Legalisation of Betting in India
Saransh Tripathi
Birla Institute of Technology and Sciences, Pilani
Pilani
ABSTRACT
This Paper is a short review and analysis on
legalization of Gambling and Betting on Sports
in India. The paper begins with a short
introduction to what is meant by gambling and
how it different from Betting. Following that we
discuss the current scenario of betting market in
India. The paper focuses on the Gambling laws
and the reason of it being illegal. Gambling
being prevalent in many Countries, which
includes big nations like UK and Australia, has
its benefits to the nation’s economy which if
brought with proper implementation could
uplift our economy as well. Gambling laws differ
from state to state, which brings the paper to the
gambling market of Goa (only state where it is
legal), and how it helps to uplift the economy of
the state. The paper also reflects the negatives
which come along with the legalization and ends
with how it could be properly implemented to
subdue those negatives.
I. Introduction
“It's better to have a regulated immoral practise than
a dark crime”. Legalization of betting in India has
been one of the most hotly debated due to the sheer
number of entities affected by it and the moral and
financial values that are questioned by it. Betting has
been considered a social evil by the society
especially due to the stories from Mahabharata,
while economically it could be one of the major
factors contributing towards job creation and
economic development.
This paper aims to study all these different factors
by analysing the statistical data of countries where
betting is legalised and perceive it through Indian
point of view. The paper first tries to analyse the
Prevalent Indian gambling system, laws that govern
them and then tries to suggest a policy which could
be implementable.
Ambuj Garg
Birla Institute of Technology and Sciences, Pilani
Pilani
II. Gambling and Betting
Wikipedia describes Gambling as the “wagering of
money or something of value (referred to as "the
stakes") on an event with an uncertain outcome, with
the primary intent of winning money or material
goods. Gambling thus requires three elements be
present: consideration, risk (chance), and a prize”. In
India though, Gambling is a general term used for
any event or sport in which people wager money.
This could range from local tournaments, cotton
prices or small illegal casinos huts to large casinos
and betting on horse races and cricket matches. The
nexus involved is similar in terms of way they
conduct business irrespective of the range or money
involved. Betting differs from gambling only in
terms of usage. Gambling is a loose word used for
all the types of games involving wagers and winning
based on luck while betting is much more structured
and incorporates some form of paper documenting
the laws and conditions of the bet.
III. Gambling laws in India
One of the biggest issue with Indian betting Industry
has been the vague and obsolete gambling laws
written in the constitution. The Public Gambling Act
of 1867 and the Prize Competition Act, 1955 are two
laws that regulate the gambling Industry in India.
The lack of new regulations have led to number of
loopholes in the legal system, which has been
extensively exploited by the gambling websites and
different gambling vendors. The Public Gambling
Act of 1867 describes a gaming house as "any house,
walled enclosure, room or place, playing or gaming
with cards, dice, counters, money or other
instruments of gaming or is found there present for
the purpose of gaming, whether playing for any
money, wager, stake or otherwise. The definition
fails to mention the internet and thus initiates a
debate on the legality of the online gambling
industry. The amendment of 1976 also fails to
provide any clarity regarding the online gambling
industry. Additionally, the act fails to clearly define
what gambling is. The section 12 of the article states
that "Act not to apply to certain games.—nothing in
the foregoing provisions of this Act contained shall
be held to apply to any game of mere skill wherever
played”. This again creates a confusion as there is no
clear definition for which game will come under
which definition. Prize Competition Act, 1955 is
also frequently brought up in the debate. The acts
bans prize competitions with price money greater
than Rs 1000 per month. The vague language of the
law means it’s frequently used to debate the legality
of gambling industry. The basic conclusion is that
the gambling laws in India are confusing, poorly
written, and haphazardly enforced. There are no
laws that criminalize the mere act of placing a few
bets online and thus there are millions in the country
who are placing these bets, giving rise to this multi-
billion dollars controversial industry
IV. Basis of present laws
Betting on cricket, India’s biggest sport is
considered as a “game of chance” in India (not
because of legislative definition but due to a
Supreme Court precedent) and is hence illegal.
Betting on a game of chance contrasts with a game
of skill such as horse racing which is granted more
leeway. Though this is a bit unclear what defines a
game of skill and game of chance exactly. Betting
also has been portrait as an evil activity in Indian
mythological text, in which people went to an
unacceptable height of putting the most valuable
things on line. This has led to massive intolerance of
betting in India, with people linking it to the stories
they read and the end that the story had. Another
major reason behind the illegality of betting is that it
spoils the Integrity of the sport itself, which is a core
component in any sport. A sport is enjoyed because
of the honesty with which it is played, but legalizing
betting would attract more cases of match fixing and
spot fixing. Sportsperson would be attracted to
gambling due to self-assured sense of entitlement.
