Sports Minister rules out legalising betting, may consider lottery to fund sports programmes

Kiren Rijiju, the Union Minister of State (Independent Charge) for Sports and Youth Affairs, in an Idea Exchange conversation with The Indian Express unequivocally stated his opposition to legalising sports betting, noting that it is illegal and immoral.

Rijiju, when asked about his views on legalising betting in sports, said, “I am against any form of betting and gambling. It is illegal and immoral. ”

The sports minister however appeared open to the idea of floating lottery schemes and draws to raise funds for sports persons and sports infrastructure stating that using lottery draws as a means to support sports can be considered, as such a system had been successful in the UK.

While stating that there are several other means to raise funds for sports apart from lottery, he noted, “Lottery is a good system. Like the UK, many countries have this system and it has generated a lot of money… I have to discuss the matter with the Prime Minister. Things are at an early stage, and lottery is one of the options that we are looking at as a source of funding for future. But lottery should be thought about in a professional way, not for gambling.”

In September this year, Rijiju had expressed his hesitation at legalising betting, noting that it is a state subject, and thus all stakeholders had to be consulted. He had however cautioned that a move to legalise betting or gambling could have an impact on society.

In the past, the central government has consistently maintained that while it discourages the activity, betting and gambling is a state subject and state governments have the primary responsibility of framing their own policy on the issue.

Gaming Legal & Regulatory

Kiren Rijiju non-committal on sports betting legalisation

Union Minister for Sports and Youth Affairs Kiren Rijiju in an interview given to daily Deccan Herald last week, appeared to not give any clear answer on the issue of rampant betting in sports and whether it should be legalised.

The Sports Minister in his reply to a question on sports betting in the interview, noted that his ministry, whenever it is made aware about it, tries to imposed a crackdown on illegal betting activities. He also noted that different states have to be taken on board before a decision can be taken on the issue.

He told Deccan Herald, “These are things that have a bearing on society. For example, in many countries, consuming alcohol is banned. We have always had a major crackdown on gambling. Whenever we are aware of it, we don’t allow it. But I agree that some cases remain off the hook. The ministry will have to consult different States before taking a call on this. The scenarios are different in different States. Like Sikkim has permitted casinos. As I said, whatever we decide, will have a bearing on society.”

Rijiju’s stance is similar to the written replies given by Union Law Minister Ravi Shankar Prasad to a query in the Lok Sabha few months ago, on banning online betting websites. Prasad had stated that betting and gambling are state subjects and that individual state governments are free to take a decision on the matter.

Last year, the Law Minister had on a few occasions stated that the 276th report of the Law Commission of India, which had recommended legalising betting as one of the alternatives, was under consideration of the government, without giving any definitive details about whether the government intends to take any action on the issue.

Gaming Legal & Regulatory

Jaipur police arrests bookies facilitating bets through Betfair

The Jaipur crime branch has arrested two betting kingpins having links with the underworld and international betting syndicates for taking bets worth over Rs. 3,000 crores during the ongoing season of the Indian Premier League (IPL), as per news reports.

Top bookies Ramesh Kumar Gangwal and Deepak Maheshwari were arrested by the crime branch after tracing their footprints online. The duo allegedly ran their betting network through international betting website Betfair and its skins.

Although the Betfair website cannot be be accessed through Indian IP addresses after the company took a decision in January this year to discontinue accepting bets from India, Gangwal and Maheshwari used virtual private networks (VPNs) to circumvent the ban placed by Betfair.

According to the police, Gangwal is one of the top persons involved in the betting mafia in India and has links to the underworld in Dubai and Pakistan. Gangwal was allegedly in touch with a Punjab-based ‘super boss’ who used to provide lines and franchisees to other smaller bookies or agents to accept bets and retain a commission or share of profit based on the amounts bet.

To curb the menace of illegal gambling and betting, the All India Gaming Federation (AIGF) had written a letter to Prime Minister Narendra Modi in November 2018 stating that several offshore betting websites, including Betfair, are illegally accepting players and deposits from India in contravention of the Foreign Exchange Management Act, Prevention of Money Laundering Act and other laws.

AIGF had urged the PM to block illegal gambling and betting websites that are not complying with Indian laws and urged the Enforcement Directorate (ED) to investigate the matter.

