LEGALIZATION OF BETTING IN INDIA: PROS AND CONS

Author: Khushi Bansal, A student at University Institute of Legal Studies, Panjab University, Chandigarh

The film industry has played a significant role in raising global awareness about betting, gambling, and related activities. While betting is often intended for entertainment and recreation, there are instances where it escalates into a serious issue, causing substantial losses and harm. Despite its negative connotations, betting has not been declared entirely illegal, sparking ongoing debates on the legalization of betting in India.

The question of legalizing betting remains a topic of discussion, with divergent views on its merits and drawbacks. While certain forms of betting, such as wagering on horse racing events, are regulated by specific laws in India, a comprehensive framework governing betting as a whole is still absent. The absence of a well-defined set of rules and laws for betting in India adds complexity to the regulatory landscape.

It is crucial to recognize the dual nature of betting, acknowledging its potential for entertainment while remaining vigilant about its transformation into a more severe form that can lead to significant societal and individual consequences. The ongoing debate on the legalization of betting underscores the need for a thoughtful and balanced approach, considering the various societal, economic, and legal implications associated with this form of recreation.

Historical Instances-

Ancient Indian scriptures unequivocally demonstrate that betting and gambling have been associated with royalty since the era of the Mahabharata. A notable historical occurrence of gambling is chronicled in the Mahabharata, where King Yudhisthira lost his kingdom, along with his brother and wife, to his uncle Shakuni in a game of Pachisi. This ancient epic highlights that betting and gambling were prevalent diversions with substantial consequences, even in the ancient Indian societal framework. The tradition of these activities persisted through subsequent historical periods, including the Mughal era, where rulers and other leaders engaged in betting and gambling as pastimes. This historical perspective challenges the notion that betting is solely a contemporary form of entertainment, emphasizing its roots in ancient times.

Certainly, Manusmriti explicitly addresses the distinction between gambling and betting in verse number 223 of chapter 9. According to Manusmriti, the use of inanimate objects for staking money is termed as gambling (dyuta), while the involvement of animate beings for the same purpose is identified as betting (samahvaya).

Similarly, Kautilya, in his renowned work Arthashastra, provides insights into the nature of gambling and betting. In his writings, Kautilya defines gambling as the act of wagering with inanimate objects like dice. In contrast, betting, as per Arthashastra, seems to encompass challenges and activities related to cockfights, animal races, and similar contests.

These ancient texts, Manusmriti and Arthashastra, not only acknowledge the existence of betting and gambling in ancient India but also elucidate the specific characteristics that distinguish the two practices. This historical perspective offers valuable insights into the cultural and societal nuances associated with these activities during ancient times.

International View-

Various countries, including India, the United Kingdom, the USA, China, Australia, Ireland, Finland, Canada, Thailand, and New Zealand, are recognized as significant markets for gambling enterprises. Each nation has distinct laws governing different forms of gambling. Notably, countries like the United Arab Emirates and Brunei strictly prohibit all forms of gambling due to cultural and ethical considerations. North Korea allows gambling exclusively for tourists through guided tours.

Legalization of gambling varies across nations, with some employing intricate systems. For example, the United States of America has federal laws for betting and gambling that differ from state to state. Japan historically deemed gambling illegal but has recently legalized sports betting and established several casinos. The regulation and legalization of betting and gambling often hinge on the specific activities involved, creating a diverse landscape globally.

Crucially, there is no international law that uniformly governs betting and gambling worldwide. Instead, the legal frameworks are shaped by national legislation and precedents established through landmark cases.

Betting and Gambling in India-

The COVID-19 pandemic has led to a surge in the popularity of betting and gambling in India, driven by a significant portion of the population relying on prize money as a means of livelihood due to the lack of alternative income sources during the complete lockdown in the nation. In a broad sense, the legal status of betting and gambling in India is not officially acknowledged. The country does not endorse or have a well-established framework of rules and guidelines to govern these activities. However, it’s important to note that there are exceptions to this general stance. For instance, lotteries and betting on horse races are typically considered legal in India, highlighting specific instances where these practices are sanctioned within the legal framework. The absence of comprehensive regulations for betting and gambling in the country adds complexity to the evolving legal landscape.

In India, The Public Gambling Act of 1867 stands as the oldest national legislation that prohibits gambling and betting. The Prize Competition Act of 1955 specifies that prize competitions offering rewards for solving puzzles, numbers, alphabets, crosswords, missing words, or picture-related contests, where the winnings exceed 1,000 Rupees, are banned.

The emergence of online betting and gambling in India has brought attention to the need for the Information Technology (IT) Act of 2000 to monitor cyber activities in this domain. However, as of now, no amendments have been made to address this aspect. Notably, during Indian Premier League (IPL) cricket matches, online betting reaches its peak, even though the legality of online betting and gambling remains ambiguous.

