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Gaming

Nepal cabinet relaxes casino location requirements

The Nepal government has relaxed location requirements for setting up casinos and electronic gaming operations along the international border.

According to local media reports, the Nepalese cabinet, in its meeting on 27th June took the decision to amend a provision in the Casino Regulation, 2013 to allow casinos and electronic gaming operations up to a distance of 3 kilometres from the international border instead of the existing restriction of not allowing casinos within 5 kilometres from the international border.

The decision was taken after a number of operators proposing to start operations in Kakarbhitta, Biratnagar, Birgunj, Nepalgunj and Dhangadhi areas had raised concern over the existing restrictions, according to Tourism Ministry officials.

“The government has shown flexibility by allowing casinos to operate at a distance of up to 3 km from international borders in the context of the upcoming Visit Nepal Year 2020 campaign,” Ghanshyam Upadhyaya, spokesperson for the tourism ministry told Kathmandu Post.

The government is also working to introduce a new framework to regulate the casino industry which would be embedded within the proposed new Tourism Bill. The move is expected to streamline the industry and encourage new global players to enter Nepal amid expectations of a boom in the gaming industry.

The government has been working on the draft for the past one year but according to latest reports, the legislation is in the final stages of preparation and could be introduced in the country’s parliament soon.

Currently, Nepal’s casinos are operating under the country’s Casino Regulation, 2013. However, three casino operators had declined to pay license fees and royalties under the regulation and instead approached the Supreme Court, which granted them interim relief to operate without paying the statutory fees.

However, according to the Tourism Department, out of the three casinos who filed the petition in the Supreme Court, one of them, the Malla Hotel has withdrawn the petition, paid its dues and the casino is currently operated by Sri Lanka’s Bally’s Group. The other two casinos who challenged the government have shut shop.

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Gaming

Essel Group backed Jalesh Cruises to start cruise line services with casino onboard

Essel Group-backed Zen Cruises Private Limited has confirmed that they would be starting their first premium brand of leisure cruises with  a fully equipped casino under the brand name ‘Jalesh Cruises’ from April 2019 onwards.

The first vessel of the cruise liner, the 2,000-seater, Karnika, will sail from Mumbai to Goa in April this year, with numerous other locations and cruise ships set to be added subsequently. As per the company’s claim, the multi-destination cruise line will offer entertainment shows, adventure activities and exotic authentic cuisines to the passengers.

As per the Jalesh Cruises website, a casino will be available for use for patrons on board the Karnika vessel. The page on casino on the Jalesh Cruises website currently states the following:

Roll the dice and spend your night with the lady luck and enjoy a flutter at Players Bar & Casino. Located on Deck 8, the Royal Casino will spoil you for choices. From most popular games like Blackjack, Poker, Scratch-off and Slot Machine Games to some amazing table games, this place is sure to rise up your excitement.

While you are busy praying for your luck, we are here to quench your thirst with some sparkling spirits. Get ready to experience a slice of Vegas right at sea – with thousands of square feet of lights, action, slots, and tables.

Notably, Essel Group Chairman and Rajya Sabha MP Subhash Chandra had played an important role in forming the India Cruise Lines Association (INCLA) last year. INCLA had petitioned Union Minister for Shipping, Road Transport, Highways, River Development and Ganga Rejuvenation Nitin Gadkari and the Prime Minister’s Office (PMO) to allow gambling and casinos onboard cruise vessels and permit Foreign Direct Investment (FDI) in the casino sector.

The association in its petition to the PMO had indicated that currently casino operations can be conducted on cruise vessels beyond 12/200 nautical miles from the Indian coastline, i.e. outside the Indian territorial waters and had urged the government to allow casinos to operate in cruise vessels even within the Indian territorial waters.

It remains unclear whether Jalesh Cruises will be offering casino services to its customers within the Indian territorial waters or if casino services will be made available only after the ship crosses the Indian coastline. The legality of casinos operating in Indian cruise ships with (primarily) Indian customers outside Indian territorial waters remains unclear.

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Legal & Regulatory

Shashi Tharoor’s Bill to regulate online sports gaming deserves consideration by the government

Congress Member of Parliament (MP) Shashi Tharoor introduced a private member’s bill, namely, the Sports (Online Gaming & Prevention of Fraud) Bill, 2018 in the Lok Sabha on 28 December 2018.

