The Law Commission of India, in its 276th report, has recommended legalisation of regulated betting and gambling activities, while asserting that a complete ban has not been returning the desired results.
The report titled, “Legal Framework: Gambling and Sports Betting including in Cricket in India” read that having discussed both pros and cons of legalising regulated gambling and betting activities, it would be apt to say that the arguments in favour of the same far outweigh the arguments alluding to the immorality of these activities.
The report stated that since it is not possible to completely prevent these activities, effectively regulating them would be the only feasible option.
According to the commission, the following steps are required for regulation of gambling:
- A three-pronged strategy
- Reforming the existing gambling (lottery, horse racing) market
- Regulating illegal gambling
- Introducing stringent and over- arching regulations
Key Recommendations of the commission
• The commission made a distinction between ‘proper gambling for higher stakes and ‘small gambling’ for people with low income.
• Accordingly, it said that only individuals belonging to the higher income group shall be permitted to indulge in this form of gambling. On the other hand, individuals belonging to the lower income groups will have to confine themselves to ‘small gambling’, not being permitted to stake high amounts (falling within the bracket of ‘proper gambling’).
• It stated that since horse-racing, being considered a game of skill, has been exempted from the ambit of blanket prohibition on ‘gambling’, both by the legislatures and the judiciary, other skill-centric games may also be afforded this exemption.
• It said that the operators should focus on the safety and protection of players indulging in such skill-centric games.
• It also said that gambling and betting, if any, should be offered only by Indian licensed operators from India possessing valid licences granted by the game licensing authority.
• As for the participants, the commission recommended that there must be a cap on the number of transactions an individual can indulge in these activities in a specific period.
• It also said that the nature of stakes should be restricted to money with a linkage to PAN card and Aadhaar card, and the betting amount should be prescribed by law, having an upper limit on the amount one can legally stake in a gamble, which may be on the basis of the deposit, winnings or losses.
• It suggested linkage of Aadhaar/PAN card to betting for both operators and participants and cash-less digital transactions to help monitor cash flow.
• It also stated that the websites advertising gambling must compulsorily ensure that there is no objectionable or pornographic content on display on their portals/platforms.
• The commission further recommended that minors and people below the poverty line, those who get subsidies or do not fall within the purview of the Income Tax Act or the GST Act, should be debarred from participating in betting, to ensure the protection of vulnerable sections.
• Information regarding the risks involved in gambling/betting and how to play responsibly must also be displayed prominently on all gambling and betting portals/platforms.
• It also recommended that match-fixing and sports fraud should be made criminal offences with severe punishments.
• It also recommended that any income derived from such activities should be made taxable under the Income Tax Act, 1961, the Goods and Services Tax Act, 2017 and all other relevant laws for the time being in force applicable to such activities in India.
One of the Commission’s members, S Sivakumar, who did not agree with the majority opinion filed a separate opinion of dissent, stating that the report isn’t comprehensive enough and doesn’t quite address the social ills that such a legalisation can trigger.
He stated that the Supreme Court’s mandate for the Commission was only to ascertain legalisation of betting in cricket and not sports betting in general.
He asserted that legalising gambling is not suitable for the country and alleged that there are vested interests favouring such legalisation, for “amassing money undercover by a handful of game operators, thereby pushing the innocent masses to hands of poverty and penury”.
He further said that the socio-economic and cultural circumstances of the country are not pragmatic to accept legalised gambling activities, as it is still treated as a social stigma.
The report was formed in accordance to a directive issued by the Supreme Court of India in the case of Board of Control for Cricket in India v. Cricket Association of Bihar & Ors., where the apex court had mandated the LCI to study the possibility of legalising betting in India.
The top court had observed then that 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.
The LCI has, however, examined the legality of both, betting and gambling, and is of the opinion that the two are closely associated with each other.
• The report acknowledges the fact that with the advent of online gambling and the anonymity that it ensures, it has become extremely challenging for countries to monitor or curb gambling activities.
• It then highlights the advantages of regulating such activities, claiming that this would not only ensure transparency in the market but would also strike at the underworld’s control over the illegal and unregulated gambling industry.
• In addition, the revenue generated by regulating and taxing betting and gambling has been found to be a ‘good source of revenue’ to be ‘used for public welfare’.
• Therefore, the report stated that regulation would empower the authorised agencies to identify and prevent instances of gambling by minors and ‘problem-gamblers’ as well as save the public from any kind of inconvenience at the hands of the law enforcement authorities.
• It would also enable the Government to effectively curb the menace of black-money generation through illegal gambling.
• It, therefore, concludes that while States should completely ban ‘unlawful’ betting and gambling, a complete ban has been counter-productive, resulting in a boom in black-money generation and circulation.
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