Should Gambling be Legalized in INDIA?

What is gambling ?
Gambling is the wagering of money or something of value on an event with an uncertain outcome with the primary intent of winning money or material goods .It is betting on any event with an uncertain outcome.
There is a very subtle difference between betting and gambling . Betting is an agreement between two parties, where one predicts an outcome and places a bet and the other either forfeits the bet or pays the agreed money to the person. Betting is a form of gambling.
Types of gambling includes casino games such as poker and bingo ,card games , lottery , sports betting etc.
INTRODUCTION
All kinds of gambling, including lottery, slot machines, cards, and many others, are considered among the things that attract a lot of people.Since the oldest civilizations, people have always wanted to bet on things and events, because it is in their nature to take risks to win or lose. Too much of risk taking has led to downfall of many and thus many countries banned gambling activities .
In modern times, many countries such as UK , Australia ,Sweden etc. ,realizing the humungous growth of the gambling industry and its potential in contributing to the national income, have relaxed the laws on gambling and thus are reaping its benefits .
Technavio’s market research analysts predict that the global gambling market will grow steadily and post an impressive CAGR of approximately 8% by 2020.
In 2015, the online gaming market had a volume of 37.91 billion U.S. dollars, this figure was forecasted to increase to 59.79 billion U.S. dollars in 2020 ( source: STATISTA)
Although the industry growth figures are impressive, the industry has detrimental effects on society such as addiction and risk of involvement of youth. Hence there is an on-going debate on whether gambling and sports betting should be legalised in India or not. Is regulation is better than banning? Do the advantages outweigh the disadvantages?

LEGAL ASPECTS
GAMBLING LAW IN INDIA
The Public Gambling Act of 1867-. This 150 year old law makes operating a gambling house, assisting in the operation of a gambling house, visiting a gambling house (whether gambling or not), financing gambling and being in possession of gambling devices a crime. The penalty is a fine not exceeding 200 rupees or up to three months in prison.
.While the Act itself doesn’t define gambling; in 1996 the Supreme Court of India defined games of mere skill as follows:
The competitions where success depends on substantial degree of skill are not “gambling” and despite there being an element of chance if a game is preponderantly a game of skill it would nevertheless be a game of “mere skill”
Hence the Indian law classifies games into two broad categories viz. game of skill and game of chance
An early ruling came in 1957 where Horse Race Betting and in 1968 where rummy was determined a skill game.
EXCEPTIONS
The Constitution of India explicitly gives states the right to legislate and make policies related to “gambling and betting. 13 states have legalized lottery, and 2 states (Goa and Sikkim) have legalized many other forms of gambling.
Several casinos are operating in Goa, Sikkim and Daman. Sikkim has also issued online gambling licenses for casino based games, sports betting and lottery. Playwinlotto is a popular site amongst the masses.

GREY AREAS IN THE LAW
BETTING IN CRICKET - Since the game of cricket is skill based betting in cricket is strictly prohibited whereas it is allowed in rummy and horse race.
ONLINE GAMBLING LAW – whether it is legal to bet from India using an international bookmaker is not clear in law. No one has been ever arrested for making bets from online sites registered in foreign countries.
Many international online agencies such as bet365 and betfair have online gambling licenses issued in foreign countries and many Indian customers use their platform to bet especially in IPL (Indian Premier League . This is a big loophole in the law which is being exploited.

ECONOMIC ASPECTS
Despite of ban on gambling in India every year thousands of crores of illegal betting takes place in an underground way through bookies and online gambling sites.
A survey report from FICCI states that 85% of surveyed agreed that betting on sports existed in India and 67% agreed that it is rampant in sports.
Clearly the gambling law has been inefficient in curbing the betting. As per a report by KPMG estimating a 3 lakh crore market for betting, regulation of this industry might prove to be an economic boon for the country as it has been in case of UK and AUSTRALIA.
Betting market in India Rs. 300,000 Crores
Possible rate of tax 20% of the profits
Possible revenue to the Government Rs. 12,000 Crores to 19,000 Crores
Source: KPMG Report on “Online Gaming: A Gamble or a Sure Bet

