking companies,” Durgesh says. “That way, the government can earn revenue while all the money remains in Nepal.”

Senior economist and Nepal Planning Commission Vice-Chairman Biswo Poudel agrees that if sports betting is ever legalized, the whole system should be within Nepal. “By default, sports betting is designed in a way that the house always wins,” says Poudel. “So the ultimate beneficiary from the gambling channel should be based in Nepal.”

But Poudel also warns of the risks of legalization. Gambling is culturally considered a “sin” in Nepal, Poudel explains, and there is only a small segment of the population that understands the risks involved. And in any economy, if the number of risk-takers increases, the poverty rate will rise relatively. Also, adds Poudel, maintaining best practices in gambling channels in terms of information flow and reliability is difficult. He thus feels that the ban on gambling is justified and should be sustained.

Tiwari and Agrawal—both of whom consider themselves victims of gambling—agree that the ban should remain. “If the government wants to legalize gambling, let it open local casinos for Nepalis first,” Agrawal says. “But these betting sites should be banned the same way porn sites are.”

“The gambling market opens 24/7 and it can be very addictive,” Tiwari adds. Tiwari had started betting smaller amounts on things such as the number of corners in a football match and the number of runs by a cricket team . “I also found out that there’s a lot of match-fixing, especially in basketball and volleyball,” Tiwari adds. “Thus, no one should be allowed to gamble. Easy money makes people greedy.” 

Fightback begins

Phanindra Mani Pokharel, joint secretary and spokesperson at the Ministry of Home Affairs, says betting cannot be legalized under any condition. Pokharel informs that the police are maintaining strict vigil and apprehending anyone involved in illegal sports betting.

“We have also found that most of those into sports betting are technologically savvy,” Pokharel adds. “There’s not much we can do unless we get specific complaints or information.” Yet, as Pokharel suggests, most digital transactions that leave no evidence have left the regulators helpless.

Still, police have been cracking down on gambling based on whatever information they are getting. The latest crackdown came on July 7 when the Metropolitan Crime Division arrested eight individuals, including three Indian nationals, for organizing illegal betting rackets in Nepal. Over Rs. 3.4 million was seized from them. 

On May 25, police had arrested 11 individuals—six of them Indian nationals—in Kathmandu for betting during the Indian Premier League 2020.

A major arrest dates back to May 2018 when the Metropolitan Police Range Office, Kathmandu nabbed six people including former national footballer Anjan KC for running an IPL betting racket. According to the police, by the time they were arrested, the betting group had carried out transactions worth Rs 700 million during that IPL season.

ApEx had also reported in April 2021 about the gambling nexus in eastern Nepal, based in Biratnagar. Athar Ansari, considered one of the biggest bookmakers in the region, had begun operations as soon as the IPL started on April 9. Ansari, using his gang of a dozen or so bookies, has allegedly made millions of rupees over the past decade, with his financial connections being traced to India and even Dubai. Ansari and his associates are on the run after they were found to be involved in a kidnapping.