India: Sports Betting Conundrum!

By Vidushpat Singhania, Krida Legal, New Delhi, India

There have been vociferous discussions about regulating sports betting in India during the past decade, initiated by the Federation of Industrial Chambers of Commerce and Industry in 2010.

At that time, the debate was, whether the Government should consider regulating sports betting in India.

The issue gained traction in 2013, when allegations of match fixing and spot fixing vexed India’s most popular cricket tournament, the ‘Indian Premier League’ (the IPL).

The issue of the involvement of some of the owners of the teams and players in the IPL reached the Supreme Court of India in an appeal from the judgment of the Bombay High Court, in the case of BCCI vs Cricket Association of Bihar[1].

This led the Supreme Court to set up a Committee to determine the facts, so that the Supreme Court could adjudicate on the issue. The Committee was constituted under Mr Justice Mukul Mudgal, with the author of this post as its Secretary. In its investigation report, the Committee recommended to the Supreme Court that betting on sports in India should, in fact, be regulated.

The reasons behind this recommendation were:

– revenue to the government;

– an avenue to address threats prior to a sporting fraud incident;

– identification of betting patterns;

– knowing the identities of the persons wagering; and

– generally reducing the threat to sport from the criminal elements of the society.

The recommendation of the Committee was considered and accepted, in full, by another Committee, called the Lodha Committee, which was also constituted by the Supreme Court of India to deliberate on the punishments to be imposed on the perpetrators identified by the Mudgal Committee. This led to the Supreme Court passing a judgment, whereby it directed the Law Commission of India to consider ‘regulation of betting in India’.

The Law Commission of India Report

The 276th Report of the Law Commission of India considered various aspects of gaming (including sports betting). It considered the scriptures of ancient India and noted that betting and gambling, has been a part of India’s culture and was regulated in ancient India.

On the morality of sports betting, the Law Commission observed that law remains in a state of flux on morality and that the concept of morality evolves with time. Whilst referring back to the Constitutional provisions, it held that, whilst gambling may be considered as morally questionable, the framers of the Constitution of India never intended to completely prohibit it; thus, the issue of betting and gambling was put within the purview of the state list, whereby each state has been empowered to regulate it. After considering provisions of various legislations of India, promulgated at the central and state levels, which could affect the matter, the Commission made the following recommendations:

  1. Parliament would have the competence to legislate on online betting and gambling either directly or through consent of two or more states;
  2. Skill centric games may be excluded from the ambit of gambling, like horse racing has been exempted;
  • The activity should be offered only by licensed operators who have the duty to protect the players;
  1. There should be transactions limits on such wagering/gambling;
  2. There should be two categories of gaming, that is, proper gambling (higher stakes) and small gambling (small stakes), with some income groups not being allowed to indulge in proper gambling;
  3. There should be proper reporting of all gaming transactions;
  • The vulnerable of society should be protected;
  • Foreign direct Investment in the sector should be allowed with strict regulations;
  1. There should be amendment to some of the central and state acts to allow for regulated gaming; and
  2. Match-fixing and sports fraud should be specifically made criminal offences with severe punishments.

What now?

With the national elections scheduled in May 2019, it is unlikely that any action on the recommendation of the Law Commission of India will be taken, prior to the next elected Government taking office in June 2019.

Political will is required to take this issue by the horn, which would be dependent upon the results of the elections.

What could happen?

The individual states, even now, are free to regulate sports betting within their territory. For a central legislation on gaming, the Government could form a Standing Committee and refer the Law Commission’s Report to it. Alternatively, a Government Department could take the onus upon itself to address the issue of regulation. This would lead to a draft of a regulation being prepared by the Government Department concerned, with the help of experts. After this, the draft would be issued for inter-departmental consultation, before being put forward to the Cabinet for its approval and then the legislative assemblies for their consideration.

The Government could also adopt a similar approach to the one adopted for the promulgation for the legislation pertaining to Goods and Service Tax. Representatives of state governments could be brought together through a committee, for consultation and to legislate. After arriving at a suitable solution, a draft bill could be put forward to the legislative assemblies and would require their assent, in order to become law, that is, an Act.

Readers of this post are warned that there are a number of ‘ifs and buts’ and prospective legislation would take time to enact.

However, initial steps have been taken towards that end.

Vidushpat Singhania may be contacted by e-mail at ‘vidushpat@kridalegal.com’

[1] BCCI vs Cricket Association of Bihar, (2016) 8 SCC 535.