1. Increase In Tax Revenues: Government is losing a lot of revenues in form of taxes as there is a huge market for betting and heavy expenditure incurred to curb these activities has proved to be futile. Being a developing country, a new source of revenue generation can do wonders for the Indian economic growth.
   In Goa, casinos pay over Rs 150 crores in taxes to the government.
   Australia: In 2014-15, the turnover from gambling industry was close to 3,785 million $ and government revenue of 0.612 million $ was generated. (Source: Australian Gambling Statistics, 32nd edition)
   UK : Total Gross Gambling Yield (GGY) for the GREAT BRITAIN gambling industry for period 2014-15 was £12.6 billion .(source:www.gamblingcommission.gov.uk)
   GGY is the nation’s entire spending on gambling minus the payouts from gambling.
   Revenues can also be generated through license fees from online gambling sites. Given below are license costs in different countries. (Source: Viaden (Great Britain , Italy )

2. Employment Generation: Legalising gambling can lead to a huge increase in the employment opportunities. Around 10,000 people are employed in casinos in Goa and Sikkim. If all forms of gambling such as casinos, online gambling, betting and lotteries are allowed in each and every state one can only imagine of the immense growth in employment.
   UK: As on March, 104,896 people were employed in Britain’s gambling industry.( source:www.gamblingcommission.gov.uk)

3. Reduction in Match Fixing: Now because the betting is illegal and the huge money that is offered by the bookies, which are not caught, the players will be tempted to take the money. If the betting is made legal and the bookies are registered, the players might be wary of making transaction with them. When regulated, unusual betting patterns can be tracked down and investigated easily. This will help in combating spot fixing and match fixing.

4. Increase In Tourism; In the tourism sector, gaming through the free operation of casinos has been viewed as an accepted entertainment form. With casinos expanding and growing every day in terms of provision of the best quality services, the tourism sector has received a great boost. India has a lot of potential in this sector as only Goa and Sikkim have casinos .

5. Opportunity For FDI – According to All India Gaming Federation ( AIGF) If FDI POLICY includes the gambling , betting and lottery sector ,a 26% foreign equity participation along with rights of Indian companies or governments to use the superior technical know-how of foreign companies would garner a foreign investment of more than rs 10000 crore into India .

6. Prevention of Misuse of Money: Currently, majority of the income generated through gambling is unaccounted for and transactions take place in the underworld economy which may lead to funding of terrorist and anti-social activities. Hence legalising gambling will prevent the misuse of money.

7. Promotion Of Unpopular Sports- Cricket has overshadowed all the sports in India not only in terms of popularity but also betting. Bettors are too much engaged in a sport they bet and if betting is legalised for all sports there might be an increase in the interest of the masses in other sports such as kabaddi, badminton, lawn tennis etc.

SOCIAL ASPECT

Although there are many economic advantages of legalising gambling, critics have strong arguments against uplifting the ban on gambling.

1. Addiction To Gambling – The society disapproves of gambling majorly due to the problem of addiction. The desire for earning windfall gains can lead to a downfall of many. People often risk everything and incur huge losses leading to bankruptcy.

2 Involvement Of Teenagers – There is a high probability that teenagers might get attracted towards this industry due to their fascination for a sport. This is one of the most dangerous aspect of legalising gambling.

Proponents of gambling agree on exclusion of minor from these activities, whereas people can take huge amounts of risk in stock market also and destroy their wealth. The excitement in a sports increases manifolds with inclusion of betting and provides mental satisfaction to a lot of individuals.

THE PATH FORWARD….

Gambling is a billion dollar industry which is currently untapped by India. This sector can prove to be a significant contributor to the GDP due to its several economic advantages but the social concerns should not go unnoticed. Legalising all forms of gambling requires a strong law covering all the aspects of gambling clearly without any loopholes.