Read more on gambling laws in India.


StarPick withdraws from IFSG membership

Fantasy sports portal StarPick has announced that it is withdrawing from the membership of sports gaming industry body Indian Federation of Sports Gaming (IFSG) with immediate effect.

The reason given by the company for its withdrawal and disassociation from the industry body, was because innovation and newer formats of fantasy gaming, such as the company’s recently launched prediction-based ‘Fantasy MatchUp’ games  were not accepted by the industry body in its charter.

Commenting on the withdrawal, Trigam Mukherjee, CEO of StarPick India said, “StarPick is focussed on engaging the users with superior technology and innovations. However, we believe that that current IFSG charter is not conducive for us as a company to innovate in the fantasy sports gaming space and hence are withdrawing our membership with immediate effect.”

Mukherjee added, “Though fantasy sports gaming and some platforms have been around in India for over a decade, this space is still in its infancy. There has been no real innovation in this space until we launched StarPick in 2018. We believe that platforms such as ours need the freedom to disrupt and innovate to bring new game-play formats to the Indian users in addition to the tried and tested older game-play formats.”

Reacting to the development, IFSG stated that StarPick’s new formats allowing users to predict performing players in a given match may not be legally tenable and could be perceived as some form of sports betting.

 “IFSG is driven by transparency, integrity and responsibility. We and our members believe in providing a safe and responsible fantasy sports gaming environment to our users. For the same, we have several checks and balances in place to help our members maintain ethical standards and also adhere to fantasy sports format/s that is/are legally approved by the Indian courts. While many fantasy sports operators believe in innovations in fantasy sports gaming format, they tend to overlook the legal impact of the same.

As India’s only industry body, we are here to help and support our members align with legally approved standards and ethical way to engage with the users. Members who prefer taking up formats that are not legally approved cannot be backed by IFSG and they are free to withdraw their membership. We will not support any member violating the IFSG Charter that associates fantasy sports to sports betting in any form or shape. We are open to suggestions from our members and willing to work with them in building new formats that are within the purview of the Indian laws,” said IFSG President John Loffhagen in a statement.


Recap: Important deals of 2018 and what the gaming industry can expect in 2019

Consolidation of the online gaming industry was the trend in 2018 and the year saw quite a few M&A transactions happening, particularly in the online skill gaming space, although there weren’t too many updates on the legal and regulatory front, with important cases that will decide the future of poker in Gujarat and rummy/skill games in Telangana getting stalled.

Here is a recap of some of the important deals that happened in 2018:

1.  PokerStars starts India website with Sugal & Damani Group: Canada-based The Stars Group granted an exclusive license to Sachiko Gaming Private Limited, a company connected to the lottery conglomerate Sugal & Damani Group to start an India website, in April 2018. Although the PokerStars India website has not yet gathered as much momentum as one would have expected,  it is expected that Sachiko Gaming will ramp up their marketing spends, by spending over Rs.20-30 crores in the next couple of years, in an attempt to take the new website to the leadership position in online poker.

2. Dream11 raises around US$100 million in a Series D round led by Tencent Holdings: Leading online fantasy sports portal Dream11 raised around US$100 million (around Rs. 700 crores) in a Series D round. The round was led by Chinese gaming and e-commerce giant Tencent Holdings and other existing investors of the company. The deal will fund Dream11’s aggressive media campaigns and tie-ups with sports federations across cricket, hockey, kabbadi, football and other sports. The massive infusion of capital will probably make it almost impossible to dislodge Dream11 from the market leader’s position in the fantasy sports space.

3. 9stacks raises Rs. 28 crores in Series A round: Sparskills Technologies Private Limited, the company that operates online poker website 9stacks, became one of the few gaming websites in the country to raise a Series A funding round. The company raised around Rs. 28 crores in two tranches, in the funding round led by VC firm WaterBridge Ventures and other existing angel investors.

4. Sequoia Capital invests in skill gaming and e-sports startup MPL: Another interesting transaction in the real money skill gaming space was Sequoia Capital’s US$5 million (around Rs.35.1 crore) investment in Mobile Premier League (MPL), an app that allows players to play real-money tournaments of casual and strategy games like fruit chop, monster truck, space breaker, sudoku etc.

