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Report No. 276

Chapter VII

Public/ Government Responses

7.1 On receiving the reference from the Supreme Court in Board of Control of Cricket in India v. Cricket Association of Bihar & Ors.,192 to study the possibility of legalising betting in India and its positive and negative implications, the Commission issued an Appeal dated 30 May, 2017 asking the stakeholders, operators, organisations, and the public at large to respond to the same. Besides this, letters were also sent to the State Governments to give their respective opinions on the following issues:

a. Will legalising betting and gambling help in curbing illegal activities undertaken by the citizens of our country in this regard?

b. Will licensing such activities help the government in earning substantial revenue and generate employment?

c. How far legalising betting and gambling will be morally acceptable in the Indian scenario?

d. What would be the possible mode by which people indulging in these activities can be safeguarded from bankruptcy?

e. In the event it is decided to be legalised, should foreign companies operating in the field of betting and gambling be allowed to have a foothold in the country?

f. Any other relevant issue.

7.2 The Commission received numerous responses from various stakeholders including State governments, individuals, operators, associations of operators and institutions. The questionnaire received a mixed response. Some people have opposed the legalisation of gambling and betting, contending that it creates a pernicious atmosphere and tends to vitiate the solemn nature of transactions. Such activities expose and exploit the vulnerable sections of society.

A losing gambler, chases the metaphorical rainbow and is allured by the chances of recouping wins, which misleads any human, only to cause further sorrow. Such activities are not consistent and in conformity with the Directive Principles of State Policy enshrined in Article 39 of the Constitution.

7.3 Many responses cited examples from the Mahabharat and the Ramayana and referred to various prohibitory clauses from ancient texts. They canvassed that it would breed corruption, match fixing and may give rise to various criminal activities. The State Government of Odisha has expressed that such activities are unethical and not in the interest of the public at large. However, if they prevail, such activities should be regulated within the premises of clubs, hotels, and associations. In any case, foreign companies should not be allowed to operate gambling facilities in India.

7.4 While some responses have expressly suggested to legalise gambling for entertainment purposes, others have, however, suggested that, as it is not possible to prevent such illegal activities, they should be legalised and there must be stringent provisions for regulating the same. They have argued that gambling should be regulated like the stock market, for some degree of skill is involved in both the activities. Decriminalisation of these activities could prevent people from being subjected to loan-sharking, i.e., incurring debts and borrowing loans at exorbitant rates.

It will also preserve the integrity of the 'game'. As the illegal and unregulated betting industry is thriving and it is extremely difficult to curb/control it, it is necessary to legalise and regulate such activities to prevent pernicious consequences that it ensues. This will, on one hand, generate huge revenues for the States and on the other hand, would save people from any kind of inconvenience at the hands of the law enforcement agencies. This would especially help in curbing unethical betting activities of the likes of match fixing in sports.

7.5 It has also been argued by many that since horse-racing has always been considered legal, gambling and betting activities should also be treated alike.

7.6 The straight-jacket prohibition on gambling has resulted in a rampant increase in illegal gambling, resulting in a boom in black-money generation and circulation. Regulated gambling could ensure detection of fraud and money laundering and would create transparency. Betting and gambling transactions should be linked with operator's as well as player's/participant's Aadhaar card/PAN card, so as to ensure transparency and State supervision.

The cap on the maximum amount that can be staked in a wager should be fixed by law and be strictly implemented. Such amount must be so prescribed that an individual with limited means can also participate in gambling activities. Further, wagering should be restricted to money alone; not in kind. Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, Virtual Currencies (VC - also known as Cryptocurrency), etc. Stringent law(s) should be put in place to control Foreign Direct Investment and at the same time, to prevent money laundering, while also implementing necessary tax reforms.

7.7 There were some responses that expressed concern that if websites are to advertise content related to gambling, then it should be ensured that there is no objectionable or pornographic content displayed on their platforms/portals. Violations of relevant provisions of law laying down standards of obscenity should attract severe penal consequences for the same.

7.8 It was also suggested that if the tax rate is higher than 20 per cent of gross gaming revenue (GGR), it will have a negative influence on the pay-out level of the licenced operators. Therefore, there must be a moderate rate of tax on such activities as also a moderate/low GST rate.

7.9 The All India Gaming Federation (AIGF) has inter alia suggested to remove the embargo on goods and/or service providers from offering games or contests as long as there is no separate consideration for entry fee apportioned for participating in such games/contests. Thus, section 2(1)(r)(3)(b) of the Consumer Protection Act, 1986 which prevents the conduct of any contest, lottery, games of chance or skill for the purpose of promoting any product or interest should be accordingly remedied.

7.10 Some people have suggested that since a huge amount is siphoned off to foreign countries every year and the government loses the revenue, it is in the interest of the general public that though gambling and betting are State subjects, the Parliament should enact a law in exercise of its legislative competence under Article 249 or Article 252 of the Constitution of India. Additionally, it was suggested that, an Inter State Council may be constituted under Article 263 of the Constitution for effective regulation of Gambling activities in India.

7.11 A gist of the responses from the stakeholders is given in the Annexure Ito this Report.



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