The recent headlines in the newspapers that the two men were apprehended by the Delhi police. These men were found to have illegally entered the Arun Jaitley Stadium during the match of Rajasthan Royals versus Sunrisers Hyderabad. This has again brought the issue of illegal betting to the fore. Again the clamor for legalizing, betting has gained force.
The proponents of legalizing gambling say that by legalizing the gambling, the government can curb the flow of illegal money into the country. It will also aid in curbing terrorism. Another argument is that it will boost the employment aspects for the people of India. However, there are many legal hurdles that the government faces to permit gambling in India.
When the betting scam of IPL 2013 came to light, the Supreme Court appointed the Lodha Committee to look into the issue of illegal betting and to suggest some reforms to be done in the Board of Control for Cricket in India. One of the reforms was the legalization of betting on cricket in India.
There are numerous legal challenges that have to be overcome in order to make betting legal in India. The first problem is that ‘gambling’ is a state subject. Entry 34 of List II deals with ‘gambling and betting’. Entry 62 of the State list gives power to the states to make laws pertaining to taxation on betting and gambling. Thus, the Union government does not have the power to legislate in the matter of ‘gambling and betting’. Thus, it is difficult to bring uniformity regarding gambling laws in India.
The Black Law Dictionary defines gambling as – “ Act of risking something of value for a chance to win a prize”. In Public Prosecutor v. Viraj Lal Seth, the Madras High Court explained the difference between Wager/Betting and Gambling. The judgment defined Wagering as “ Winning or losing of stake depends solely upon happening of an uncertain event.” In cricket, the outcome of the match cannot be predicted by the people. The skill of a player is not the sole criteria which determines the result of a match. The teamwork, the condition of the pitch are one of the factors that determine the outcome of a cricket match. Thus, the success of winning a bet on a cricket game is a matter of chance rather than skill. Hence, a bet on a cricket match is a wager. As per section 30, of the Indian Contract Act, 1872, agreements by way of wager are void. Section 30 says “ Agreement by way of wager are void; and no suit shall be brought for recovering anything alleged to have been won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.” Until this section is in force, no person can be compelled to pay the money that he has lost in a cricket bet. This renders the whole idea of legalizing betting infructuous.
In this epoch of technology, it is clear that most of the online gambling activities takes place via online channels. Entry 31 of the List I deals with ‘telephone and wires’. The Information Technologies rules 2011, rule 3(2b), 2011, mandates the “intermediaries’ like internet service providers, and search engines to not transmit any content that “relates to or encourages gambling”. This makes it clear that without the permission of the Central Government, it will be difficult for the states to promote gambling. This division of power is infringing upon the power of the states. As a ramification of it, the structure of cooperative federalism is getting weak in India.
Every state has a different approach regarding gambling and betting. Some states view it as a way to boost employment and tourism while others regard it as a vice and against the morality of Indian society. For example, Sikkim became the first state to legalize betting in India. In Sikkim, cricket betting is legal inside a game parlor. The same was followed by Nagaland where license holders are allowed to place bets. On the other hand, states like Telangana do not support gambling. In Telangana, the violation of betting rules is a cognizable and non-bailable offence.
In India, Foreign Direct Investment (FDI) plays a crucial role in the development of the economy. However, the FDI is prohibited in activities that relate to gambling. In countries like UK and Australia, there are many online gambling companies such as Betfair and Bet365. These companies have- impeccable records of providing a just and fair chance to the gamblers. By permitting these companies to partner with domestic firms, the government can set up a good favorable environment for the growth of online gambling.
Since independence, India has a good record of finding an amicable solution to any problem that endangers its economy and federal character. The same pragmatic approach is needed here. Under Article 249 of the Indian Constitution, the Rajya Sabha is empowered to transfer to the Union any of the matters contained in the State List by 2/3rd majority. Article 249 states “Notwithstanding anything in the foregoing provisions of this chapter, if the council of states has declared by resolution supported by not less than two-thirds of the member present and voting that it is necessary or expedient in national interest that Parliament should make laws with respect to matters enumerated in the State List specified in the resolution, it shall be lawful for the Parliament to make such laws for the whole or any part of the territory of India with respect to that matter while the resolution remains in force.” By doing this, pan-India gambling legislation can be introduced. In return, the states should be given a greater share in the revenue that can be generated through gambling.
A National Gambling Commission should be set up to regulate gambling in India. An identification number should be issued to the people who register to participate in gambling. The annual income of such persons should be assessed by the commission and a limit should be provided up to which a person can place a bet. It will prevent excess loss to a person. Only a person who is above 18 and has an annual income of over 3 Lakhs should be allowed to register themselves for online gambling.
Section 30 of the Indian Contract Act,1872, should be amended to make the contract based on gambling enforceable in the court of law. The regulations barring FDI in gambling activities should be scrapped and help from the foreign countries should be sought in order to flourish our domestic gambling sector.
The issue of legalizing gambling poses a grave challenge to the policy makers. It is imperative to boost the economy but at the same time it is equally important to protect the youths of the country from losing all their money and to avert them from getting addicted to gambling. There is a need to draft pan-India legislation on gambling based on the UK Gambling Act, 2005. One of the most protective clauses of this act is that it makes it mandatory for the betting companies to provide some amount of money to a new person who gets involved in betting. It will be a good opportunity for a person to understand gambling without suffering any loss. It aligns with the principle of welfare society which seeks to maximize the happiness of the people.