A Supreme Court judge recently told an Ahmedabad audience that if he were a dictator (perish the thought!) he would introduce Mahabharata in Class I. One of the morals of the epic is that gambling is evil, a truism affirmed by hymn XXXIV of the Rigveda and verse 221 of Manusmriti. The ancient law-giver wanted kings to ban betting.
However, modern states have learned from experience over centuries that prohibition of this human weakness will only drive it underground like hooch or satta and breed mafia. Several countries have recently legalised trade even in narcotics, tired of waging costly and futile wars on drugs.
The total market in running lotteries in India, online and land-based, is said to be in excess of $60 billion, though statistics in this area are itself a matter of gamble. The trade is grudgingly recognised as an item of commerce, reserved for the Centre in the Union List of the Constitution. Intriguingly, betting and gambling are state subjects. All these trades, booming on the edge of ethics, are great sources of revenue since they can be taxed. They do go against the constitutional spirit, but governments are run by the "art of the possible".
There has been plenty of litigation over state-run lotteries and in recent weeks the Supreme Court passed dozens of orders to impose a ceasefire among states. Each state wants to get the whole revenue from its own lottery and would like to prevent others from entering its territory. But this country has adopted a federal constitution and freedom of trade within the territory is an assured right under Article 301 of the Constitution. Owing to relentless skirmishes over lotteries crossing state borders and litigation, the centre passed the Lotteries Regulation Act in 1998.
That law allowing state governments to ban lotteries of other states was immediately challenged by agents and some states. The Supreme Court in its judgment in B R Enterprises vs State of Uttar Pradesh (1999) upheld the law, but read down certain provisions. It ruled that only those states that do not operate their own lotteries can prevent the entry of other state lotteries. The court called the trade "inherently vicious and pernicious, condemned by all civil societies" like selling alcohol. (Betting on horses is a "game of chance", according to the court, thus absolving it from venality).
Still the squabbles over lotteries have not ended. Some questions about the Act are yet to be decided by the Supreme Court. States continue to raise legal pickets against each other. Sikkim had moved the court in 2002 against the Punjab government, which had tried to stop online lottery of the hill state. It had also challenged the validity of the Punjab Lottery Rules as illegal. However, the situation has changed and last fortnight, Sikkim withdrew the petition. The court allowed Sikkim to approach it again in case Punjab prevented the Sikkim online lottery. Another petition moved by Nagaland against the central government in 2003 was also withdrawn last fortnight.
Kerala, which was the first state to launch its own lottery to increase its revenue in 1967, has been a chronic litigant ever since. Lottery ranks only below abkari contracts in exploiting people's vices in that state. The only difference is that lottery is run behind the facade of philanthropic activities. All ruling fronts have constantly prevented other states from entering the lottery trade and filed criminal cases against distributing agencies that violate the bar.
In the latest batch of orders, the Supreme Court noted that there are several petitions challenging the central law and, therefore, all criminal cases against agents in Kerala have to be suspended till those main cases are disposed of. That, indeed, would take quite some time, considering the backlog in the court. Meanwhile, lottery has become another political issue between the warring political fronts in that state.
In one batch of cases, the Sikkim government had challenged the Karnataka ban on online lotteries of other states. However, Karnataka told the court that it is now a "lottery-free state" and, therefore, the issue need not be agitated. If the government changes its policy, Sikkim was allowed to move the court.
In another batch of cases from Punjab, the petitioners were directed to move the high court there. All contempt petitions and other applications were thus disposed of, though the issues raised in the main petitions have not been settled.
Bhutan, which wanted to raise money from sale of lottery in India to finance a hydroelectric project there, has bowed out and, therefore, the international angle to the lottery wars has subsided. However, the laws currently can control only state-run lotteries. There are forms of gambling without borders that are available in plenty online. If governments could levy "tax on stupidity", as a wit described lottery, they could earn more than what could be recovered from black money cached abroad.
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