The Bill, largely based on the Law Commission of India’s recommendations in its 276th Report, has been introduced with the purpose of dealing with two separate but connected topics that the government has made little attempt to focus on:

(i) penalising match-fixing and manipulation of domestic and international sporting events; and

(ii) creating an over-arching national regulatory and licensing framework for overseeing and permitting online sports gaming in the country, subject to numerous safeguards and guidelines.

The first part of the Bill deals with creating an offence of ‘sports fraud’ which includes manipulation of the result of a domestic or international sporting event in exchange for illegal gratification, disclosure of inside information, misrepresentation of a participant’s age, etc.

The second part of the Bill deals with the creation of a seven-member national-level Online Sports Gaming Commission that is tasked with regulating and licensing all online sports gaming in the country, coordinating with law enforcement agencies to crack down on illegal online sports betting and monitoring suspicious betting patterns with a view to identifying and tracking manipulation of sports games.

Online sports gaming has been defined in the Bill to include prediction on the result of a sporting event and placing a bet on the whole or part of the outcome of a sporting event through a telecommunication device. Importantly, the Online Sports Gaming Commission will be empowered under the proposed legislation to issue rules to impose various restrictions on betting on sports matches to ensure that people are able to engage in sports gaming in a limited manner.

The kind of restrictions that can be imposed by the commission includes limiting access to online sports gaming websites to people of certain age groups like minors, the fees to be charged for betting, restriction on giving credit facilities for betting, etc. The Bill also makes a provision empowering the central government to allow, by notification, Foreign Direct Investment (FDI) including foreign technological collaboration in licensed Online Sports Gaming websites. Both the portions of the proposed legislation, the first one attempting to curb the menace of cheating in sport and the second one to regulate and control online sports betting in the country try to fix important lacunae in the law. The issue of bringing a strong law to criminalise match-fixing has been put on the back-burner by the current government.

The UPA government, in 2013, tried to draft legislation to prevent sporting fraud, which however could not make progress due to inter alia, the parliamentary logjam prevailing during the period. Without a specific law dealing with sporting fraud, it is almost impossible to punish sportspersons and others involved in IPL type spot-fixing and cheating scandals. Under the current laws, the provisions that the law enforcement authorities invoke against erring sportspersons and other persons involved in fixing syndicates is cheating under the Indian Penal Code and charges under some state organised crime legislation like Maharashtra Control of Organised Crime Act (MCOCA).

However, it is plausible to argue that the definition of cheating under IPC does not envisage the offence of manipulation of sporting events. Indeed, the same line of argument was noted by Patiala court judge Neena Krishna Bansal in 2015, while discharging cricketers S. Sreesanth and bookmakers accused of fixing IPL matches. Till date, no sportsperson has ever been convicted of fixing or cheating due to the absence of any specific law on the subject. The only punitive action that can be enforced against erring sportspersons is by the sporting association – that of banning that particular person from participating in competitive sports.

Even that action can be scrutinized and challenged in court and can be overturned on procedural and other grounds, as was successfully done by former Indian cricket captain Mohammad Azharuddin. Consequently, there is no effective deterrent today to prevent cricketers and other sportspersons from brazenly indulging in match manipulation. The attempt to bring strong punitive action against those indulging in fixing is thus a welcome attempt to address the lacunae in present laws. Similarly, the attempt to regulate online sports betting at a federal is a welcome step for a variety of reasons. First, whilst betting and gambling is a state subject under the Constitution, it may be impossible for individual states to regulate activity on the internet, where state and national boundaries often get blurred.

Therefore, it would be best for online sports betting to be regulated by an independent body under a Central law, where operators can be licensed under a specific and stringent set of guidelines, which include placing betting limits, restriction on betting/gambling advertisements, restriction on minors from accessing betting websites etc. Regulation of online sports betting under a central law, while leaving physical forms of betting and gambling for states to legislate is a constitutionally tenable proposition.

Central legislation on online sports betting, while leaving out other forms of gambling, including offline gambling, as proposed by Tharoor, can be done by invoking the parliament’s jurisdiction to legislate on telecommunication and inter-state trade and commerce. Secondly, permitting regulated online sports betting under oversight from a regulatory body makes it possible to monitor betting trends, including suspicious trends. For instance, if there has been heavy betting on a particular improbable outcome in a game, and if that improbable outcome materialises, it may be possible to trace and investigate the source of the bet and check whether the bettor had any inside information or connections with any sportsperson or support staff.

