Legalise Gambling? Morality v. Revenue

By | September 16, 2020
Legalise Gambling? Morality v. Revenue

Last Updated on by Admin LB

In order to legalise gambling, a vigorous legal framework is needed which will govern the gaming industry and ensure that people don’t fall for excessive gambling.

Introduction – Legalise Gambling

The constant trade-off between morality and revenue has been the main issue of any debate related to gambling. Gambling has been practised throughout human civilisation. Over the years, gambling practices have evolved and have taken different forms depending on time and geography. Risk, consideration and prize constitute the term Gambling. Despite being frowned upon by morals and religious perspective, laws have failed to control and regulate such practices.

Ancient India and Gambling

The morality of such activities has been questioned every now and then, making a reference to the famous and sacred Mahabharata where there was friction between Kauravas and Pandavas that originated from a gambling game. The judgement of morality in this incident was unacceptable as it was not about the act of betting alone, but the Pandavas betting their wife, with catastrophic results at both ends. This action was highly immoral and it violated human rights on various many levels.

Religions around the world have warned us about the dangers of gambling, the Bible says “You cannot serve both God and money”, clearly indicating that gambling is a sin. Even otherwise, every person has known the cons of excessive gambling where an individual loses the sense of social well-being. No wonder why the mortality of gambling is still being argued.

Indian Constitution and Gambling

In September 1949, the motion to add Entry-45 (Entry-34 presently) which deals with gambling and betting under List-II (State List) of the Seventh Schedule was raised in the Constituent Assembly. Majority of the members were of the view that gambling and betting activities are destructive in nature, are criminal and should be strictly prohibited. Such views were based on the duly formed respect of Mahatma Gandhi’s lofty ideals and the lessons from Mahabharata.

However, Dr B.R. Ambedkar[1] was of the view that omitting this entry from the Constitution doesn’t mean the absence of such practices from the country but it only means a lack of constitutional control over such activities. Therefore, the assembly added Entry 45 (now Entry 34) to the State list to promote the states to make legislation either to ban betting or gambling or to regulate it, according to the socio-economic requirements of the State. This stance provided the scope to accommodate different notions of morality prevailing in various States.

How to determine gambling? – Test of Game of Chance and Game of Skills

In recent times, the meaning and forms of gambling and betting have changed. To determine the legality of gambling in many nations, the test of Game of Chance and Game of Skill is applied to check whether the game with betting is legal. Around the globe, the term ‘gaming’ in this reference is generally used when the activity is legal whereas the term ‘gambling’ is used when the activity is not explicitly permitted by law.

The two components, ‘chance’ and ‘skill’ are not always noticeably different. Oftentimes, games involve both elements of chance and skill. Therefore, the game of skill and game of chance is determined by the dominant component, for example, the game of skills will generally include knowledge, technical expertise, strategy, developed abilities as present in Rummy (card game), pool, and horse racing.

Legal Perspective

In India, as per the guidelines of the Supreme Court of India laid down in State of Bombay v. RMD Chamarbaugwala 1957[2], the lawfulness of the game is to be judged on the extent of skill involved in it. Similarly, according to Gaussian Network Pvt. Ltd. v. Monica Lakhanpal 2012 by Delhi District Court[3], the game of skill with stakes would not amount to gambling, one such game is Horse Racing in India with stakes involved. As of now, online gaming has only been legalised in Sikkim and Nagaland in India.

Recently, in the case of D. Siluvai Venance v. State[4], the Madras High Court on July 24, 2020, stressed upon the urgent need to control and regulate online games such as Rummy, Nap, Poker, Bridge, etc. which is enticing the young and unemployed to bet their money. The bench hopes that the state shall take into consideration the present alarming situation and pass suitable legislation in this regard. Further, it clarified that it is not against virtual games but is “anguished” that there is no regulatory framework to monitor the legal gaming activities.

Scope of Regulating Gambling

Gambling is one of the wide-scale activities occurring across the globe that could generate a major chunk of revenue for the government. The black betting market in India is worth Rs. 9.9 Lakh crore a year. The gambling amount is estimated to be Rs.1,300 crore in One Day International (ODI) cricket event according to Doha- based International Centre for sports security. Every year there are various cricket tournaments played by the Indian Team.

As per a report[5] of the Federation of Indian Chamber of Commerce and Industry (FICCI) in 2013, calculated the size of India’s black betting market at Rs 3 lakh-crores and expressed discontent that India could have made this enormous amounts available for development if only betting was regulated and taxed by the government for a win-win situation.

Because of these compelling suggestions and arguments, the Supreme Court recommended the Law Commission to produce a report to look into the possibility of a gambling framework in India. The report titled ‘Legal Framework: Gambling and Sports Betting Including Cricket in India[6], was presented in July 2018. The report was put in the public domain to obtain views from stakeholders and the general public. With progressive society and open-mindedness, legalising betting was favoured by a very large majority and the findings of the report were welcomed by many sports organisations.

Such regulations are important to prevent illegal activities and to generate revenue to develop various sectors of the economy. Legalising betting will save crores of Indian money which had been bleeding out via illegal online platforms for international sports betting. This way the country will generate revenue to develop the economy. Such revenues can be allocated to improving the infrastructure for education, tourism, and sports. Some countries across the globe with legal betting, such as England have observed a huge difference in revenue.

Lack of laws has not prevented betting and gambling from taking place. Regulation could curb the graph of black activities, if it is not possible to stop such activities then it is better to legalise and tax them. This way the government is authorised to demand taxes and validate the income of people.

In the times when the government has already tried to reduce the black money in the market through demonetization, then a similar course of action should be taken for betting in India.

Way Forward

A vigorous legal framework is needed which will govern the gaming industry and ensure that people don’t fall for excessive gambling. Awareness and education can avoid addiction to gambling. Habitual gamblers, minors and vulnerable sections should not be given access to gaming facilities. As per the person’s financial background, limitations should be imposed on the amounts that can be wagered.

With that said, it is not very far when India will have official betting websites and applications to perform white betting activities for sports. The application of ‘chance’ and ‘skill’, being a tough judgement, will be simplified when we see gambling being regulated.

Pratiti Shah is a Final Year law student at NMIMS Kirit P. Mehta School of Law, Mumbai. Views are personal.

[1] Constituent Assembly of India Debates (Proceedings) – Volume IX Friday, the 2nd September 1949, Available Here

[2] State of Bombay v. RMD Chamarbaugwala (AIR 1957 SC 699)

[3] Gaussian Network Pvt. Ltd. v. Monica Lakhanpal  Suit No 32 of 2012

[4] D Siluvai Venance v State pronounced on 24 July 2020 (Crl OP (MD) No. 6568 of 2020)

[5] Regulating Sports and Betting  II, Available Here

[6] Law Commission Of India Report No. 276 Legal Framework: Gambling And Sports Betting Including In Cricket In India, Law Commission Of India, Report No. 276, July 2018, Available Here

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