The arrest and investigation of Pavel Valeryevich Durov, CEO of encrypted social media and messaging platform Telegram, has spiralled concerns related to the promotion of unlicensed crypto gambling websites.
Durov was arrested on the tarmac of a Paris airport this saturday by French authorities, largely due to concerns about moderation of illicit commerce and harmful content displayed on Telegram’s platform, which engages with a reported +1 billion users worldwide.
The Russian-born businessman, a citizen of Russia, the UAE, Saint Kitts and Nevis, and France, has caused an international stir. His capture was branded a ‘politically motivated arrest’ by the Kremlin – despite some past criticisms Durov has made of the Putin government – and led to calls of ‘Free Pavel’ by X CEO Elon Musk, who stated that Durov had become a prisoner of the EU’s ongoing war on free speech.
Authorities have a myriad of concerns about Telegram and its use. This includes claims of criminal activity on the app, including drug trafficking, prostitution, child pornography, and extremist activity like Islamism and far-right ideologies.
The accusations against Telegram could go beyond authorities’ immediate concerns about organised crime and extremism, however. Telegram is also utilised by a number of gambling operations, both regulated and unregulated, in particular cryptocurrency platforms.
On Telegram, unlicensed gambling websites can be promoted to unrestricted global audiences via the use of ‘channels’. Concerns have been raised that gambling channels have promoted the use of unrestricted gambling websites such as casinos with no self-exclusion or bypassing customer verification requirements.
TG.Casino is a notable example of this. The crypto casino operates entirely on Telegram, but despite the app’s encrypted nature the brand has become a lot more visible in recent months, signing a commercial partnership with Italian football giants AC Milan earlier this year.
Another notable crypto-casino and sportsbook active on Telegram is Lucky Block. Describing itself as a ‘licenced bitcoin casino’, Lucky Block runs a website – similar in design to other sports betting operators, both crypto and fiat.
The company recently entered the Telegram game as well, however. The firm’s Telegram channel allows customers to bet using Bitcoin, Ethereum, Tether, Litecoin and Dogecoin, and offers a 200% welcome bonus up to €25,000.
These are just two of countless online casinos and sportsbooks active on Telegram, however, with the platform hosting many more. Both TG.Casino and Lucky Block operate internationally under a Curaçao Gaming Control Board licence.
This itself is not entirely uncontroversial, as Curaçao – a Dutch territory in the Caribbean – often faces accusations of lax gaming licence conditions and facilitation of money laundering on its shores.
Regardless, TG.Casino and Lucky Block still represent two of the licenced operators on Telegram, albeit an often questioned licence. There are numerous accusations of many unlicensed and unregulated casinos active on the app, many of which deal in cryptocurrency.
The revenue generated by these illegal gambling sites will subsequently need to be laundered, further fueling the concerns of law enforcement, financial authorities and governments. The same extension can be applied to the various allegations of drug and sex trafficking on the platform.
While online gaming may not be at the forefront of French authorities’ minds regarding Telegram, the impacts of a potential extensive investigation, charges and even possible shutdowns will undoubtedly impact the sector due to its extensive presence on the site.
Prior to the arrest, Telegram faced speculation of a ban in Turkey, in which central communications agency ICTA accused Telegram of knowingly promoting illicit activities of money laundering, prostitution and illegal gambling to Turkish audiences.
In the days since Durov’s arrest, IIndia has launched an investigation into the platform led by the Cybercrime unit (I4C) and the the Ministry of Home Affairs (MHA) and the Ministry of Electronics and Information Technology (MeitY ) As with other investigations, Indian authorities have cited drug trafficking and prostitution, but also illegal gambling.
Due to Durov’s arrest, the French investigation into Telegram is by far the most prominent, but it will also likely be long-running and hard fought. Telegram has strongly denied any accusations of wrongdoing by its CEO, who with an estimated net worth of $15.5bn will be able to afford a fierce legal defence team.
Since founding Telegram in 2013, Durov maintains that the app is ‘politically neutral’, in which end-to-end encryption of messaging is vital to its users maintaining anonymity from governments to communicate and express themselves freely.
In response to its CEO’s arrest, Telegram’s statement read: “Telegram abides by EU laws, including the Digital Services Act – its moderation is within industry standards and constantly improving… Telegram’s CEO Pavel Durov has nothing to hide and travels frequently in Europe.
“It is absurd to claim that a platform or its owner are responsible for abuse of that platform. We’re awaiting a prompt resolution of this situation.”
