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Sports betting

Gambling Act is archaic, needs to be amended


A FICCI study on regularising sports betting provides vital pointers on how the fixing scrouge can be contained.

Betting in sports has always met with social disapproval and comes under the scanner only in the wake of high profile scandals. However, betting in sports has been a social constant to the extent that some of the laws of the game, like that in cricket, owe their allegiance to the need for settling bets amongst punters.

There are three approaches which governments worldwide have adopted towards sports betting. The first is to prohibit it completely. The second is to accept it as an inevitable activity and therefore seek to regulate it. The third approach is to encourage this activity as a means of generating revenue as in the case with Las Vegas.

The first approach of prohibiting it has clearly not worked with the Indian betting market estimated to be worth Rs 300, 000 crore. Hence it is time the government looked at the second approach of regulating this activity to earn revenue. If the winnings on sports betting are moderately taxed at 20 per cent of the profits the government would be looking at getting approximately Rs 12, 000-Rs 20, 000 crore as revenue.

In a survey conducted by FICCI a majority of the respondents said they were aware that sports betting happened and considered regulation to be the way forward. They felt regulation would actually help in weeding out match-fixing while bringing in revenue to sports.

Indian laws are archaic and were meant to deal with betting in its physical sense. With the advent of technology, the authorities are struggling to apply these laws to betting over remote means of communication. Technology has shrunk the world and it has now become extremely difficult to prohibit or prosecute people who are placing their bets through these means.
Even though it is a state subject, as per constitutional entries the central government could regulate sports betting by three methods: amending the Public Gambling Act 1867 to allow authorised gambling, regulate online gambling under provisions of Information Technology Act or regulate sports betting as an activity having implications on inter-state trade.
To regulate sports betting, the government would have to set up a central body like the gambling commission of the United Kingdom and the regulation would have to consider distribution of power and revenue amongst the centre and the states.

The government will also have to determine the rate of tax and whom such a tax burden should be put on - the betting operators or on the punters placing the bets.

During discussions in a FICCI conference an understanding was projected that sports betting cannot stop match/spot-fixing totally. However it can serve as a tool to curb such practice by monitoring betting patterns. Detecting such on-field activities otherwise is almost impossible even for experts. If an untoward activity is suspected in an event, people involved in the event can be warned and information can be sought from them to construct an investigation. The proactive approach of warning the players may actually prevent the fix and the reactive approach of investigation would help in bringing the perpetrators to justice. The other problem of gambling addiction can be addressed by having a requirement on the operators to see the bank statements of a person before taking a bet. Underage betting under the regulation would be strictly prohibited with strict sanctions ranging from fines to cancellation of licence and imprisonment. To ensure sport federations too benefit financially, a sports levy/cess could be placed on the bets. To restrict the activity of sports betting an annual list of events on which bets could be placed could also be formed which would include sporting events other than cricket. This would help in giving impetus to other sports as viewership does get affected positively because of the betting industry.

(The author is a sports law expert and has facilitated the drafting of the knowledge paper on regulating sports betting for FICCI. This material is being studied by the Union sports ministry as it prepares a framework to legalise the activity. He spoke to V Narayan Swamy)

Reader's opinion (1)

Ganesh Babu N RMay 26th, 2013 at 00:30 AM

TN Govt banned sale of lottery, because it was spoiling the families. If you legislate and legalize betting, how can you justify ban on lottery business? Half the people dont want to work, because we give free rice, tv, etc. Remaining half are loitering masquerading as brokers. Birth of betting indu

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