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Recently, the Law Commission of India has in its 276th Report dated 5th July, 2018 made recommendations for legalization and Regulation of the act of gambling and sports betting in India. The said report was formulated in furtherance of an order of the Supreme Court dated 18.06.2016 that was passed in Board of Control for Cricket in India v. Cricket Association of Bihar and Ors (2016(8)SCC 535), where the Apex Court required the Law Commission of India to mandate the legality of gambling and betting in India.

According to Section 65B(15) of the Finance Act, 2017,  gambling or betting is defined as putting on stake something of value, particularly money with consciousness of risk and hope of gain on the outcome of game or a contest, whose result may be determined my chance or accident or on the likelihood of  anything occurring  or not occurring.

With the emergence of online gambling it has become rampant worldwide and has deeply penetrated into the Indian system. Therefore as per the Law Commission of India, it has become more important that gambling and betting is legalized in India. This would help to promote transparency and public welfare and also to detect frauds and money-laundering in the country.

For the purpose of enacting the law to govern and regulate gambling and betting in sports in India, it may be necessary to elucidate what activities would fall under the ambit of gambling and betting.

The Law Commission has made certain important recommendations listed below:

To design separate law, investigating agency and courts to deal with betting and match fixing charges.

To enact a model law by Parliament to regulate gambling that may be adopted by states in exercise of its powers under Article 249 or 252 of the Indian Constitution.

That betting and gambling transactions should be made cashless, i.e. only through electronic means such as credit cards, debit cards, online banking, etc.

To prescribe restrictions for the purpose of fixing the amount that   would be allowed for betting while using electronic facilities like debit cards, credit cards, online banking etc.

Further, these transactions should also be linked with the operator’s as well as of the participant’s PAN/AADHAR card to ensure transparency in these transactions.

It has also proposed for a restriction on persons below the age of 18 years and those who are below poverty line who may not be eligible to undertake such activities.

To debar certain sections of society such as minors, people from poor backgrounds etc. from being exploited by the possible ill-effects of such activities.

That income derived from such activities are made taxable under the Income Tax Act, 1961 as amended thereof, the Goods and Services Tax Act, 2017 as amended thereof,

To allow foreign direct investment (FDI) in this industry and regulate such FDI to prevent money laundering. It further held that the FDI as well as Foreign Exchange Management Act, 1999 may be suitably amended through encouraged FDI in the casinos / online gaming industry lawfully permitting technological collaborations, licensing and brand sharing agreements, etc.

To amend the Indian Contract Act, 1872 to allow wagering as lawful.

To compulsory ensure that the websites advertising gambling do not display objectionable or pornographic content on their portals / platforms.

To mandatorily display information regarding the risks involved in gambling / betting and to warn gamblers that the portal is not responsible for any risks taken by the gambler.

To amend National Sports Development Code of India, 2011 which aims at preventing betting and gambling in sports or any other code applicable from time to time in order to create an exception for the same if betting and gambling are to be regulated.

To make match- fixing and sports frauds as criminal offences with severe punishments.

To lay down safeguards for casinos inter alia for employees of casinos, minors, maintenance of accounts, audit in order to prevent ‘problem gambling’ and ‘gambling by minor’.

The Law Commission of India has referred to a Supreme Court case of M/s B.R Enterprises v. State of U.P and Ors. (AIR 1999 SC 1867), where the Apex Court has held that gambling is a not a trade within the meaning of Article (19) (1) (g) or Article 301 of the Constitution of India. Therefore, it is not constitutionally protected in India.

According to a few experts, only Government – licensed operators should be allowed to undertake gambling and betting activities in India, so that such practices are regulated in a better and effective manner by the Government of India.

As gambling and betting has become an integral part of the Indian society and as such, It would be impossible to stop such activities then the Law Commission of India has recommended legalization of gambling deeply rooted in Indian society and may further become difficult to cease such operations, therefore, the Law Commission of India has made the aforesaid recommendations to rather legalize and regulate the same in an effective manner.

 

Harini Daliparthy,

Senior Legal Associate

with

Shubham Mongia

Law College Dehradun, Uttaranchal University

Intern,

The Indian Lawyer

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