Cricket Betting Profits Treated as Proceeds of Crime: Delhi High Court Ruling

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In a significant ruling, the Delhi High Court has declared that profits from cricket betting will be considered as 'proceeds of crime' under the Prevention of Money Laundering Act (PMLA) if they are earned using property acquired through illicit means. According to the court, even if betting itself is not a scheduled offense under the PMLA, the profits generated from it can still be linked to tainted property, making them subject to money laundering prosecution.The court emphasized that the scope of Section 2(1)(u) of the PMLA is broad, encompassing not only immediate profits from a crime but also any advantage derived from the use or exploitation of property obtained from a scheduled offense. This ruling came in response to petitions filed by individuals challenging provisional attachment orders issued by the Enforcement Directorate in a money laundering case linked to large-scale hawala transactions and international cricket betting operations.A key aspect of the ruling is that even if a property is used for a downstream activity that is not a scheduled offense, such as running an unlicensed business, the income earned from that activity can still be treated as 'proceeds of crime' if the property was acquired through a scheduled offense. This principle, referred to as the 'fruit of a poisoned tree,' holds that any benefit derived from tainted property retains its criminal taint throughout its use.The Delhi High Court's decision is expected to have significant implications for individuals and organizations involved in cricket betting and other illicit activities, as it underscores the importance of tracing the origin of assets to determine their legitimacy.