Betting has a more severe effect on common man
than the richer section of the society which can
afford risking their wealth. Betting attracts common
people to try their luck and putting their hard earned
money on line which eventually ends up with them
losing all of it, often pushing them to the brink and
leading them to a stage where they can’t afford even
basic amenities. The dream of a better life often
quite quickly becomes a never ending nightmare.
V. Calls for legalisation
The lack of a modern and effective legal framework
has led to a big nexus of illegal and illicit traders
running their own gambling and betting hubs. The
banning of the betting and gambling has led to a
whole underground betting industry. This industry
though illegal, is a market worth millions of dollars
and is fully fledging in the back streets of
metropolitans. These rackets are proving to be a
massive attraction for youth and adults looking for
some “thrill” and “quick money”. Gambling is not
only restricted to sports though, as there are various
other forms prevalent today. Matka gambling for
example focuses on betting on the prices of cotton.
Similarly there are multiple local card games in
which gambling takes place. Underground ring
battles or fights (dangal) also see massive bets being
placed. The lawlessness means all the sections of the
society are exposed to it, thus risking a negative
impression on infant minds. The racket proves to be
a fatal attraction for most due to people losing
massive amount of their money in it. The sheer
volume of money involved means there is no social
or moral boundary that shields the people involved.
From extortions to suicides and property
mortgaging, all are very common due to the debt trap
the gambler gets caught in. Though, the biggest
threat is to the game itself. The lack of transparency
means there is a massive threat to the integrity of the
game. Multiple attempts are being made to alter the
natural course of the game to a known possibility.
Players are being targeted so that certain events or
the whole event itself is “fixed”. This has been a
massive problem as highlighted by the IPL scandal
of 2013 and in various other domestic leagues. The
calls for legalisation are basically to create a legal
framework for people interested in betting and
shelter them from fake dealers and illegal operating
nexuses. The lack of total enforcement has meant
that in any case it would be impossible for the
governments and managing bodies to totally
eradicate the betting. A better way is to legalise the
betting and safeguard everyone involved from the
issues mentioned above. It will allow Government to
keep a check on all the bodies involved and create a
system which would prevent exploitation of bidders
and in general common man
On top of this, legalization brings along with it
various opportunities. As per the reports that
Federation of Indian Chambers of Commerce and
Industries (FICCI) showed in 2016, the
Underground Betting Market in India is worth more
than rs.10, 00,000 cr. Now there are multiple
advantages here in legalizing this market, the first
being the revenue that the government could
generate through the legal wire or cash transaction.
The second being the amount of job opportunities
that would come into the market due to government-
controlled betting. For example, the Goa state
collected a revenue of Rs. 130 cr in the year 2013
from the Gambling in casinos alone. Jobs sectors
like security, IT, Management, call centres would
boom. IT sector would provide a proper accounting
of all bids and transaction, whereas management
sector would provide for scheduling of betting and
at the same time the gambling Industry would lead
big firms opening and creating tons of other small
jobs. The third opportunity to the state will be
reduction in the number of criminal (infamous cases
of spot and match fixing in IPL) or fraud cases (these
are not recorded since gambling is illegal but often
happen with people who indulge in such activities)
VI. Where legalisation done and stats
There have been multiple countries which have
legalised betting though with different restrictions.
The paper will try to analyse each of these as an
experiment trying to gauge its effect on economy
and social structure of the country. It will also try
to investigate any peculiar effect the legalisation
could have.
GAMBLING EXISTING IN COUNTRIES
1. UK
With over 1000 betting shops in London, the betting
market in UK is worth £650 million, with an annual
growth rate of over 7%. Over 2.1 million people are
indulged in legal gambling. The Gambling
(Licensing & Advertising) Bill (December 2014)
has changed the tax rates from 6.5% to 15 %( on
profits). The bill also changed the taxation of remote
gambling from a 'place of supply' basis to a 'point of
consumption' basis. That meant, the tax which was
given to the state where the gambling firm or
Industry was, now had to be given to the state where
the bet was bought. The betting industry alone is
reported to contribute £6 billion as of January 2010,
0.5% of GDP. Furthermore, it employs over 100,000
people and generates £700 Million in tax revenue.
The laws come along with age restriction, which
changes from sport to sport and state to state.
Multiple steps have been taken though to make sure
that minimal negative effects crop up due to the
legalisation .All Ads are issued by the Committees
of Advertising Practice (CAP) and administered by
the Advertising Standards Authority (ASA) to
prevent any agency from misleading people or
broadcasting of ads that could have negative effect
on the younger audiences. Along with that Gambling
advertisements must comply with the industry code
for socially responsible advertising which is
administered by the Industry Group for Responsible
Gambling (IGRG).
