You are here

India Law Commission Recommends Legalization of Betting

Map of India

On July 5, 2018, the Law Commission of India filed a report it had been directed to complete regarding the possibility of legalizing sports betting within the country. In “Legal Framework: Gambling and Sports Betting including in Cricket in India," the Commission advises the government to regulate real money gaming activity among the populace of 1.3 billion rather than letting a black market in gambling flourish.

Current Legality of Gambling in India

At present, most forms of real money wagering are banned throughout India except for lotteries and those forms of gaming permitted at the state level. There are brick-and-mortar casinos in the states of Goa, Daman, and Sikkim because the local legislatures have passed laws allowing them.

The prohibition on gambling does have an exemption for games of skill. Betting on horse races and playing rummy card games have been determined to be skill-based endeavors, and so they are permitted. Poker lies in a gray area throughout most of the country because the Supreme Court has not explicitly declared it to be a game of skill or chance. Lower courts have issued varying decrees on this topic. Some state codes mention poker as a game of skill, but others haven't bothered to clarify the legal status of the game.

Background

The Indian Supreme Court, in its July 2016 judgment of the case Board of Control for Cricket v. Cricket Association of Bihar & Ors., directed the Law Commission to examine the viability of legalizing betting within the country. Although initially instructed to focus solely on sports betting, the Commission explained that “there is a close association of gambling with betting and both are intertwined.” Thus, most of the conclusions that the report presents pertain to both sports betting and other forms of wagering, like casino games and poker.

As part of the process, responses were solicited from lawyers, gaming federations and companies, government bodies, and members of the general public. In total, 195 responses were received. The Commission, under the chairmanship of former Supreme Court Judge Dr. Justice B. S. Chauhan, delivered its report on July 5.

B.S. ChauhanB.S. Chauhan, Former Supreme Court Judge and Current Chairman of the Law Commission of India

More About the Recommendations

Taking note of the prevailing government policy against betting combined with the “current socioeconomic atmosphere in the country and the prevalent social and moral values,” the report sounds a bleak outlook for gambling by stating that “the State authorities must ensure enforcement of a complete ban on unlawful betting and gambling." Yet, the next paragraph appears to totally countermand this suggestion:

However, incapability to enforce a complete ban has resulted in rampant increase in illegal gambling, resulting in a boom in black-money generation and circulation. Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option.

The document goes on to advise that Parliament ought to create a national framework for wagering or at least draft a model law that the various states could enact if they wanted to. Only legally licensed entities should offer betting services whether online or offline, and companies would have an obligation to protect consumers. This would include preventing children and the impoverished from gambling.

Even among those individuals allowed to engage in gaming, the Commission stipulates that there should be limits on the amount a person could bet within a given timeframe (monthly, annually, et cetera). An unusual distinction is proposed between “proper,” or high-stakes, gambling and “small gambling.” Those below a certain income threshold would be restricted to small gambling while their wealthier fellow citizens could enjoy “proper” gambling. All of this income tracking would be enabled by linking all transactions to the customers' Aadhaar national identity cards and/or PAN tax cards.

Curiously, the report calls for all gambling to be handled without old-school payment methods like cash transfers and checks. “Gambling transactions should be made cashless,” the authors comment, “making use of electronic means of payment such as credit cards, debit cards, net-banking, Virtual Currencies (VC – also known as Cryptocurrency), etc.” We thus see that the Commission foresees a prominent role for crypto coins, like Bitcoin, in any eventual gambling market that's created.

Reasoning

The 145-page report is remarkable for its scope and breadth. Not only does it give an overview of current gambling legislation in India, but it also reaches back in time to discuss historical gaming laws, and it spans the world as it investigates how other countries treat gambling. It even cites gambling incidents from mythology!

For instance, the story of the mythological King Nala dicing away his wealth and kingdom is mentioned in the report perhaps as an illustration of the dangers of unregulated gambling.

Nala and Damayanti From Indian MythologyKing Nala and His Wife, Damayanti, Living in the Forest After He Lost His Kingdom Gambling
Painting by Raja Ravi Varma

The ancient sage Katyayana is quoted as writing in his “Smriti”:

If gambling cannot be stopped in the kingdom, it shall be regulated…The King should impose tax on gambling and make it a source of income. Gambling could be carried on openly after payment of tax to the King.

