SC appointed black money SIT suggests stricter anti-betting regulations, Karnataka to bring new law against betting soon

There were two important updates concerning the gaming industry yesterday. Both measures can be seen as regressive measures for the gaming industry and may result in adverse regulations and more penalties for illegal betting and gambling.

SIT suggests legislative measures to curb cricket betting

The Supreme Court appointed SIT which is looking at ways to curb the the circulation of black money in the country suggested a rather regressive measure of imposing stricter penalties on cricket betting in its third report. The SIT headed by retired Supreme Court judge MB Shah stated that the government should consider bringing in appropriate legislative and regulatory changes to curb the menace of black money. The panel also added that new measures would deter citizens from indulging in illegal cricket betting.

As per media articles, the SIT report seems to have said the following: “It is apparent that illegal activity of cricket betting requires to be controlled by some provisions which are deterrent to all the concerned [sic]… considering the fact that large amount of black money is generated and used in this sector, it is suggested that some appropriate legislative directions or rules or regulations are required to be put in place to curb the menace of such betting…”

The stand taken by the SIT in its third report is surprising since the panel in its third interim report submitted in May 2015 endorsed estimates on illegal betting given in FICCI and KPMG reports (which supported legalising sports betting and gambling). This suggestion by the SIT is indeed a step in the wrong direction. Historical  evidence shows that prohibition of widely accepted activities (such as gambling, liquor or tobacco consumption) would only result in a boom for an underground economy and mushrooming of criminal elements. One hopes that the government focuses on legalising and taxing betting to reduce the flow of black money instead of accepting SIT’s suggestions.

Karnataka to bring a new law to curb illegal betting

In a related development, the Karnataka government announced that it is planning to introduce a new law to impose stricter penalties on illegal cricket betting and other gambling activities, possibly in the next assembly session. State Home Minister KJ George while replying to a question raised by opposition members stated that the state will introduce a new law to curb the menace of betting. George added that a new legislation to impose stricter penalties on illegal betting activities has become imperative since cricket betting rackets are ruining lakhs of families in the state.

It must be noted that some provisions in the Karnataka Police Act, 1963 currently imposes criminal sanctions for illegal gambling activities and running or participating in a ‘common gaming house’. The provisions of the Police Act are largely similar to the Central Public Gambling Act of 1867 and several other state gaming legislations. It remains to be seen whether the new law on betting amends the Police Act or brings a special legislation on the subject. It would also be interesting to see if the government also includes online betting and gambling within the ambit of the proposed law.