Make betting legal, and all the troubles with the Gentleman’s Game would go away. That seems to be the refrain of those who argue that legalising betting in cricket will clean up the sport and, in one fell swoop, result in the government raking in more from the sport. But the experience from horse-racing, the only sport in which betting is legal, tells us that the euphoria is misplaced.
So, what are the lessons from horse-racing? First, jockey-fixing, the counterpart to match- or spot-fixing in cricket, which is caused by a deviant jockey “hooking” to slow down his/her horse’s run on the turf, is supposed to be eliminated by watchful stewards. But in reality, despite several suspensions, it is well known that races still do get fixed.
Second, in horse-racing, a large number of bookies are outside the “legal” ring of betting in the turf clubs. For instance, though the Bangalore Turf Club (BTC) operates the totalisator (tote) betting system in which punters participate, there is also “another group of unlicensed bookies outside the turf club network,” says a senior Commercial Tax official in Bangalore. They operate illegally, evade betting tax and do not pay the club the commissions due to it. Sources say even licensed bookies sometimes under-report their turnover to escape payment of commission to the club.
Over the years, betting volumes at the BTC have increased several-fold. During the 1970s, races were run only during the summers; now there are 60 days of racing during the year. The totalisator is a highly automated system, which, according to the former BTC chairman, K.M. Srinivas Gowda, ensures that “not a single penny is unaccounted for.” In fact, he says, the club had suggested a few years ago that it was well-positioned to implement a legalised system of betting in cricket.
In 2012-13, the Karnataka government mopped up Rs. 116.38 crore by way of betting tax in Bangalore, up from Rs. 56.02 crore a couple of years earlier. Last year, it raised Rs.141.57 crore by way of betting tax in Bangalore and Mysore. But these figures ought to be seen in the context of what the turf clubs themselves earn. For instance, the BTC earned Rs. 1,350 crore in 2012-2013 with an average daily attendance of 10,000 enthusiasts on each racing day. Dr. Gowda warns that any move to increase the tax rates will slow down the growth of betting turnover. The main reason for the sharp increase in revenues in the last couple of years was the increase in tax from 4 per cent to 8 per cent.
The State levies a betting tax of 8 per cent on the tote and a “composition” on bookmakers, which amounts to Rs. 35,000 a day for bookies in the first enclosure and Rs. 15,000 on bookies in the second enclosure per day. A composition of Rs. 15,000 is also levied on off-course days when Pune and Mumbai races are telecast, attracting punters from Bangalore.
