SC Halts ED Power to Seize Cricket Betting Proceeds, Questions PMLA Scope

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AuthorKavya Nair|Published at:
SC Halts ED Power to Seize Cricket Betting Proceeds, Questions PMLA Scope
Overview

The Supreme Court has temporarily halted the Enforcement Directorate's ability to attach properties derived from illegal cricket betting. This intervention follows a Delhi High Court ruling that allowed such seizures by classifying betting proceeds as 'proceeds of crime' under the Prevention of Money Laundering Act (PMLA). The apex court's decision casts doubt on the ED's powers when dealing with activities not explicitly listed in the PMLA's scheduled offenses, pending a full review.

PMLA Jurisdiction Under Scrutiny

The nation's highest court delivered a significant blow to the Enforcement Directorate's aggressive asset seizure tactics on Monday. A bench comprising Justices MM Sundresh and N Kotiswar Singh issued a stay on a Delhi High Court order from November 2025. The High Court had previously asserted that the ED could attach assets generated from illegal online cricket betting, deeming them 'proceeds of crime' under the Prevention of Money Laundering Act (PMLA). This move by the Supreme Court opens a critical debate on the expansive interpretation of the PMLA.

The High Court's Reasoning

Previously, the Delhi High Court had ruled that money earned through criminal acts of forgery, cheating, and conspiracy associated with betting, specifically mentioning activities routed through the UK-based website Betfair.com from a Vadodara farmhouse, constituted 'proceeds of crime' as defined by Section 2(1)(u) of the PMLA. The ED had argued that accused individuals acted as conduits, procuring 'Super Master IDs' that bypassed Know Your Customer (KYC) norms, facilitating widespread illegal betting accounts. The High Court had upheld the ED's provisional attachment of these properties.

Petitioners' Argument: Offenses Not Scheduled

Challenging the High Court's verdict, the petitioners contend that the PMLA grants the Enforcement Directorate jurisdiction only over offenses explicitly listed in its statutory schedule. They argue that since online betting and gambling are not on this schedule, the ED cannot initiate money-laundering cases based on them. The plea further states that the ED attempted to circumvent this by linking betting proceeds to separate forgery cases involving SIM cards, rather than directly from the betting activity itself. Petitioners argue this approach unjustly relies on remote activities and dilutes the statutory requirement of money flowing from a 'scheduled offense', effectively allowing the ED to extend the law to loosely connected activities. The Supreme Court has now issued notices to the ED, seeking its response to these contentions.

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