Thus, we see that the idea of gambling regulation in India is thousands of years old, and it was viewed as the most practical alternative to complete proscription, which was unworkable in practice.

The report notes the ruling in Murphy v. NCAA, the May 2018 U.S. Supreme Court case that ended the federal ban on sports betting throughout the United States. It also covers the regulated U.K. online gambling industry, which has contributed substantial sums not only to the state but also toward fighting problem gaming.

Of particular significance for readers of Professional Rakeback is the way poker is treated within the document. It seems as though the authors went out of their way to emphasize that Texas Hold'em and related card games are predominantly governed by skill rather than luck. For example, the following list of Texas Hold'em skills from computer scientist Roman V. Yampolskiy's paper “Game Skill Measure for Mixed Games” is quoted:

1. The ability to precisely calculate probability of a needed card coming on a turn;

2. The skill to read opponents’ behaviour and body language; and

3. The competence to apply strategic concepts such as “semi-bluffing and playing for implied odds.”

The Law Commission recognizes the negative effects that match-fixing and other shady dealings can have on Indian sport especially in the most popular type of contest, cricket matches. This is a further impetus to proper licensure of bookmaking organizations so that transparency and openness can be enhanced. Moreover, the legalization of betting would bolster employment, increase tourism revenue, protect vulnerable classes of society, and generate substantial tax receipts for the government.

A Dissenting Voice

One of the members of the Commission, Dr. S. Sivakumar, disagreed substantially with the conclusions and recommendations of the report, so he filed a separate opinion. Right off the bat, he took the rest of the Commission to task for expanding beyond their remit in considering other forms of gambling besides the narrowly defined betting on cricket, which was what the Supreme Court directed them to consider.

Secondly, Dr. Sivakumar states that “the socio-economic and cultural circumstances of the country” do not lend themselves to the legalization of gambling. He also raises the specter of “a vested interest in getting gambling legalized in the country, for favour of amassing money clandestinely, by a handful of game operators, thereby pushing the innocent masses to hands of poverty and penury.”

“The policy of the Government, in general,“ writes Sivakumar, “is to disallow betting and gambling and I apprehend that the recommendation of the Commission may lead to an unhealthy and unwarranted discussion.”

Online Poker Prospects for India

The institution of a national framework for real money gaming will probably do a lot to expand the ecosystem for internet poker in India. There are currently several sites that market themselves primarily to Indian players, but none of them are very large. Adda52 has an average of more than 300 players online at any given time while other country-specific sites like PokerStars.in have but a fraction of this total.

Logos of PokerStars.in and Adda52

Such abysmal traffic numbers make no sense when we contemplate the large population of the country even notwithstanding the traditional, conservative values that are prevalent. It's likely the case that uncertainty about poker's legality is keeping both operators and players from participating in this activity.

India is projected to have more than 850 million internet users by 2025, up from just 432 million in December 2016. Because almost half of India's population is under the age of 25, this boom in internet usage is expected to consist largely of young adults: the prime demographic target for online poker sites.

China was poised to be the next major growth area for internet poker, but with the recent decision by Beijing to disallow poker playing, even for play chips, the future of the game in the country is uncertain. If India can get its act together and pass the appropriate measures, then it could inherit the crown of most important poker growth market. The benefits would accrue not just to the owners of gambling firms but also to individual players and the Indian treasury.

Play Online Now

There are several online poker organizations that are happy to accept Indians to their global player pools, and they're not deterred by the unclear legalities surrounding this pastime. Sportsbetting.ag is one such internet cardroom, and it will reward you with a 100% up to $1,000 bonus on your initial deposit. You can get further bonuses on your deposits for sports betting, casino gaming, and the other products on offer. Read our comprehensive Sportsbetting Poker review for more info.

As an aside, Bodog brand just opened up gambling in India in the form of BodogIndia.com. Unfortunately, there is no poker there as of yet. Which is a shame really, because a hop, skip and a jump away over in Australia, Bodog's sister site Ignition Casino has been serving Australians with online poker and casino for almost a year now. They are kicking ass at it too, now being the largest online poker operator in the country. We are crossing our fingers that Bodog will open up poker in India soon, as the addition of another billion people to the Pai Wang Luo (formerly Bodog) Poker Network would be amazing for game liquidity and quality.

Sports betting in India social image