5. Patym forms JV for skill-gaming venture: Another interesting trend in 2018 was the joint venture formed by Indian payment and shopping giant Paytm with Alibaba-backed Chinese technology company AGTech Holdings. The two companies have formed Gamepind, a real money quiz gaming website and app. The two companies have infused around US$16 million (over Rs. 100 crores) in the new venture, with indications that the new company Gamepind will also foray into other conventional skill games like poker and rummy.

Apart from the above, there were several other companies that forayed into the online poker and fantasy sports space, as well as other innovative games like quiz and esports.

Looking ahead into 2019, one can expect this trend to continue and more ventures in the social and skill gaming space. It should not surprise anyone if this trend will continue into the next year and new, innovative type of skill games will gain popularity.

The coming year would also hopefully see resolution of the pending matters in the Gujarat and Telangana High Courts on poker and rummy respectively that would give more clarity to the skill gaming industry. The debate on the merits of the legalisation of sports betting and other types of online gaming at a central level will also gain momentum, especially after Congress MP Shashi Tharoor’s private member’s bill on the subject. The second half of 2019, after the Lok Sabha election, could see some further movement on the topic.

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.

Legal & Regulatory

Amar Singh raises starred question on legalising betting and gambling in Rajya Sabha

Exclusive Independent Rajya Sabha Member of Parliament (MP) and former Samajwadi Party General Secretary Amar Singh has raised a starred question on legalisation of gambling and betting in the Rajya Sabha.

Singh in his question has asked Union Minister for Law and Justice, Ravi Shankar Prasad to state whether the Law Commission of India has sent a proposal to legalise gambling and betting in the country.

He has further asked for the details of the Law Commission’s proposal and action proposed to be taken by the government on the Law Commission’s suggestions.

The starred question raised by Singh is scheduled to be answered by the Law Minister on 14th December. Members can also ask follow-up questions to the oral response that is required to be given by the government to starred questions.

In the monsoon session of Parliament held in July this year, two Rajya Sabha MPs, AIADMK’s Vijila Sathyananth  and Kerala Congress (Mani’s) Jose K. Mani had also raised similar starred questions.

Since the house did not function properly, a written response tabled by Prasad at the time stated that the Law Commission of India’s 276th report on gambling and betting and its recommendations are under consideration of the government.

In the same session of parliament, Union Minister of State for Law and Justice PP Chaudhary had given a similar response to the queries of six Lok Sabha MPs on the Law Commission’s recommendations and proposed steps to be taken by the government.

Gaming Legal & Regulatory

AIGF writes to PM demanding action against offshore betting websites

Exclusive The All India Gaming Federation (AIGF) has written to Prime Minister Narendra Modi demanding that the Enforcement Directorate (ED) investigate and take action against offshore betting websites that are illegally luring Indian citizens and accepting bets from India, in contravention of the Foreign Exchange Management Rules and cyber laws.

AIGF in its missive to the Prime Minister has stated that many online gambling and betting websites are openly accepting players from India through e-wallets, agents and hawala transactions that is resulting in citizens being lured to the addiction of gambling.

Besides this, the gaming body has said that the online gambling websites also pose a national security threat as money from Indian citizens is being sent outside India through illegal means and may be used for financing undesirable and illegal activities.

AIGF has further asked the central government to take steps to block the foreign websites accepting deposits from Indian players under the Information Technology Act and Rules. It has further asked Prime Minister Modi to direct the Enforcement Directorate (ED) to conduct a comprehensive probe against the offshore gambling websites for violations of the Prevention of Money-Laundering Act, 2002; Foreign Exchange Management Act, 2000 and other laws.

Some of the websites listed by AIGF which are illegally soliciting and accepting players from India include 1xbet, Jeetwin, BetRally and Bet365.

The gaming federation while seeking a crackdown on offshore betting websites has clarified that the central government should favourably consider licensing and regulating online sports betting within the country in light of the Law Commission’s recommendations and suggestions by other jurists.

According to them, this move will prevent money-laundering and outflow of betting money abroad through illegitimate means and ensure that massive amounts of money that is spent on betting is taxed within India.


