This 276th Law Commission Report recommends primarily the need to legalise and regulate betting and gambling. The celebrated platform where spot fixing and betting issue came into light was the Indian Premier League (IPL) matches of 2013, after which 2 committees were formed, i.e. Mudgal Committee and Lodha Committee among which Lodha Committee suggested legalising betting and while considering the same in the case of Board of Cricket Control in India v. Cricket Association of Bihar, (2014) 7 SCC 383 the Supreme Court made a reference to the Law Commission to examine the issue of legalisation of betting.
The Commission in this report has discussed the history of betting and gambling, as in from when and where the concepts of betting and gambling could be traced in India. For instance, in Ancient history these concepts can be found in Ramayana, Mahabharata, Manusmriti, Kautilya Arthashashtra, Brihaspati, Katyayana Smriti, Yagnyavalkya Smriti, Atharv Veda, and Rig Veda. These concepts existed in ancient times but along with laws to regulate it. The ancient period recognized this fact that, if gambling cannot be stopped it ought to be regulated which in turn could become a good source of income.
One thing is clear that existing laws have failed to implement complete ban on betting and gambling as a lot of illegal gambling keep taking place resulting in boom in black-money generation and circulation. It is quite impossible to completely put a ban on betting and gambling and therefore, there is a need to regulate them. So that such transactions can be monitored and fraud is detected.
For regulating the same 3 pronged strategies would be needed, i.e.
- existing laws to be amended,
- illegal gambling to be stopped and
- new laws to be created.
In light of the above observation the Commission recommended the following:
1. Parliament can enact legislations on betting and gambling under Entry 31 of List 1 of VII Schedule of the Constitution of India since online betting and gambling are offered and played over media.
2. Certain skill centric games should be made an exception to the prohibition on “gambling”.
3. Only that operator should be allowed to provide betting and gambling services who has valid license to do so granted by the game licensing authority.
4. Two categories of gambling was suggested i.e. proper and small gambling based on higher and lower income groups. A person belonging to higher income group would be able to put higher stakes belonging to the ‘proper gambling’ category whereas a person belonging to lower income has to confine to ‘small gambling’ and cannot be allowed to stake higher amounts.
5. All betting and gambling transactions ought to be linked with Aadhaar/PAN card of the operator and the participant/player to protect the public from ill effects, and increase transparency and State supervision.
6. The enactment related to betting and gambling should be enacted in such a way so as to protect the vulnerable section (minor and people below poverty line, etc.) of society from exploitation.
7. Transaction amongst or between operators and participant/player to be made mandatorily cashless (in order to monitor every single transaction) and any cash transaction should be penalized by an enactment.
8. Legalization and regularization of betting and gambling would enable the government to generate revenue out of it by making it taxable under Income Tax Act, 1961, the Goods and Services Tax Act, 2017 and other relevant Acts.
9. Various amendments for various statutes (recommended) such as —
- Foreign Exchange Management Act, 1999 and the Rules made there under as also the Foreign Direct Investment (FDI) Policy, to encourage FDI in the casino/online gaming industry, lawfully permitting technological collaborations, licensing and brand sharing agreements, etc.
- Information Technology (Intermediary Guidelines) Rules, 2011 put a bar on Intermediaries hosting or transmitting gambling related content. Insertion of word ‘illegal’ before ‘gambling’ was recommended as a consequence of which only that content will be barred which is part of illegal gambling and not the licensed gambling.
- The National Sports Development Code of India, 2011, which aims at preventing betting and gambling in sports or any other code applicable from time to time, will require amendment to create exception for the same.
- Amendment of Section 30 related to wagering contracts under the Indian Contracts Act, 1872.
10. Match-fixing and sports fraud should be specifically made criminal offences and be penalized.