From revenue gains to reduced crime, payoffs are huge.
Talk of legalising betting in sports has cropped up every now and then, but the Law Commission inviting feedback from the public in late-May was probably the first indication that the government was willing to re-look the issue. As per a report in The Indian Express, the government may be considering legalising online betting in sports, though sports minister Vijay Goel has denied receiving any proposal to this effect. The biggest positive of legalising betting will be cleaning up the system, given how illegal betting has attracted organised crime—investigations into nearly every match-fixing/spot-fixing scandal in cricket have thrown up links from time to time. Also, since a Ficci report pegged the underground betting market at `3 lakh crore in 2013, the government has clearly lost a lot of money as well—if betting was legal, licenses could be issued for a fee, there would be a GST on betting services, and winnings would be taxed. Even if legalisation doesn’t completely sanitise the betting industry, forcing operators to maintain electronic and paper trails will be a big help.
Since gambling is a state subject, legalising will work best if all states move concertedly. A lot will also depend upon how courts interpret the law, assuming the central gambling legislation remains unchanged and allows gambling to be legal in games of ‘mere skill’. In 1996, in KR Lakshmanan vs the State of Tamil Nadu, the Supreme Court ruled that competitions where success depends on substantial degree of skill would not fall into the category “gambling”; and even where there is an element of chance, if a game is preponderantly a game of skill, it would nevertheless be a game of skill. By this logic, gambling should have been allowed in cricket, but the presence of fixing in the sport has ensured it has remained illegal. In Lakshmanan, the court treated horse-racing as a game of skill while in the State of Andhra Pradesh vs K Satyanarayana & ors., it held that the card-game rummy involved a certain degree of skill. However, there are many card-games (flush, brag, etc) that are predominantly chance-based.
If gambling is to be legalised, the Centre and the states will have to take a call on whether they will treat gambling as a revenue-source and a job-creator to be encouraged in the manner jurisdictions like Curacao, Isle of Man, the state of Nevada (in the US) do. Or will it mean treating it in a morally neutral manner by seeking to reduce the social cost to acceptable levels, like most European nations do. Also, with gambling/betting moving online, jurisdictions are likely to get blurred. In such a scenario, centralised regulation could be the answer—but the Union and the states must then deal with questions on how the law is to be structured without impinging the federal structure.