Backtracks on Report proposing legal betting and gambling
Hours after a 145-page report from the Law Commission of India was published, recommending that gambling and sports betting in that country should become a legally regulated industry and with many favourable comments from the Law Commission to follow on recommendations, a press release by the Ministry of Law & Justice was issued, saying: “The Commission hereby clarifies that… it has been strongly and categorically recommended that legalizing betting and gambling in the present scenario is not desirable, and that a complete ban on unlawful betting and gambling must be ensured…”
The title of the Commission’s report: “Legal framework: gambling and sports betting including cricket in India,” indicates one of the main areas of interest for Indian lawmakers and for Indian consumers.
The authors, which include senior judges, concluded that although in their view social harm was caused by sports and other online betting, the unregulated wagering was happening anyway and it was better to have official products that could be taxed and regulated.
“Many countries that prohibit gambling have not been successful, particularly with regard to online gambling. Incapability to enforce a complete ban has resulted in a rampant increase in illegal gambling, with a boom in black-money generation and circulation. Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option,” stated the report’s authors.
However, the press release issued last Friday added that the Commission was recommending that “effective regulation remains the only viable option to control gambling if it is not possible to enforce a complete ban in order to prevent unlawful activities…”
Politicians’ fears and those of the Law Commission are that with the spate of fixed games taking place in the country by criminal betting rings, open approval of gambling would only worsen the situation.
“Legal framework: gambling and sports betting including cricket in India”
The Report said that in France in 2016 the gambling market – “all networks included” – generated gross gaming revenue of EUR9.75 billion (US$11.4 billion at current exchange rates), while the amount of tax revenue collected from online gambling activity – including value-added tax – amounted to EUR429 million. Advocates for the legalisation move – as quoted in the report – said it would mean India could collect tax revenue on consumer spending that would otherwise go to the black market.
The report also makes reference to legalisation of “online gambling.” Regarding some safeguards on a regulated gambling and sports betting market, the Indian report stated: “Gambling and betting, if any, should be offered only by Indian licensed operators … possessing valid licences granted by the game licensing authority. For participants, there must be a cap on the number of transactions an individual can indulge in these activities in a specific period, i.e., monthly, half-yearly or yearly.”
The review added nonetheless that foreign investment should be considered for such a regulated sector, with India’s rules on foreign direct investment amended to permit investment “in the casino/online gaming industry” and “technological collaborations, licensing and brand sharing agreements, etc.”
The authors stated: “Allowing foreign direct investment in this industry would bring substantial amounts of investment to those states that decide to permit casinos, propelling the growth of the tourism and hospitality industries, while also enabling such states to generate higher revenue and employment opportunities.”
Currently, only two Indian states – Goa and Sikkim – allow some form of casino gaming.
An April 2016 report suggested that casino gambling by the growing middle class of Indian nationals had the potential to generate nearly US$10.2 billion annually by the year 2025, provided there is the right product in the market and that this market is well regulated.