Thirdly, the laws penalising sports betting, particularly online sports betting are not clear. Most state gaming legislation are governed by archaic Gaming Acts that neither envisages online gambling or betting. Further, games of skill are exempted from the definition of gambling and betting (in most states), and a 1996 Supreme Court judgment stated that horse racing, being a game of skill, betting or wagering on it cannot be a criminal offence.

A similar analogy can be drawn to betting on cricket or other sports, which are also games of skill. Indeed, such observations have been made by the district judge in the Sreesanth case mentioned above, while noting that betting on cricket, being a game of skill does not amount to any offence. Thus, when an activity like sports betting continues unabated and no strong punitive action is possible, it would be worthwhile to legalise and tax the activity and allow the state to earn revenues, rather than leaving the business in the hands of underworld syndicates who are known to launder and channelise profits from cricket betting to other nefarious criminal and terror-related activities.

Studies suggest that the size of the sports betting market in India is anywhere between US$60-130 billion. Even by conservative estimates, at least Rs. 15,000-20,000 crores can be earned by the government by way of taxes. Allowing the sports gaming industry to be carried out in a streamlined manner also opens up avenues for employment and technological innovation. While all the issues of match-fixing and sports betting are worth legislating upon, it is well known that private member’s bill rarely get discussed extensively and it is even rarer for such bills to pass in both houses of parliament.

Tharoor therefore in a series of tweets put out after introducing the Bill, noted that his aim was to put the legislation out in the public domain for discussion and that it was incumbent upon the government to facilitate their enactment. One hopes that the government takes note of Tharoor’s plea and moves in the direction of introducing legislation to prevent match-fixing and regulating sports betting.

Note: The article was first published in The Statesman on 10th January, 2019 and is available here.

Categories
Legal & Regulatory

Shashi Tharoor introduces Sports (Online Gaming & Prevention of Fraud) Bill; read the salient features of the proposed law

As scheduled, senior Congress MP Dr. Shashi Tharoor introduced the Sports (Online Gaming & Prevention of Fraud) Bill, 2018 in the Lok Sabha yesterday.

The Bill, aimed to establish an effective regime for maintaining the integrity of sports and regulation of online sports gaming, deals with two separate but connected issues: (i) penalising match-fixing and manipulation of domestic and international sporting events; and (ii) creating an over-arching national regulatory and licensing framework for overseeing and permitting online sports gaming in the country, subject to numerous safeguards and guidelines.

The first part of the Bill deals with creating an offence of ‘sports fraud’ which includes manipulation of the result of a domestic or international sporting event in exchange of an illegal gratification, disclosure of inside information, misrepresentation of a sports participants age etc.

The second part of the Bill deals with the creation of a seven-member national-level Online Sports Gaming Commission that is tasked with regulating and licensing all online sports gaming in the country, coordinating with law enforcement agencies to crackdown on illegal online sports betting and monitoring suspicious betting patterns with a view to identifying and tracking manipulation of sports games.

Online sports gaming has been defined in the Bill to include prediction on the result of a sporting event and placing a bet on the whole or part of the outcome of a sporting event through a telecommunication device.

Importantly, the Online Sports Gaming Commission is empowered under the proposed legislation to issue rules to impose various restrictions on betting on sports matches to ensure that people are able to engage in sports gaming in a limited manner.

The kind of restrictions that can be imposed by the commission include limiting access to online sports gaming websites to people of certain age groups like minors, the fees to be charged for betting, restriction on giving credit facilities for betting etc.

The Bill also makes a provision empowering the central government to allow, by notification, Foreign Direct Investment (FDI) including foreign technological collaboration in licensed Online Sports Gaming websites.

As expounded by Dr. Tharoor on social networking website Twitter, the Bill (along with three other Bills introduced by him yesterday) are ‘an attempt to expand our freedoms’ and can become a law only if the government of the day agrees to facilitate their enactment in Parliament. Dr. Tharoor, therefore urged the cooperation of the government and Lok Sabha in allowing passage of the Bill introduced by him.

