Kaun Banega agla Mukhya Mantri? Betting frenzy over Chavan successor

India’s craze for gambling and betting is already well known.  However, India’s craze for wagers’ has reached a new high, with more than $100 million being placed on ‘Who is going to succeed Ashok Chavan as Maharashtra’s CM?’ in the wake of the Adarsh-Gate scandal.   (The recent scandal in which high-profile Maharashtra politicians where accused of grabbing flats meant for Kargil war widows).

Such widespread speculation on day-to-day events is not at all uncommon in India.  Bookies are known to illegally accept bets on the happening or non-happening of any frivolous event.

Examples of instances where bookies have accepted bets:

How much millimetres of rainfall are expected this monsoon in Mumbai?

What is going to be the gross-opening of Golmaal-3?

Which alliance is going to form the next government? (Before the 2009 general-elections)

India losing billions: By banning gambling India is losing billions of dollars by way of revenue.  As it is apparent from this kind of ‘betting-frenzy’, satta and betting transactions are almost considered to be legitimate forms of business by bookies, customers and the general public. Technically, it may be illegal to place bets on any such events, but a person wanting to do so can easily by approaching bookies.  The police neither have the resources nor the will to mount a crack-down on these betting activities.

Doesn’t it make sense to legalise gambling when people have already accepted it as a form of business activity? It is now rumoured that the Union Ministry of Law and Justice is studying proposals to legitimize gambling and betting.  Given the fragmentation and division within political parties, such legislation is not likely to be passed very easily.

See India Today article:

I also came across a couple of interesting articles by prominent social affairs commentator Anil Dharker. Dharker in these two articles, also makes interesting arguments in favour of legalising gambling. He is also of the opinion that legalising gambling will only reduce money laundering and underworld operations.

Link to the articles:

The gambling instinct is in all of us: So why make it illegal? DNA 21st September, 2010

The terrorism and underworld connect, DNA, 17th May, 2010.

What are the odds?

Legal & Regulatory

Will India legalise Gambling?

Indian civilisation has always frowned upon gambling and wagers. Same was the case with alcohol, tobacco and drugs. Activities like gambling, drinking and smoking have also been considered to be of an immoral nature, against public order and morality by the Indian judiciary and legislation. Thus there has been, more or less a comprehensive restriction on all forms of gambling and betting.

However to ban an activity like gambling on the grounds of maintaining social order is an outdated philosophy on the following counts:

Exceptions created without logical basis: While most forms of gambling and betting are banned almost all over India, lotteries are not only allowed all across India but also promoted by various State Governments, notably the Government of Sikkim. If the Indian administration wants to discourage people from indulging in games of chance and probability involving no skill, then what is the rationale in allowing and promoting lotteries while consistently banning betting and gambling? It may be even argued that though there is absolutely no skill required in playing lotteries, certain logic and analytical skills will certainly be tested in betting on sports and winning card games like bridge.

Betting and gambling activities are already rampant:  It is a known fact that there is widespread betting on cricket matches in India. Estimates show that millions of dollars are placed on every single cricket match in India through bookmakers and a betting syndicate run by the Mumbai Underworld. It is speculated that almost US$ 1 billion was placed in bets on this year’s IPL. A KPMG report estimates India’s betting market to be worth as much as US$ 60 billion. In such a scenario wherein a large chunk of the society is already involved in betting or speculative activities it would be foolhardy for the government to say that betting and gambling is against ‘social order.’

Huge revenue for the government: Legalising, regulating and taxing gambling will bring huge income to the government by way of taxes. Even conservative estimates suggest that betting and gambling activities would amount to around 2% of our GDP. Bringing these activities in the tax ambit and perhaps even imposing special taxes on these activities would bring in billions of dollars to the government which could provide much needed funds to implement various welfare programmes.

Reduce funding to criminal and terror-related activities: As most of the illegal betting activities are run by the Mumbai based underworld, the profits of this business are channelised to foreign countries through Hawala transactions, which is later used to fund drugs, illegal arms-deals, boot-legging and terror activities. Legalising betting will curb all these black-money transactions.

Question of National Security: As the Mumbai Underworld syndicate is primarily involved in carrying out this trade, the name of India’s most-wanted gangster Dawood Ibrahim being the kingpin of betting operations in India has repeatedly surfaced. Dawood Ibrahim has been accused of anti-national activities (the 1993 Mumbai bomb-blasts); black –money transactions, including illegal property deals in India, funding terror-organisations and various other criminal activities. Thus allowing this illegal gambling only undermines India’s National security and ‘public order.’

Curbing the menace of addiction: An argument against allowing gambling is the addiction that it creates. However it would be necessary to note the provisions in the Gambling Act, 2005 of United Kingdom which has comprehensive provisions for preventing the addiction of gambling, including compelling gambling companies to inform the consumers about the vices of gambling. (Similar to the ‘smoking is injurious to health’ on cigarette packets).

How to legalise gambling? The legal intricacies’

Gambling laws in India lack clarity. There are confusing, misleading, ambigious and contradictory laws on the subject.

Thus the following changes would be required.

Constitutional Amendments: Any bid to legalise gambling would certainly require an amendment to the Seventh Schedule of the Indian Constitution such that the Central Government be able to at least lay down guidelines on gambling. (The power on making laws on gambling and betting currently lies with the State Governments).

A comprehensive Central Legislation: To legalise gambling there will certainly be a need to bring out a comprehensive and inclusive Central legislation similar to the UK Gambling Act, 2005, regulating all types of wagers such as betting, gambling, lotteries etc. and all forms of gambling such as online gambling and casinos. A regulatory authority similar to the Gambling Commission of the United Kingdom will also be required to ensure fair practices and tackle the issue of addiction.

Repeal of obsolete legislations: Certain obsolete and contradictory legislations like the Public Gambling Act, 1867, Lotteries Regulation Act, 1998 and the various State legislations need to be repealed in lieu of the abovementioned comprehensive legislation.

Amend/ Repeal Section 30 of the Indian Contract Act, 1870: The current legal position of not enforcing wagering agreements has been severely criticised. Any attempt to legalise gambling would also require enforceability of wagering agreements. This would only curb any attempts to cheat and bring in transparency, fairness and accountability.