Legalise gambling and betting on sports to help generate revenue, jobs: Law panel

The Law Commission of India, which submitted its report to law minister Ravi Shankar Prasad, said that as it was not possible to completely prevent these activities, “effective regulation” seemed to be the only viable option.

The Law Commission of India on Thursday recommended that the government turn match fixing and sports fraud into criminal offences while allowing gambling and cricket-related betting as a regulated activity under the direct and indirect tax regimes.

The law panel report also held that regulating betting and gambling activities would “strike at the underworld’s control over the illegal and unregulated gambling industry”.(AFP File/Representative image)

The panel, which submitted its report to law minister Ravi Shankar Prasad, said that as it was not possible to completely prevent these activities, “effective regulation” seemed to be the only viable option. It also held that regulating these activities would “strike at the underworld’s control over the illegal and unregulated gambling industry”.

The legal body, which was asked to examine the framework for enacting a law aimed at legalising cricket-related betting by the Supreme Court in 2016, said it decided to go beyond the apex court’s reference as betting and gambling are “intertwined”.

The commission recommended that various “skill-centric games” be exempted from anti-gambling laws on the lines of horse racing. Asked if this includes cricket, the official said: “We have stated that a board of experts should decide which games should be exempted.”

The commission’s report – ‘Legal Framework: Gambling and Sports Betting, including Cricket in India’ – recommends a number of changes in the law for regulating betting and generating tax revenue from the same. It has also asked the government to modify the foreign direct investment (FDI) policy and forex laws to allow FDI in the casino and online gaming industry. “The Foreign Exchange Management Act-1999 and... the Foreign Direct Investment (FDI) policy may be suitably amended to encourage FDI in the casino/online gaming industry, lawfully permitting technological collaborations, licensing and brand-sharing agreements,” it has said.

The commission stated that allowing FDI would “bring substantial amounts of investment to states that decide to permit casinos, propelling the growth of tourism and hospitality industries”. The spurt of activity in these sectors will also help generate jobs and higher revenue, it added.

“Parliament may also enact a model law for regulating gambling that may be adopted by the states or, in the alternative, Parliament may legislate in the exercise of its powers under articles 249 or 252 of the Constitution,” it said.

The commission has also recommended linking the Aadhaar or PAN card of individuals involved in betting and gambling, besides making the transactions cashless, to regulate illegal activities such as money laundering.

Significantly, the commission recommended that gambling be classified on the basis of the stakes involved, with the government regulator deciding how much money people from “lower-income groups” can put on stake. High stakes should only be allowed for people who can afford it, it said.