A proper system has to be devised for seamless functioning of this industry and we have tried to explain a system which will eliminate all the social evils associated with gambling and simultaneously facilitate regulation of the industry …

GAMBLING PLATFORM

Introduction
This section introduces you to the kind of exchange or platform (like a stock market exchange) that can be created once the betting is legalized in the country . While introducing different types of bets the examples for each kind will be given with reference to the India vs. Bangladesh match. All kinds of schemes for betting introduced can be incorporated into a single platform or a platform can decide which scheme it wants to use.
What is meant by exchange or platform?
Platform refers to any website or any app that lets the users to place bets without contacting any bookie and anonymously. The purpose of the platform will be to allow the users to place the bets as match progresses with just a few clicks on their phone or PC.
How the exchange will work?
To get started the person willing to get involved in betting will have to install any one application of their choice from the app store on their phone or open the website of the platform.
After the first step they will have to register on the platform using the betting license number that they can acquire from the statutory body regulating betting in the country by completing all the legal requirements such as ADHAAR card, PAN card etc.
The regulatory body of gambling in India will issue licenses to these betting exchanges in return of a fees plus annual charges. .
Once the registration is complete they can opt for anonymous dealings so that the real identity will not be known to any other person on the exchange except for the exchange itself which by law they will be forbidden to share.
Now to place the bet you need money so you will have to purchase betting tickets from the platform using the real money. You can do this through online modes of payment. Use these betting tickets to make bets. As soon as you involve in any bet your money at stake in that bet will be immediately deducted from your betting account in forms of betting tickets and if you win you will be refunded the amount plus your reward in forms of betting. If you want to close betting you can convert the betting tickets into money by placing request with exchange and within an hour you can have your money back along with the reward that you earn by winning the bet.
After completing all the procedures , you have now entered the world of gambling (legally) and can experience the excitement associated with it .
What are schemes that an exchange can offer?
There will be two kinds of schemes that an exchange can offer

1. DEFAULT 2.CUSTOMIZED
   DEFAULT:
   Under this scheme the user will bet with the exchange itself. That is there will be bets that will be by default on the exchange and the user simply will have to purchase the bet for whatever amount that they want and once they win the bet they will be rewarded with the promised multiple of the amount that they paid to purchase the bet.
   Example – Suppose in the upcoming match the default bet offered by exchange at the beginning of the match is 1.01 multiple of the amount for which you purchase the bet if you bet on India and if India wins and 4.00 multiple of the amount of purchase if you place bet on Bangladesh and Bangladesh wins. Of course this bet will be subject to change as the match progresses. However the reward will be given based on the odds at the time of purchase and not at the end of the match. For example if you place bet at the beginning of the match on Bangladesh by purchasing the bet at 1000Rs and Bangladesh wins you will get 4000 after the result is officially announced and if you purchased bet in favour of India for 1000Rs you will get nothing in return you will lose 1000 bucks. Now suppose Bangladesh needs 2 runs in last over then definitely the above odds are absurd and will have be changed by then and if you purchase the bet in favour of Bangladesh at that then you will not get four times the amount.
   CUSTOMIZED
   Now if you want to place a bet that is not on the default or you want to play with other players you can use this option.
   Example: if you want to place the bet that Rohit Sharma will score a century in the match then you can create this bet by paying the exchange a certain percentage of the amount for which you want to place the bet say you want to bet that Rohit will score a century otherwise you will pay 1100 for a bet of 1000 rs then you can create this bet by paying exchange say 10rs or 1% of the betting amount. Once you offer this bet on sale on exchange the individuals against this opinion can offer you to purchase the bet and then you and the purchaser of the bet can together decide the amount of bet say 500 rs then you pay exchange 5rs to bring the bet in effect and as the bet comes to effect 500 rs worth of ticket will be deducted from the purchaser and 50 worth of tickets will be deducted from your betting account. Once the result of bet is clear and if you win you will be refunded your 50rs and a reward of 500rs and the looser will lose 500rs and if you lose 50 rs will be given to the purchaser and winner in this case along with his 500 rs.
   How the platform is better over bookie?
   • Platform will provide option of anonymous trading.
   • It will be easy to understand platform.
   • Anyone with access to internet can bet.
   • Chances of default will be minimal or absent