Law commission recommends legalising betting on sports

A step to regulate illegal activities like money laundering

Business & Politics

July 17, 2018

/ By / Kolkata

A step to regulate illegal activities like money laundering

A step to regulate illegal activities like money laundering

The law commission said that legalising betting in sports will generate immense revenue, which can be used for “social welfare”and in curbing underworld influence that is associated with the sport.

The law commission of India has submitted a recommendation, suggesting the government to legalise gambling and betting on sports. The law panel stated that the government’s incapability to enforce a complete ban on betting led to a rise in illegal gambling. As a result there has been a rise in the generation and circulation of black money.

The commission has asked to make the transaction cashless in order to regulate illegal activities such as money laundering. The report also suggested linking Aadhaar and Permanent Account Number (PAN) cards of an individual participating in betting and gambling.

“For participants, there must be a cap on the number of transactions an individual can indulge in these activities in a specific period, that is, monthly, half-yearly or yearly,” the report said.

The report titled Legal Framework: Gambling and Sports Betting including Cricket in India, leaves the final call to parliament and the state legislatures. The commission also adds that such a move will generate immense revenue which can be used for “social welfare”, and curb underworld influence that is associated with the sport. “Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option,” the report further added.

The commission also recommended amending the laws regulating foreign exchange and India’s FDI policy to allow investments in the casino and online gaming industry. The committee said that allowing FDI in the industry would “bring substantial amounts of investment to those states that decide to permit casinos, propelling the growth of the tourism and hospitality industries, while also enabling such states to generate higher revenue and employment opportunities.”

Forms of legal gambling in India

Each state in India has separate legislations on gambling. Different forms of gambling are selectively allowed through horse racing (there are nine courses in India formally run by the turf authorities), lotteries and casino (allowed only in a handful of states and union territories like Sikkim, Goa and the union territory of Daman & Diu). Some states in India have banned gambling and it is considered as a criminal offence, whereas in some states lotteries are banned. In 1998, the Central Lotteries (Regulation) Act allowed state governments to conduct lotteries, to a maximum of one draw a week and the states then made their own laws around their specific lotteries. Out of the 29 Indian states, 13 have legalised lotteries.

How much money is gambled in India every year?

According to an estimate by the Federation of Indian Chambers of Commerce cited in various sources, the Indian betting market is said to be worth USD 60 billion, with cricket betting accounting for 80 pc. The illegal betting market of India is vast. There is also a large underground betting market in operation that mostly bets on cricket.

In India betting parlors are illegal, whereas online gambling is unregulated. Sikkim is the only state that has a regulatory law on online gambling. According to the Doha based International Centre for Sports Security, which promotes integrity and security in sports, the illegal betting market in India is worth USD 150 billion a year. That includes USD 200 million bet on every one-day international played by the Indian cricket team.

A UK-based Betting Adda website, that claims to offer “help and advice on sports betting, mainly cricket, to punters from all over the world”, says that it gets 5,000 new registrations and 500,000 visitors every month from India.

People against the legalisation

Prof S Sivakumar, a dissenter on the panel, said ‘legalised gambling’ should not be done in India as it will further worsen the condition of the poor, while submitting a note to the Centre he further criticised the panel for not acting in accordance with SC’s 2016 recommendations which suggested a closer look at legalizing betting within the contours of cricket and not sports as a wide category.

Congress spokesperson Manish Tewari said that “If you legalise betting on sports, not only will you destroy sports, but turn every ‘paan (betel leaf) shop’ of this country into a ‘juye ka adda’ (gambling den). The reason why most of the Indian states do not have lottery or the fact that lottery is banned, is because of the extremely negative social implications of gambling.”

The report has been formulated in furtherance of a Supreme Court directive issued in the case of Board of Control for Cricket in India v. Cricket Association of Bihar & Ors., wherein the apex court had mandated the Law Commission of India (LCI) to study the possibility of legalising betting in India.

The Court had then observed, “… the recommendation made by the Committee that betting should be legalised by law, involves the enactment of a Law which is a matter that may be examined by the Law Commission and the Government for such action as it may consider necessary in the facts and circumstances of the case.”

“Agencies need to be established right from national to state level to ensure that the laws are being effectively formulated, adhered to and all the offenders are punished. An upper threshold may also be set for betting activities beyond which the bookies will be punished as per the laws of the land. The Law Commission of India, in its 276th report, has recommended legalisation of regulated betting and gambling activities, asserting that a complete ban has not been returning the desired results. India should have a clear law relating to betting keeping in mind that people with a criminal bent would not stop in making money out of betting. Center and state government should unite irrespective of their respective ideologies keeping in mind the global ways of dealing with betting in sports,” Kalyan Bhaumik, Advocate, Supreme Court of India told Media India Group.

Countries that have legalised betting

There are countries that have legalised betting and earn a major profit through it. UK is one of the biggest betting industries in the world. Betting was legalised in UK in 1961 and is not just limited to sports, but also includes bets on elections and the royal family of UK. According to a report, over 10,000 betting parlours opened up all across the UK within six months of betting being legalised. According to the industry regulator Gambling Commission, the gross gambling yield in the UK between April 2016 and March 2017 was USD 18.7 billion, that is equivalent to USD 282.73 for every man, woman and child in the country.

Another country that makes profit through the betting industry is Australia. Statistics of the financial year 2015-16, showed sports betting expenditure in Australia increased from USD 609 million to USD 690 million.

In the month of May this year, the U.S. Supreme Court paved the way for states to legalise sports gambling in the country. This decision will allow businesses and states to cash in on billions of dollars.

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