Zepto Faces Backlash for Promoting Illegal Betting Platform

New Delhi, May 2024— Quick commerce giant Zepto has come under scrutiny for displaying advertisements of Parimatch, a Cyprus-based illegal offshore betting platform, during the ongoing Indian Premier League (IPL) season. The ad, listed with a ₹0 price tag, remained visible indefinitely on user carts, amplifying brand recall for the banned entity. This follows a similar incident involving Uber cabs promoting 1xBet in Delhi and Mumbai earlier this year.

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Illegal Betting & Regulatory Gaps
Both Parimatch and 1xBet were banned in India in 2023 under Section 69A of the IT Act, 2000. Despite this, these platforms use mirror sites to bypass restrictions, especially during high-traffic events like the IPL. The Ministry of Electronics and IT (MeitY) has blocked 581 apps, including 174 betting platforms, but enforcement remains challenging due to their foreign jurisdiction and rapid domain-switching tactics.

FDI Compliance Under Scrutiny
Zepto, which holds a 21% market share in India’s quick commerce sector, faces allegations of violating Foreign Direct Investment (FDI) norms. The Confederation of All India Traders (CAIT) claims the company directly sells products to consumers instead of acting as a marketplace, violating FEMA regulations. Further, Zepto Café, its in-house brand, does not disclose manufacturer details—a breach of FDI rules requiring seller information disclosure.

Ad Accountability & Consumer Impact
The Parimatch ad’s prolonged visibility on Zepto highlights gaps in digital ad monitoring. With no incentive for users to remove the ₹0-tagged ad, illegal platforms gain undue exposure, raising concerns about compliance and revenue leakage. Analysts stress the need for stricter ad policies, especially in sectors like betting, which face outright bans.

Enforcement Challenges
Indian authorities struggle to regulate foreign-registered platforms. While the DGGI has cracked down on tax evasion, mirror sites and alternative payment methods (like UPI) enable seamless access. Uniform betting laws and centralized oversight remain critical, as highlighted by IT Minister Ashwini Vaishnaw, who reaffirmed central jurisdiction over online gaming intermediaries.

Why It Matters
With IPL 2024 attracting millions, illegal betting platforms exploit lax ad checks to target Indian users. The Zepto-Parimatch controversy underscores the urgent need for robust ad governance and FDI compliance audits. As consumer trust in digital platforms grows, accountability in ad placements becomes non-negotiable to curb illegal activities and protect stakeholders.

 

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