Sports Betting in India: an Argument for Legalisation

Gambling or other forms of betting are legalised as games all across the world. However, with India, there is especially a culture revolving around this, which goes on to make it an immoral sport. Since ancient times, betting is considered as something that one should not indulge in. The Indian epic Mahabharata is a classic example, wherein King Yudhishthira lost his kingdom, fortune, brothers and wife due to his obsession with gambling. The Quran also renounces the sport as an immoral one, and considers the fact that it is addictive in nature. The impact of the religious texts and traditionally followed rules have built the perception of gambling or betting. It generally brings to our minds an image of a person who must have defaulted on payments and subsequently ruined his life and people close to him. This is something that has been fed into the systems of most Indians from a young age. But this article doesn’t focus on the perceptions revolving around this subject matter, instead it highlights the laws in place and how legalisation of betting could churn benefits for the economy.

In India, the Public Gaming Act, 1867 prohibits most forms of betting other than horse racing, lottery and rummy. Other than these three fields, no person is allowed to engage in any form of betting, online or offline. Any person violating the law has to face ‘dire’ consequences (please note the sarcasm) of paying a fine up to ₹200 or face jail for 3 months. This is how bad and ineffective the British-era enacted law is. The law, since ages, has failed to achieve what it tries to, i.e. to discourage the activity in its entirety.

In the South Indian state of Andhra Pradesh, cock fights are famous during the Makar Sankranti (Solar New Year) season. People from every profession, lawmakers included, participate. Estimates say that during every season more than tens of billions of rupees exchanges hands. Though the event, held across the state, is widely known to everyone, neither the police nor the judiciary bats an eye. If any, the ban has only promoted the underworld to associate itself with betting and create a parallel economy, of sorts, where the organisers are ruthless people who go to any lengths to recover their betting money. The ban in no way has been a success in preventing betting. If anything, the ban, in a way, has led to an increase in crime, corruption and money laundering.

On the other hand, the prohibition also costs the exchequer of the government dearly. For example, betting in cricket is the costliest of all. It is no exaggeration to say that it is a market worth tens of billions of rupees, especially due to the Indian Premier League. It is estimated that the value of bets waged every year in India, of which cricket claims a lion’s share, accounts for at least $40 billion. The Federation of Indian Chambers for Commerce and Industry (FICCI) believes that the government is forfeiting revenue of ₹1.9 trillion by not legalising betting. Moreover, Goa, one of the states where betting is legal, has earned ₹40 billion from casinos in 2018-19. In recent times, owing to the wider availability of smartphones and data, online betting has gained popularity. This has opened new dimensions for betting and created a global market for it. As Indian laws do not apply to international online gambling sites, Indian government cannot police them.

Betting is a ‘state’ subject under the Indian Constitution, meaning every Indian state has the power to enact their own laws. It seems only right to legalise all forms of betting. How should this be done? The answer is: Regulation. Licences should be issued to betting houses and individual bookmakers. It should be clearly laid out as to who can participate and how they can participate. Sports persons should be banned from betting as it might affect their play. One of the main arguments that critics of legal betting present is that crime will increase. Strict state vigilance can solve that problem quite easily. Another argument is about addiction. When rules about how much a person can bet are in place, the addiction problem can be tackled and it is not that everyone who gambles is addicted and affected.

When hearing Indian Premier League corruption case, the Indian Supreme Court of India asked the Law Commission of India (LCI) about how to tackle betting, and the corruption arising from it . The LCI has stated that betting ought to be legalised whilst providing recommendations for bringing a framework in place to regulate gambling and betting in sports in order to bring down fraud and money laundering. One can only add here that there should also be separate regulations for offline and online betting, as the methods on which they operate are different.

Now, technology has further bridged the gap between bookmakers and wagers, which makes regulation of betting a serious challenge. Try googling ‘sports betting in India.’ You will be amazed by the number of online betting sites that will pop-up. All these sites go unguarded and they pretty much make their own rules. With no operations in India, the authorities cannot control them which makes it easy for Indians to access the websites and pay through e-wallets. All these organisations will fall in line, when there are strict regulations in place. Robust regulation that governs betting will eventually weed out the black market and its operators and pave the way for the growth of a service industry: sports gambling industry. Moreover, when it is legalised, people in the betting business will have some incentive to improve services to customers.

Ancient Hindu texts have also been for legalization of gambling. References to that effect can be found in the Manusmriti, India’s most well-known Hindu law book and the Atharva Veda, a foundational text of Hinduism. Kautilya, an ancient political scientist, also suggested in his famous book Arthashastra (literally, ‘Economics Text’) that the state could collect 5% tax on betting. This clearly shows precedent for the argument for legalisation of betting.

Many say that betting leads to crime, corruption and money laundering. In contrast, not having vigilance has helped these problems develop in the first place. According to the FICCI, gambling has only become a socio-economic problem due to the absence of regulation in place. Betting constitutes a vast global market. Our extant laws need to be updated taking reality into account. The ban on betting only translates to an increase in crime, money laundering whilst causing parallel economies to spring up and revenue to be lost to the government. The government should, therefore, realise what is at stake and take steps to legalise betting. The success stories of Goa and Sikkim should not be forgotten. When the small states are earning billions of rupees, imagine how much bigger states, with a much bigger population, could earn by taking the right measures. Of course, there are problems. There will be. But legalisation of betting more than offsets the negative effects of not legalising it.


Kartik Balaji Kundeti

A low-key individual with keen interest in Economics and Policy making. Currently pursuing Economics from SRCC, University of Delhi.

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