Dr. Shashi Tharoor, a Member of Parliament, presented The Sports (Online Gaming and Prevention of Fraud) Bill in 2018 in the Lok Sabha. This proposed legislation aimed to comprehensively regulate online gaming. States are provided with the option to create their own rules if they choose not to comply with national directives, adding complexity to the regulatory landscape.

Article 246 of the Indian Constitution delineates three lists that divide legislative powers: the Union List, State List, and Concurrent List. The regulation of betting and gambling falls under the State List, specifically part II of the Seventh Schedule. Consequently, state governments possess comprehensive authority to control and legislate on betting and gambling practices within their respective states. This grants them the autonomy to formulate laws tailored to the specific context of their state.

Leveraging this constitutional power, some states in India have chosen to legalize certain forms of betting. For instance, Goa, Sikkim, and Daman and Diu have legalized the operation of casinos within their territories. In other states such as Punjab, Assam, Kerala, Maharashtra, Manipur, Nagaland, and Sikkim, among others, various forms of lotteries have been legalized as per their state-specific laws. The constitutional distribution of powers allows states to independently regulate and decide the legal status of betting and gambling activities within their jurisdictions.

Game of Skill or Game of Chance-

In India, there is a legal distinction between games of chance and games of skill. While games of chance are generally not permitted by law, games of skill are carefully considered and excluded from the realm of gambling. This exemption is based on the premise that games of skill necessitate prior knowledge and expertise for successful participation. Numerous court judgments have provided clarity on the classification of games as either skill-based or chance-based.

The Supreme Court of India has played a pivotal role in defining this distinction. According to the court, if a game involves a certain level of skill, it cannot be categorized as gambling. Furthermore, the court specifically ruled that horse racing is a game of skill, not gambling, emphasizing the role of expertise and strategic decision-making in determining race outcomes. These legal precedents have established a framework that acknowledges and protects games of skill from being considered as forms of gambling in the country.

Judicial contribution in its regulation-

The Indian judiciary has been actively engaged in addressing current legal issues, including those related to the regulation of betting and gambling in the country. The Supreme Court’s stance on gambling has evolved over time, initially considering it as detrimental and emphasizing the necessity of a law to eradicate it for the public interest. However, the court has transitioned to suggesting that the Law Commission examine the possibility of legalizing gambling in India.

In 2017, the Supreme Court expressed the view that the legalization of sports betting should be addressed by the Law Commission. Subsequently, the 276th Law Commission of India Report recommended that Parliament should enact a law to legalize and regulate betting in sports. The report also proposed that gambling records be linked to the Aadhar/PAN Card of operators and participants. It highlighted the findings of the Mudgal Committee and Lodha Commission, which also stressed the importance of legalizing betting in sports while implementing robust safeguards. This indicates a shift in the judicial perspective towards considering the legalization and regulation of certain forms of gambling in India.

Pros of its Legalization-

There have been ongoing calls to legalize betting in India, and proponents of this idea have presented various reasons to support their stance. One of the primary arguments is that the legalization of betting would enable the government to levy taxes, generating additional revenue that could be utilized for the welfare of the citizens. According to a report from the All India Gaming Federation in 2021, the online gaming industry in India has the potential to generate $2 billion by 2023.

Another rationale for legalization is the potential to address issues related to black money and money laundering. Legalizing betting and gambling could create legitimate employment opportunities, and with established regulations, the likelihood of monetary fraud decreases. This move towards legalization is expected to attract foreign tourism, consequently boosting India’s foreign exchange. Currently, a significant portion of the money involved in betting and gambling is used for illegal and criminal purposes. Legalizing these activities would allow the government to regulate the use of such funds, ensuring they are directed towards legal purposes and promoting transparency.

Cons of its Legalization-

The most robust argument against the legalization of betting is rooted in moral considerations. Opponents assert that betting and gambling are ethically incorrect. They argue that these activities contribute to bankruptcy, addiction, loss of livelihood, divorce, crime, corruption, and even suicides in extreme cases. The concern is that legalizing betting would exacerbate these social problems, leading to widespread negative consequences. Due to these potential societal ills, critics argue against the legalization of betting and gambling.

Conclusion-

In conclusion, betting and gambling have been inherent aspects of human life throughout history, making it impractical to completely eliminate them from society. The advent of online platforms has added complexity to the system. Therefore, there is a pressing need to consider legalizing betting and gambling in our nation. As the saying goes, there are two sides to every coin, and it depends on the observer how they perceive each side. Similarly, the legalization of these deep-rooted practices has both advantages and disadvantages.

Advocates argue for legalization, emphasizing the potential benefits, while acknowledging the need for participants to be aware and avoid negative consequences. In December 2021, Ravi Shastri, the former head coach of the India national cricket team, a cricket commentator, and former captain of the Indian Cricket Team, also advocated for the legalization of sports betting in India. It is now a critical time to seriously consider the legalization of betting and gambling, taking into account the potential positive and negative impacts, and to make a decision that is in the best interest of the society.