Eventus International to host 2 day SPICE gaming conference in Goa in February 2019

After successfully hosting the Sports Betting & Gaming India (SBGI) conference in Goa in February this year, Hong Kong-based events company Eventus International has announced the second edition of its India event, called Strategic Platform for iGaming Conference & Exhibition (SPICE) .

The re-branded two day exhibition and summit is scheduled to take place on the 26th & 27th February 2019 in Goa, India.

The two-day event will delve into the impact and opportunities that comes with clear and well-defined legalised gambling. Presentations will discuss investment opportunities in online skill gaming and brick and mortar casinos, effective structuring of foreign investments and gaming businesses, responsible gambling and the player protection and the socio-economic and financial benefits of legalised gambling etc.

With the national general elections scheduled to be held in April-May 2019, the event will discuss and deliberate on the possible options before law and policy makers to bring changes in the gaming industry and brainstorm the investment opportunities available in the present environment: not just in India, but in the broader South Asian region.

Commenting on the announcement of the event,  Yudi Soetjiptadi, Managing Director at Eventus International said, “After the successful SBGI summit and exhibition last year, we hope to continue the dialogue with SPICE, which we hope will be received as a constructive initiative, presenting an opportunity to both the Indian government and regulator and the gambling and gaming industry.”

Further details about the agenda and registration for the event will be updated on the event webpage.

Legal & Regulatory

US Supreme Court allows states to regulate sports betting, will this decision have a ripple effect in India?

On 14th May, 2018, the US Supreme Court in a majority verdict in Murphy (Governor of New Jersey) v. National Collegiate Athletic Association invalidated the Professional and Amateur Sports Protection Act, 1992 (PASPA), a federal legislation that disallowed states to promote, operate, license, authorise or sponsor sports betting.

The law barred all states from permitting sports betting, but granted exemptions to four states that already permitted some form of sports betting before passage of the law to continue those offerings, was invalidated by the Supreme Court on the grounds that it violated the ‘anti-commandeering’ principle, that prevents the Congress from issuing direct orders to the states.

The invalidation of PASPA after years of litigation, on the grounds of violation of principles of the federal structure envisaged by the American constitution has generated considerable excitement in the gaming industry. In fact, it would not be incorrect to say that the historic decision will have a major impact on the global gaming industry.

News reports indicate that apart from the state of New Jersey (which was the petitioner in this case), ten or more other states are looking to immediately pass legislations to regulate, license and tax sports betting. Experts believe that more than thirty states could regulate and license the activity in the next four or five years.

While it is best to leave the those having expertise in American constitutional law and jurisprudence to analyse the judgment and its implications in detail, it would be worthwhile to examine whether the order would have any implications on the move to get sports betting legalised in India.

The Indian constitution is a quasi-federal one, with the centre enjoying a stronger role vis-a-vis states. The Indian constitution does not follow the strict federal model envisaged by the founding fathers of the United States of America and thus the anti-commandeering principle may not have much relevance here. Further, unlike the American constitution, the subjects which the parliament and state legislatures can regulate are well enumerated in the seventh schedule of the Indian constitution.

Under entry 34 of the state list, it is clear that state legislatures have the power to regulate gambling and betting activities.  However, parliament is given the power to legislate on state subjects in certain circumstances, i.e. if two or more state legislatures specifically request it to do so or in pursuance of an International treaties or if it is required to be done for a limited period of time in national interest.

Arguably, the centre could use its powers to legislate on inter-state trade and commerce (entry 42) or communication (entry 31) to at least regulate or ban online sports betting. The Law Commission of India has been examining the issue for over a year and a half now, and it is unclear whether and when it will come out with its recommendations.

The Supreme Court has also admitted a petition filed by one Geeta Rani more than a year ago, which urges the court to issue directions to the central and state governments to regulate sports betting.

Despite all the brouhaha over legalisation of sports betting, the decision of the US Supreme Court may just bolster the case for the Law Commission and the central government to shy away from taking any decision on the contentious issue and leave it to individual states to decide their policy.

Given the complex socio-economic conditions and various other challenges in governance, state governments in India would not be in a hurry to emulate their US counterparts by rushing to pass legislation on sports betting.  In spite of the path-breaking US Supreme Court judgment and move by various American states to legalise betting, the debate on sports betting legalisation is unlikely to gain momentum in India just yet.