2. Australia
More than 80% People in Australia are indulged in
gambling, with nearly 4% Adults playing pokies
once a week. As per the stats of 2015-2016 the
gambling market revenue made up 7.7% of state and
territory taxation revenue. Though different states
have different legal procedures and laws for
gambling but stats of 2008-9 show that the gambling
revenue of the nation was just over whooping $19
billion. The figures are quick to highlight the
massive addiction that gambling has become in
Australia with 1.4% to 2.1% of adults facing
significant problems due to gambling. One peculiar
feature of the Australian taxation system is that the
government in Australia does not tax the Gamblers
rather taxes are imposed on the gambling
Authorities. The reason behind this is the fact that
Gambling is not considered as a profession but a
hobby or recreational activity, i.e. it is not the
income of the person but the good luck. Ghana,
South Africa are some other countries where betting
has been legalised.
VII. Negatives
The biggest difference between legalisation of
betting in India and other countries is the complex
social fabric of the Indian society. The ancient text’s
portrayal of betting means there would certainly be
a backlash from certain communities who would
feel that their social norms aren’t being respected.
Also there would certainly be a feel of uneasiness
and lack of acceptance among the society. Recent
Sabarimala row is an example of how people turn
violent and things get out of hands when people feel
their values being threatened. Also there is a massive
danger of betting becoming a norm and giving
people a free hand to destroy their lives. As
discussed above legislation of betting would present
a challenge to sports to maintain their integrity. A
whole new Pandora’s Box will open which can catch
sports agencies unprepared.
There would also be an effect of gambling on
children and the values which are being passed on to
them. The government’s inefficiencies and lack of
proper implementation is another grey mark which
needs to be considered. This could lead to situation
where the original purpose would be defeated and a
whole new complex set of problems would appear in
front of the authorities.
VIII. Implementation
The biggest hurdle in the path of any law being
passed in India is the part that comes after it, the
proper implementation of the law. The laws required
to counter such a big underground market has to be
implemented with the utmost sincerity. To start with
a completely separate department of governance,
equipped with resources and legal power to deal
with betting and its laws (amendment), has to
construct. This department would appoint officials
and pass the contracts to the companies that could
provide bets. A proper system needs to be created,
to handle the request for new licenses so that only
legitimate companies with proper structure could
provide these services. All the accounting and
revenue generation needs to be properly documented
by these betting companies, failure of which should
lead to cancellation of licenses.
A committee would work on cracking down all the
black markets that are already present. Legalisation
of betting should ensure a single legal passage which
allow people to bet on.
Like Alcohol, state has to put an age limit for
gambling, as children being immature are easily
attracted to such “thrills” without knowing the
complexities involved, and its possible
repercussions. It should be mandatory to link Aadhar
and pan cards with every betting account. Similar
thing has already being implemented on mobile
wallets, for ex KYC.A minimum annual income
must be required to open an account thus
safeguarding people from giving away their basic
livelihood. A cap should be implemented on number
of bets that a person can place per month.
Along with that the government has to decide the
sports and the level (sport) above which betting
could possibly be allowed. The legalisation law
should only abide for developed sports such as
cricket, hockey, football etc. to preserve integrity of
up and coming sports as implementation of
regulations would be way tougher in them. Also the
levels at which a betting can take place for a
particular sport should be restricted. For example, in
cricket betting should not be allowed at Ranji and
state levels, as the players involved in it are less
mature, i.e., the players could affect their
performance under pressure of money, also
regulating at lower levels becomes difficult due to
the fact that it constitutes a much larger portion of
the game.
X. References
[1] Stephen M Mcklevey “The Growth in
Marketing Alliances between US Professional
Sport and Legalised Gambling Entities: Are We
Putting Sport Consumers at Risk?”
[2] An Unsafe Bet? The Dangerous Rise of
Gambling and the Debate We Should Be Having by
Jim Oxford
[3] A Policy Response to the E‐Commerce
Revolution: The Case of Betting Taxation in the
UK
[4] David Paton Donald S. Siegel Leighton
Vaughan Williams
[5]http://www.espn.in/espn/story/_/id/23518003/w
hich-countries-allow-gambling-sports-assessing-
impact-betting-world
[6] https://www.ndtv.com/india-news/betting-in-
sports-including-cricket-should-be-legalised-says-
law-commission-1878
[7] https://www.hindustantimes.com/business/with-
200-million-on-every-odi-match-illegal-betting-
thrives/story-5CDuIIgCrykqM2smIPn7dI.html
[8] https://www.gamblingsites.org/laws/

IX. Conclusion

In the end we conclude that there is no “best option”

in this case and it’s more about damage limitation.
The lack of efficient laws and stricter
implementation have led to a whole nexus of betting
agents who threaten to dismantle the social structure
of the lower rung of the society. People getting
caught in this nexus are struggling to get out of it and
thus a change is required. But then the legalisation
brings a whole new set of challenges and issues
which could lead to even worse state if not correctly
implemented. Thus paper tries to find a middle way
by suggesting a particular way of legislation that
subdues the negative effects of the legalisation and
try to safeguard interest of all the parties involved.