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Gaming Legal & Regulatory

Nepal govt moots new law to attach assets of fugitive casino operators

The Nepal government is mooting new legislative measures that would give it powers to attach the personal properties of casino operators who default in paying royalties and taxes.

As per local media reports, the Nepalese government has drafted a new legislative framework that would govern the casino industry as part of a Federal Tourism Bill that is expected to be tabled in the forthcoming session of the parliament.

The proposed law will give the government sweeping powers to attach the personal properties of casino promoters not just in Nepal, but also seize assets located outside the country, a legal provision that is somewhat similar to the Fugitive Economic Offenders Act passed by the Indian parliament.

In July 2013, the government introduced regulations to have oversight over the casino industry. It decided to get tough as some casinos were not paying taxes and royalties and flouting the rule barring Nepali residents from entering casino premises.

In April 2014, the government decided to shut down all casinos not abiding by the Casino Regulations, 2013 and terminate the licences of those defaulting on royalties. However, some casinos approached the Supreme Court to have the new regulation struck down. Three casinos have been continuing to operate taking advantage of an interim order of the Supreme Court allowing them to remain open.

The new bill has proposed making the hotel liable first. “As the casino licence belongs to the hotel, it should be liable, and accordingly, the new law will define it. If the casino operator fails to clear the dues, the hotel will be liable to pay them first,” a ministry official told Kathmandu Post.

The proposed bill not only allows the government to confiscate the personal property of fugitive casino operators, but also has provisions allowing seizure of their passport and bank accounts. The government can also stop utilities like water and electricity to tax defaulting operators. The draft, however, is not clear whether the measure will also apply to old defaulters.

The proposed law will also mandate that casino operators have to spend at least 2 percent of their profits to uplift society as part of their corporate social responsibility. Additionally, the bill has proposed stringent penalising operators found allowing Nepali residents to gamble or even enter casinos.

“We have held several rounds of discussions on the new law. We plan to consult the private sector and the public regarding the new bill,” said Ghanshyam Upadhyaya, spokesperson for the Tourism Ministry. “The final draft will be sent to the Finance and Law ministries for their approval before submitting it to the Cabinet.”

After the cabinet gives the go-ahead, the bill will be tabled in Parliament. “House committees may hold several rounds of deliberations before the bill is endorsed,” said Upadhyaya.

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Gaming

INCLA petitions PMO demanding amendments in gaming laws to allow casinos in cruise ships

The India Cruise Lines Association (INCLA), backed by Rajya Sabha MP and Essel Group Chairman Subhash Chandra, has approached the Prime Minister’s Office (PMO) demanding several concessions and amendments in existing laws to enable promotion of the cruise shipping and tourism sectors.

INCLA convenor Jurgen Bailom has shared the organisation’s demands to the PMO which include reduction in GST rates applicable on supply of goods and services on board cruise ships, tax holidays for the cruise industry and single window clearances.

Significantly, the trade body has also demanded that amendments be made to the existing entertainment and gambling laws as currently there are certain restrictions on gaming, casino operations, entertainment, etc. on board cruise vessels within the territorial waters of India.

“Currently, these services are provided to the cruise passengers while the cruise ship is beyond 12 / 200 nautical miles from the Indian coastline since these entertainment and gambling laws do not tend to apply beyond 12 / 200 nautical miles. However, while the cruise ship is within the Indian territory, cruise liners are unable to provide gaming, entertainment and casino services to the passengers and meet their expectations,” said a cruise line operator as per a report in DNA newspaper

In August 2018, INCLA had made similar demands to Union Minister for Shipping, Road Transport, Highways, River Development and Ganga Rejuvenation, Nitin Gadkari in a whitepaper presented to him on the sidelines of a Global Cruise Conclave.

INCLA had also demanded that the central government amend the existing Foreign Direct Investment (FDI) policy to allow foreign investment in casinos on cruise vessels.

Interestingly, Chandra’s conglomerate, the Essel Group, has several interests in the gaming and lottery business. Essel Group markets state lotteries under the brand name ‘Playwin’ and also runs online poker and fantasy sports websites.

The business group has in the past also attempted to operate an offshore casino in River Mandovi in Goa under the name ‘Maharajah casino’ but after failing to get a license from the state government for several years, leased its cruise vessel to Haryana politician Gopal Kanda’s GoldenGlobe Hotels.

