YES | Jaydev Mody
Legalising it would help curtail an important source of black money and bring in revenue
Gambling is ubiquitous in Indian society: people bet on animal fights on streets, they make bets while playing cards and before cricket matches. As the Irish philosopher Edmund Burke correctly said, “Gambling is a principle inherent in human nature.” While societal attitudes towards gambling have changed in the last century, with gambling now seen as a legitimate form of recreation, Indian laws have not kept pace with the times.
Although gambling and betting is a State subject, the primary law on which States have framed their gambling legislation is an archaic, British-era law called the Public Gambling Act, 1867. Ironically, while India follows a British-era prohibitionist statute, the U.K. legalised and regulated various forms of gambling and betting many decades ago. The Law Commission of India’s endeavour to study the issue of whether or not gambling and betting should be legalised in the country is therefore a timely initiative to start the process of a much-needed reform.
Why legalise gambling?
The reasons to look at legalising and regulating gambling are manifold. First, gambling is already happening in a massive way. Law enforcement authorities are not able to stop it. Gambling and betting is mostly done surreptitiously, and is said to be controlled by underworld syndicates who use the unaccounted money earned from gambling activities for nefarious activities like terror financing. Legalising the activity will not only help curtail an important source of black money that is used by criminal syndicates, but also bring massive revenue to the state exchequer, which can be used for various constructive social schemes.
Estimates about the size of the gambling market in India vary, with a 2010 KPMG report suggesting that it could be $60 billion, while other, more recent, studies peg the value at a higher number. Even a conservative estimate suggests that the government could earn tens of thousands of crores as tax revenue by legalising sports betting. Additionally, if online gambling and casinos are also permitted, the estimated tax revenue would be much higher.
In addition to revenue generation, a legal and regulated gambling sector will also help in creating large-scale employment opportunities. Globally, wherever gambling is regulated, it has created a massive avenue for employment generation. For instance, the regulated gambling industry in the U.S. employs over 2.5 lakh people, while over 1 lakh individuals are employed in this sector in the U.K.
Unfounded concerns
Naysayers say that gambling is not morally correct in the Indian context. They suggest that it is responsible for addiction, loss of livelihoods and bankruptcy. These concerns are unfounded. Gambling has been prevalent in society since ancient times and has been accepted as a form of recreation on various social occasions. As regards the concerns about betting and gambling leading to addiction and bankruptcy, it must be noted that even though gambling is largely illegal, it is still rampant and unchecked. There are numerous instances of people losing their livelihoods and committing suicide due to unchecked gambling even today, with authorities turning a blind eye to the problem.
A robust regulatory framework governing the gaming sector will ensure that people do not fall prey to the excesses of gambling. Awareness campaigns should educate people about the perils of excessive gambling; minors, habitual gamblers and vulnerable sections should be excluded from having access to gaming facilities; and limits must be imposed on the amounts that can be wagered, based on a person’s financial capabilities.
Jaydev Mody is the non-executive chairman of Delta Corp Limited, a gaming company that is publicly listed in India
NO|Navneet Rajan Wasan
What is the guarantee that legalising betting will generate revenue as projected?
In 2016, while examining the Lodha Committee recommendations on legalising betting in sport, the Supreme Court wanted the Law Commission to examine whether betting on cricket should be legalised and a law framed to enable that. The Law Commission is yet to make its final recommendations. But going by news reports, the Chairman of the Law Commission and former Supreme Court judge, Justice B.S. Chauhan, has gone on record saying that he is in favour of a law to regulate such activities.
There is overwhelming support for the idea on the ground that having failed to control illegal betting, which happens on a large scale and also deprives the state of a huge revenue-earning opportunity, the only recourse left is to legalise, regulate and tax the resultant income. It is also argued that this would help control large illegal syndicates, which often operate from outside the country.
Ground reality
These are fallacious arguments and perhaps put forth without keeping ground realities in mind. It is like arguing that we are not able to control road accidents due to drunken driving, so we should consider legalising drunken driving and impose large fines to generate revenue. There can be no guarantee that legalising regulated betting will stop players from being a part of betting rackets.
