24 arrested over betting fraud in Ethiopia
Suspects allegedly used several techniques to hide income, including underreporting betting volumes, and handling funds through cryptocurrency to mask origins.
Ethiopia.- Ethiopia’s National Intelligence and Security Service (NISS), in collaboration with the federal police and the Financial Security Service, has apprehended 24 individuals over allegations of betting fraud.
The crackdown targeted individuals linked to various betting entities, including licensed operators and unlicensed platforms, as well as those using foreign-hosted systems, who allegedly hid over 100bn birr (€560,282) in betting funds to evade taxes and launder money.
Security teams conducted raids in Addis Ababa, Dire Dawa and other areas after gathering intelligence over several months. Investigators found that some companies lacked permanent offices, while others shut down or vacated premises to avoid inspections.
The suspects allegedly used several techniques to hide income, including underreporting betting volumes, handling funds through cryptocurrency to mask origins, transferring money via international hawala systems outside formal banks and working with payment firms to understate transaction amounts.
According to the NISS, these betting companies collaborated with local fintech and aggregator platforms to conceal more than 100bn birr that should have been collected as government revenue.
The probe stems from efforts to address tax shortfalls in Ethiopia’s betting industry, where online operations often involve overseas servers, making tracking difficult. Officials note that revoked licences did not deter some firms from operating, and their partnerships with local fintechs enabled the misuse of sensitive payment information protected by confidentiality agreements.
The government seeks to recover these funds to support public needs, as the lost revenue could have been allocated towards services like education and healthcare. Labelling the case as a dual threat to both the economy and national security, NISS stated: “A portion of the smuggled funds was used to finance terrorism, launder illicit money and support anti-government activities, framing the scheme as both an economic and security threat.”
The findings of the investigation have brought attention to risks associated with fintech collaborations and foreign involvement in the betting sector, fuelling calls for closer regulatory scrutiny. Analysts predict that the recent developments could lead to tighter regulations for the betting industry.
A recent directive requires operators to provide 1.5m birr (€8,404) in bank guarantees and limits payouts to 1m birr (€5,602) per bet to protect users, especially young people drawn to gambling.