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Gaming Legal & Regulatory

INCLA urges govt to permit casinos on cruise ships, FDI in gambling

The India Cruise Lines Association (INCLA), a newly formed industry body to lobby for cruise ships has urged the government to allow casinos aboard cruise ship vessels to promote and nurture the shipping industry.

The trade body has further urged the government to relax entertainment and gambling laws for cruise ships and permit foreign direct investment (FDI) in casinos operated on-board a cruise ship. The association also made several other suggestions for reforms in policy, tax and various regulatory laws to ensure a level playing field for the cruise business in India.

INCLA made the recommendations to Union Minister for Shipping, Road Transport, Highways, River Development and Ganga Rejuvenation, Nitin Gadkari in a Global Cruise Conclave held in Mumbai on 30th August. INCLA’s  suggestions were presented in the form of a white paper that was handed over to Gadkari by Rajya Sabha Member of Parliament and Essel Group Chairman Subhash Chandra.

Interestingly, Chandra’s conglomerate, the Essel Group, has interests in the gaming and lottery business. Essel Group markets state lotteries under the brand ‘Playwin’ and also runs online poker and fantasy sports websites.

The business group had also attempted to operate an offshore casino in Goa under the name ‘Maharajah casino’ but failed to get a license from the state government for several years, after which the company in 2017, entered into an agreement to lease the vessel to Haryana politician Gopal Kanda’s GoldenGlobe Hotels. Chandra’s group has now announced that it would be foraying in the cruise business in partnership with an International brand.

Notably, Union Minister Gadkari, one of the senior most BJP leaders in the country, has in the past, opposed the idea of having casinos in India.

“We oppose things like casinos, and I will not give permission for that. People will also not tolerate such things,” Gadkari is quoted as having said in 2016. It remains to be seen if Gadkari changes his stand on the utility of casinos in light of the white paper presented by INCLA, given that he has promised to promote and support the shipping industry.

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Gaming

Nepal govt to introduce provisions to regulate casinos in Tourism Bill

The Nepal government has decided not to go ahead with a June 2018 tourism department proposal to bring a separate legislation to regulate the casino industry. Instead, the government is now planning to introduce legislative provisions pertaining to the casino industry as part of the new Tourism Bill that the government is currently drafting.

In June, the government moved to bring a separate Casino Act to streamline the industry and encourage new global players to enter Nepal amid expectations of a boom in the tourism and hospitality industries with the ongoing development of more than 10 five-star hotels across the country. However, it now seems that the government will be taking a different approach to regulate casinos.

“We will bring the Casino Act, but not separately. We are currently discussing the issue. As per the plan, the casino law will come out as an annex to the Tourism Act that the government is currently drafting,” Tourism Secretary Krishna Prasad Devkota is quoted as telling the Kathmandu Post.

As per the news report in Kathmandu Post, government officials feel it would be better to integrate casino-related provisions in the proposed Tourism Act.

While the casinos in Nepal are currently governed by the Nepal Casino Regulations, 2013, many feel that the current regulatory framework is weak as the regulations are not backed by a law passed by the parliament. Many casino operators have refused to pay the license fees, taxes and royalties due under the Casino Regulations and have instead chosen to approach the Supreme Court for relief.

Experts believe that a comprehensive law to regulate casinos will end the ambiguity on payment of fees and also usher a proper regulatory framework that will end the current legal complexities and ambiguities.

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Gaming Legal & Regulatory

Six Lok Sabha MPs ask govt about betting legalisation, minister gives written reply

Six Members of Parliament (MPs) of the Lok Sabha raised an unstarred question in Parliament today on the central government’s plan to legalise and regulate betting and gambling in the country.

The six parliamentarians, R. Gopalakrishnan, C. Gopalakrishnan, K. Maragatham, P. Nagarajan (all from AIADMK); Raksha Khadse and Narendra Sawaikar (both from BJP) asked the government seven questions in relation to the Law Commission’s recommendation to regulate gambling and allow foreign investment in the casino sector as well as caps on bets and other proposed restrictions. The parliamentarians also sought to know the government’s reaction to the Law Commission’s suggestions.