We must remember that India is a developing nation where large sections of the population still survive on daily wages. A majority of people still live on a meagre meal or two after toiling hard. They cannot afford to send their children to school or take care of their basic health needs. However, their aspirations have changed in the last decade. Whether this is due to the impact of television, penetration of information technology, or utopian election speeches can be debated.
Ready fodder
What cannot be denied is that with the government’s push on Digital India, and with the availability of cheap mobile phones and Internet facilities at nominal cost, a majority of this population has access to mobile phones. There has been large-scale migration from villages to towns for better opportunities. These means of communication are used in a big way not only for entertainment but for making purchases, transferring money, or sending remittances home. Imagine a large crowd of workers outside the neighbourhood store selling lottery tickets, who invested a part of their earnings to realise their dreams. If betting were to be legalised, this segment would become ready fodder. Companies will host betting apps, tempting poor people to try their luck. Imagine the consequences of a poor person losing his hard-earned money on betting?
It is well known that as of now, most betting is restricted to individuals who sit on piles of black money and want to make a quick buck. The percentage of individuals who bet with hard-earned money is minuscule. Our abject failure in bringing people who have amassed huge illegal wealth by dubious means in the tax net should not be reason enough to legalise betting.
Moreover, what is the guarantee that legalising betting will generate revenue as projected, when radical steps like demonetisation and giving more power to tax authorities have not been able to make any significant change in revenue inflows or in curbing black money?
Navneet Rajan Wasan retired as Director General of Bureau of Police Research and Development and has served in the CBI and the NIA
IT'S COMPLICATED|V.M. Kanade
There are a number of hurdles and complexities in legalising gambling
In India, since the Mahabharata, the practice of gambling has been criticised. There is also no evidence to suggest that the tendency to gamble is inherent in human nature. Therefore, a large section of the population, particularly women, oppose gambling not only from an ethical point of view but also because it invariably leads to moral and monetary bankruptcy.
Regulation versus ban
Having said that, regulating gambling in a legal manner as opposed to a complete ban has its takers. There is a school of thought that a complete ban may in fact increase underground illegal betting and gambling activities, which may prove to be counterproductive. The first attempt to control gambling was made in 1867 with the Public Gambling Act which provided for punishment for public gambling and keeping of common gaming houses. Section 2 of the Act authorised each territory (now each State) to extend the Act to the State.
The Bombay Prevention of Gambling Act came into force in 1887. Gambling as defined in the Act includes gaming and betting. Generally, gambling is referred to as card games where high stakes are involved and betting is referred to as casino games and putting a bet on an event such as a match. From the various provisions of the Central and State Act, one can infer that while gambling is prohibited in public or public gaming houses, there is no prohibition on such activities in a private house.
Hurdles in legalising
In my view, there are a number of hurdles in legalising gambling. The Supreme Court has mandated the Law Commission to look into the matter. The existing law was passed before the Constitution came into existence and it was a Central legislation. If Parliament wishes to legislate on the subject, it will be difficult to do so, as the subject of gambling figures in the State List. As a result, the Constitution will have to amended first so that gambling can figure in the Concurrent List. Necessary infrastructure — police machinery, prosecutors, etc. — will have to be put in place.
The problem of online gaming cannot be curbed by merely amending the Information Technology Act where it finds a mention. There has been a steep rise in online gambling of late and governments are trying to find ways of curbing the menace. Relevant provisos will have to be made in the new Act if gambling is to be regulated. There will still be the issue of jurisdiction as online gambling goes way beyond India’s borders. How will you ensure that online gambling is safe and protects the interests and rights of players? It is easier said than done. In this context, the Supreme Court, in Board of Control for Cricket v. Cricket Association of Bihar & Ors (2016), mandated the Law Commission to study the possibility of legalising betting in India. Justice B.S. Chauhan, a former judge of the Supreme Court and Chairman of the Law Commission, invited views and suggestions in his letter dated May 30, 2017, from all those concerned, so as to arrive at a judicious opinion and make suitable suggestions and recommendations to the government. The report is awaited.
V.M. Kanade is former judge of the Bombay High Court
Published - March 30, 2018 12:15 am IST
