Don’t ‘bet’ on gambling

The Law Commission of India has recommended ‘regulated gambling and betting’ in sports to check fraud and money laundering. It claims that regulation would not only empower the government to identify and prevent instances of gambling by minors and “problem-gamblers” but also enable it to “effectively curb the menace of black-money generation through illegal gambling”.

The report titled ‘Legal Framework: Gambling and Sports Betting Including in Cricket in India’ suggests a three-pronged strategy — reforming the existing gambling (lottery, horse racing) market, regulating gambling and introducing stringent and overarching regulations.

It is recommended that only licensed operators should offer gambling/betting and the money transactions should be linked through PAN and Aadhaar cards to ensure transparency and state supervision.

The report further suggested that there must be a cap on the amount that one can legally “gamble”, as well as on the number of transactions an individual can make in a specific time period.

The commission has recommended taxation of any income derived from gambling and betting, as well as allowing foreign direct investment in States that permit casinos. It is claimed that this would “propel the growth of the tourism and hospitality industries.”

There will be a bar on the participation of minors and those who get subsidies or do not fall within the purview of the Income-Tax Act or the Goods and Services Tax Act. Regulation of casinos, maintenance of accounts, audits and safeguarding of employees have been advocated.

There is a recommendation to extend the exemption granted to horse racing from gambling prohibition to other skill-centric games.

Before analysing the implication of the recommendation of the Law Commission, let us understand the present legal position.

In India, the Public Gambling Act of 1867 prohibits running or being in charge of a public gaming house or a ‘Casino’. The penalty for breaking this law is a fine of ₹200 or imprisonment of up to 3 months. Additionally, this Act prohibits visiting gambling houses, which attracts a fine of ₹100 or imprisonment of up to one month.

However, gambling is a State subject and only States can formulate laws on gambling activities . Currently, only three States allow casinos.

There are court rulings that wherever skill centric games are played, it may not amount to gambling though money is earned or lost based on the outcome of the game.

We had lottery schemes run by various State governments. On seeing the havoc they played on the poor, many State governments ended lottery schemes.

It is true that at present the government machinery is not able to effectively tackle the prevalence of betting in sports, election results etc. It does not mean that we must legalise gambling.

The government seems to be keen on earning tax revenues through gambling. But this will be suicidal given gambling’s ruinous social and economic impact.

The Law Commission’s statement that casinos can promote tourism has to be taken with a pinch of salt. Though casinos boost tourism, it can ruin local businesses and social life and also lead to greater crime.

Hence, the government must reject the Law Commission’s recommendation in toto.

The writer is a retired banker