PP Chaudhary, the Union Minister of State for Law, Justice and Corporate Affairs in a written response tabled in the Lok Sabha reiterated the Law Commission’s clarificatory press note which stated that legalising gambling and betting in India is not desirable in the present scenario, and that a complete ban on unlawful gambling and betting must be ensured .

He further added that the Law Commission’s report is under consideration of the government. The reply is very similar to Union Law and Justice Minister Ravi Shankar Prasad’s response to the Rajya Sabha last week on the Law Commission’s betting legalisation recommendations and the central government’s response.

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Legal & Regulatory

Law Commission recommends regulation of gambling and betting; will Indians be allowed to legally bet anytime soon?

In a move that is bound to evoke controversy and considerable public reaction, the Law Commission of India on Thursday released its 276th Report titled ‘Legal Framework: Gambling and Sports Betting including in Cricket in India’.

The report analysed the history of gambling in India and other parts of the globe; current legal and constitutional framework governing gambling laws in India; laws in other International jurisdictions etc. After a detailed analysis, the law panel came to the conclusion that it is better for parliament or state legislatures to legalise and strictly regulate gambling and betting activities rather than banning it.

The commission recommended that while it is desirable to ban all gambling activities, it may not be practically possible to enforce it. Thus, it stated that the most prudent approach would be to regulate gambling/betting with a stringent set of regulations.

Key recommendations of the Law Commission

Some of the proposed regulations include allowing betting payments to be made only through electronic means; limiting the number of bets that can be placed by a customer in a month/year; linking a customer’s betting account with his/her Aadhar and PAN card; categorising bets into ‘proper gambling’ (high value bets that can be placed by higher income individuals) and ‘small gambling’ (stakes of small amounts that can be placed by lower income individuals); barring those below poverty line from accessing betting facilities; criminalising match-fixing and sport fraud; defining and granting exemption to certain games of skill etc.

The commission further stated that while the power to legislate on gambling and betting lies with the state legislatures as per the constitutional framework, parliament could use its power to make laws on broadcasting and other forms of communication under entry 31 of List I of the Seventh to regulate online gambling and betting.

Alternatively, it recommended that parliament can pass laws on state subjects either when it is so required in national interest under Article 249 of the constitution or frame a model law under Article 252 of the constitution (based on resolutions by two or more state legislatures authorizing Parliament to do so) that can be adopted by other state legislatures.

The commission in its suggestions also noted that provisions in certain other laws like the Consumer Protection Act, 1986; Foreign Exchange Management Rules; Information Technology Rules; Indian Contract Act etc. will also have to be suitably amended to allow legal and regulated gaming.

The panel further stated that Foreign Direct Investment (FDI) including brand sharing, licensing and technology collaboration etc. should be permitted in the gambling space including in casinos and online gaming as it would not only result in substantial inflow of foreign investments but also boost tourism and hospitality industries in states where casinos are permitted.

Dissenting opinion

Ordinarily, there is unanimity amongst all Law Commission members regarding recommendations that ought to be submitted to the government on a particular issue. However, in an unusual move, this report saw a dissent note being recorded by one of the members, Prof (Dr.) S. Sivakumar.

Sivakumar in his strongly worded separate opinion criticised the approach taken by the Law Commission and stated that the socio-economic and cultural circumstances of the country are not pragmatic to accept legalised gambling activities, as it is still treated as a social stigma.

He further stated that the time is not ripe for legalising gambling due to widespread poverty prevalent in the country and opined that no form of gambling ought to be permitted in India.

Significance of the law panel’s suggestions

The Law Commission functions as an advisory body under the Union Ministry of Law and Justice. As such, its mandate is to provide recommendations and advice on subjects referred to it by the Law Ministry.

The central government is free to accept, reject or defer implementing the suggestions of the Law Commission.

The issue of gambling legalisation is complex, as a decision to introduce a central law on gambling and betting, a subject clearly enumerated in the state list, might be taken as an affront to the spirit of cooperative federalism, by some political parties and state governments.

Further, given that the legalisation of gambling will evoke strong reactions and objections from a section of society, especially political, social and religious groups, it is unlikely that the central government will take any steps to implement the commission’s recommendations at least until after the Lok Sabha elections next year.

In the given circumstances, it remains to be seen whether the central government will take steps to enact a law to regulate betting and gambling, as suggested by the Law Commission or put the matter in cold storage.