But the Commission is treading cautiously as the issue involves morality, ethics and prevailing laws of the country.
The law panel was asked by the Supreme Court last year to examine whether betting on cricket can be allowed.
While examining the issue, it considered the possibility of widening the scope to include betting in other sports as it is taking place through Internet and is tough to check.
With a strong regulation, a new law can help the government earn crores of rupees as revenue.
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"Betting has ruined families, therefore, issues of ethics and morality are involved. Moreover, if a new law is prepared, it would require changing come of the existing statutes," a functionary explained.
Commission chairman Justice BS Chauhan (Retd) was in London last month to attend a conference on gambling, lottery and betting.
He had asked regulators of countries where gambling and betting are legal to send inputs for the Commission to study.