While it may be tragic that it has taken recent events to refocus the debate on legalising sports betting, the silver lining is that never has the time been so ripe.
Fuelled by the 140-year old Public Gaming Act, which punishes public gambling, and the Information Technology Act, which requires service-providers to crack down on online gambling, law enforcement agencies have so far targeted bookies and companies with criminal and civil lawsuits.
How should betting be done in a safe and effective manner? Last year, the Federation of Indian Chambers of Commerce and Industry (FICCI) floated a discussion paper that seeks to answer exactly that query, while offering a glimpse at the possible obstacles on the road ahead.
The three major hurdles, according to the FICCI, are: defining the scope and mechanism of regulation; implementing sports betting in a constitutional context; and hammering out the issues of taxation.
The first and foremost of these issues is making sure that by allowing betting on sports, the door is not accidently left open for wagers on speculative financial instruments or on industries like insurance.
Furthermore, the type of bets that can be placed requires clear definition. For instance, in an ideal system, betting on whether (in cricket) the next ball will be a no-ball should be disallowed. This would allow the system to avoid incidents such as the recent spot-fixing allegations, and remove the ability of individual players to fix a particular result.
In this vein, the government could draw up a list of high-risk and low-risk sporting events on which money can be bet. Choosing less popular games at the outset could be an advantage, as the tax revenue collected from the betting could be ploughed back into promoting the sport in question.
Finally, to settle the regulation issue, the FICCI proposes that a national regulatory body be established. It would not only look after issuance of licences to betting operators but also perform several administrative and quasi-judicial functions that could maintain a system of checks and balances.
The current hue and cry over betting and pleas to the Sports Ministry to legitimise it are unlikely to be answered as the power to legislate on betting is the prerogative of the State as per the Constitution.
While a Central legislation on the subject is of paramount importance, Parliament can only bring in a law under one or two exceptions — both of which are rather difficult. The primary objective here should be to encourage important States (in terms of betting activities) such as Maharashtra, Tamil Nadu, Delhi and Andhra Pradesh, to take steps to legalise sports betting. FICCI suggests that perhaps the Public Gambling Act be amended in such a way that it will give the States the discretion to adopt similar legislation.
The final piece to the puzzle is, of course, taxation. Revenue collection is possibly the most widely touted advantage of allowing betting and as such must be used to effectively enforce the regulating model.
For instance, an issue that often serves as a make-or-break test for the system is by deciding on whether the taxation burden should fall on the betting operator alone or also on the customer. While taxing the customer could net a bigger fish, it turns potential customers away, leading the operators to set up shop in a country that has a ‘lower customer tax.’ Dividing the spoils is also a sealing factor: in some cases, it can be funnelled back into the promotion of the sport or it can be diverted to fund further regulation or help charities that deal with gambling addiction.
Nevertheless, FICCI makes it amply clear that a robust regulating model is no substitute for a swift justice system, harsh punishment of sportspersons engaging in fixing activities, and the political will of sporting bodies in tackling downside issues that come with the game.
