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Boon or bane?

It may be time for India to embrace legal gambling, with all its downsides and benefits

Boon or bane?
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Anurag Thakur, Minister of State for Finance, who is also a former BCCI chief, has added a sense of urgency to the debate on whether to make betting legal in India by suggesting the other day that such a move would help curb match-fixing, which is becoming a bane for sports. The minister's suggestion came as part of his response to suggestions made during a conference of ICICI Securities, where various participants raised the issue both as a source of revenue for the government as well as an effective tool against manipulation of matches.

It is estimated that bets worth Rs 1,300 crore are placed on every one day international (ODI) cricket match that the Indian team plays. These estimates cite an example from 2015 when the Indian cricket team played 21 ODI matches. This would mean a total betting amount of about Rs 27,300 crore.

A Federation of Indian Chamber of Commerce and Industry (FICCI) report of 2013 put the size of India's underground betting market size at Rs 3 lakh-crore and lamented that India was losing colossal amounts that should have been available for development, only if betting was regulated and taxed.

This is the most compulsive argument in favour of legalising betting, which is now engaging the active consideration of the Government. The Law Commission of India has produced a report titled 'Legal Framework: Gambling and Sports Betting Including Cricket in India', on a recommendation from the Supreme Court.

The report was put in the public domain to elicit views from the public as well as stakeholders and an overwhelming majority have favoured legalising betting. The FICCI itself has hailed the findings of the report, which concluded that betting and gambling are closely intertwined and there is a black world of gambling that is engaging in all kinds of illegal activities.

FICCI has been arguing that regulation will not only restrict the illegal activities but generate revenue for the Government to invest in social sectors, apart from the sports sector. The money earned from betting can be used to augment infrastructure for other sports and tourist facilities. It further pointed out, with examples of the United Kingdom and China, that globally sports betting and gambling are utilised to generate funds for good causes and promotion of sports.

A most important reason for regulation is that the lack of legal basis does not prevent betting and gambling from taking place. If it is unstoppable, then why not regulate it so that at least some of the 'black' activities can be curbed and at the same time betting turnovers be subjected to taxation. The tax realisation could be as big or close to the size of the Reserve Bank of India's transfer to the Government by way of dividend and surplus.

A trade-off between morality and revenue is integral to any debate on the subject. India has been culturally opposed to gambling even though it existed in society since ancient times. There are several textual references to betting in the scriptures, which also refer to the need for regulation so that abuses can be limited.

References can also be made to Mahabharat, where the strife between Pandavas and Kauravas originated from a gambling game. It involved the most repugnant act in terms of morality, not just about the act of betting, but the Pandavas putting their wife as a stake, with disastrous results for both sides. Betting's potential for self-destruction is, therefore, well-argued.

Over time, the forms and ways of betting and gambling have changed. The 'skill' and 'chance' components in the new-generation betting make a judgement of morality an indeed difficult question. There are also accepted and legalised betting, such as horse-racing, further complicating the argument.

The revenue-versus-morality argument is also muddled by the generally accepted practice of slapping high tax rates on alcohol consumption and using the proceeds from it as a primary source of revenue. A state like Kerala generates about 20 per cent of its revenue from liquor sales. The state accounts for the highest per capita consumption of liquor in India.

Today, people gamble and bet over phone, SMS and the Internet. Easy access to Internet betting sites, having a global presence has made regulation of betting a serious challenge. Telecommunication technology and global bank transfers have linked host networks, but the merging of the lines between skill and chance has made application of rules really tough.

No specific central laws are governing online gambling in India. Sikkim and Nagaland are the only states that expressly permit online gambling. However, there are also states such as Telangana which follow a policy of zero-tolerance towards gambling, both online and offline.

It is widely recognised that a total ban on gambling is neither feasible nor desirable as it creates a vicious circle, which causes substantial monetary loss to the economy. Regulated gambling is, therefore, an idea whose time has come.

Views expressed are personal

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