Betting in India:
- From animal fights to playing cards, and from horse-races to cricket matches—gambling/betting on sports is quite common in India.
- Most state laws in India that make gambling/betting illegal draw from the British era Public Gambling Act.
- Though India is inspired by British era law on gambling, the UK itself has legalised gambling.
Benefits organized crime:
- India, keeping gambling illegal, has let organised crime benefit from it.
- The Justice Lodha committee on the reform of cricket administration in India had pointed out how the hawala system used illegal cricket betting and led inevitably to money laundering.
- The high stakes and underground operations also facilitated the entry of organised crime and the rise of match-fixing.
Loss of revenue to government:
- Ficci, in 2016, estimated the illegal market’s worth to be nearly Rs. 10 lakh crore.
- This demonstrates the significant chunk of revenue that the government is losing out on by forcing gambling/betting activities underground—in terms of licensing fees, GST on betting services and taxes on winnings.
Law Commission report on gambling:
- The Law Commission of India recently submitted to the government its 276th report titles, “Legal Framework: Gambling and Sports Betting including in Cricket in India”.
- It recommended that, since it is impossible to stop gambling (more so with online gambling) and betting entirely, it is better to legalise them and form laws to regulate such activities to reduce criminality.
- The commission recommended a classification of ‘proper gambling’ and ‘small gambling.’
- Proper gambling would be for the rich who play for high stakes, while small gambling would be for the low-income groups.
- Caps and link to Aadhaar:
- The panel wanted the government to introduce a cap on the number of gambling transactions for each individual, that is, monthly, half-yearly and annual.
- Also, restrictions on amount should be prescribed while using electronic money facilities like credit cards, debit cards, and net-banking.
- Transactions between gamblers and operators should be linked to their Aadhaar and PAN cards so that the government could keep an eye on them.
Government should accept it:
- The Union government should seriously consider accepting the Law Commission’s suggestion to legalise sports betting and gambling in India.
- Reducing Criminality: Reducing criminality through regulation is an obvious gain.
- Revenues: This will also mean revenue gains for the government.
- Clearing up many distortions:
- Skill vs gambling:
- In 1996, in KR Lakshmanan vs the State of Tamil Nadu, the Supreme Court had ruled that:
- Competitions where success depends on a substantial degree of skill would not fall into the category of “gambling”
- Even where there is an element of chance, if a game is largely a game of skill, it would nevertheless be called a game of skill
- While betting in horse-races got legalised, the same in many other sports remains illegal.
- Skill vs gambling:
- Sanitizing the industry:
- The Law Commission has suggested that all transactions should be linked to the Aadhaar and PAN of operators and participants.
- By keeping track of the activities, the betting industry could get reasonably sanitised.
How to bring in a law:
- Gambling is a state subject.
- So the commission recommended that the Centre could enact a model law for the states to adopt.
- Another option is for the centre to even use the powers under Articles 249 and 252 that allow it to make laws to regulate matters under the state list of subjects in the larger national interest.
- India can choose among two options:
- To look at gambling and betting as a revenue-source and to encourage job-creators, like some countries do
- Or it can treat gambling in a morally-neutral manner and focus on reducing social costs such as addiction and bankruptcy
- However, in both instances, it is necessary to legalise the activities.
GS Paper II: Government policies in various sectors