Right bet: Govt should accept Law Commission's views on regulated gambling

The Law Commission of India (LCI) has recommended regulated betting and gambling activities across all sports to “effectively curb the menace of black-money generation through illegal gambling”. The commission, which prepared its report under a Supreme Court directive, gave its suggestions on how betting and gambling must be regulated if the Centre and states feel compelled to legalise them. Regulation, it said, would empower the government to identify and prevent instances of gambling by minors and “problem-gamblers”. The commission has also suggested a three-pronged strategy — reforming the existing gambling (lottery, horse racing) market, regulating gambling and introducing stringent and overarching regulations.

The focus now shifts to the governments at the Centre and states because they will have to take a call on bringing in legislation to enable regulation of betting and gambling activities. While this is a state subject and states can make their own laws, Parliament, too, can enact a model Act. In doing so, policymakers will have to weigh the political ramifications of allowing betting. It is true that betting and gambling is a widely stigmatised activity and a Congress party spokesperson has already accused the government of wanting to convert every “paan” shop in the country into a “gambling den”. Often the poor bear the harshest consequences of the downsides of gambling since they do not have the wherewithal to take the shock. To some extent, the commission has tried to address these concerns by suggesting two categories of gambling — “proper” vs “small”. People belonging to lower-income groups will not be allowed to participate in high-stakes gambling. There is a third category as well — those who receive subsidies from the government — and such people will be debarred from gambling. The report has suggested other safeguards as well, including prominent display of the risks involved as well as curbs on gambling by minors.

There is no need for the government to be defensive about legalising betting because there are many upsides. To begin with, it is time to accept that banning betting is grossly counter-productive. For one, it is nearly impossible to implement effectively. Secondly, a ban only drives the activity underground, where it is managed by criminals. In the process, it also leads to the generation of black money. Regulating it formally will instead make the whole process transparent — with the use of Aadhaar/Permanent Account Numbers — apart from generating a healthy stream of revenue for the exchequer and making the whole ecosystem safe for the stakeholders. The report has some good suggestions such as licensing of operators, cap on the amount that one can legally gamble, as well as on the number of transactions an individual can make in a specific time period. The commission has recommended taxation of any income derived from gambling and betting, as well as allowing foreign direct investment in states that decide to permit casinos. A good way to blunt criticism against legalising gambling is to make sure that part of the lottery proceeds will be mandatorily used to fund the education of students from lower- and middle-income households. This is what the Helping Outstanding Pupils Educationally (HOPE) fellowships in Georgia, United States, have done.