Should the government legalise betting in sports?

In the wake of the cricket spot-fixing scandal, the six-year-old Indian Premier League (IPL) has taken a hit. But betting continues to thrive in the country even as investigation agencies reveal more details of the scandal every day. An estimated Rs 1,500 crore was riding on the IPL final match between Chennai Super Kings and Mumbai Indians.

In the midst of the uproar over the scandal, Law Minister Kapil Sibal announced that the government would make a law to deal with unfair practices in sports. The legislation is likely to be ready by August. However, many experts say a new law will not stop cheating in sports.

"India should legalise sports betting," says Carl Rohsler, Partner at Squire Sanders Hammonds, a UK-based law firm that serves global organisations involved in gambling. "Betting is a vice that cannot be eliminated. Instead of turning its back on the problem, the government should find solutions."

Some recent news reports have said the sports ministry is considering legalising betting, but the ministry denies this. In a note, the ministry said it has "made no recommendations to regularise betting to the law ministry or to any other organisation". The note also points out that betting is a state subject, and cannot be covered by a central law.

Legalising sports betting would have some benefits, say experts. It could reduce instances of match- or spot-fixing, generate tax revenues for the government, and protect minors and other vulnerable people from the risk posed by an unregulated market.

So how would it work? Betting in sports - especially cricket - is done through illegal channels, often by people with criminal backgrounds. When a match is fixed, some bookmakers know the outcome in advance and use the information to cheat bettors.

"Once the market is open, people will prefer to bet through fair channels, online or offline," says Rajpal Singh, Director, Federation of Indian Chambers of Commerce and Industry (FICCI). "It will suck out the liquidity from the unregulated market and chances of fixing will reduce drastically."

In the UK, for instance, which legalised betting in 2005, there are some 10,000 authorised betting shops. Bookies must register with the gambling commission, a body that sets the rules for betting. They are required to report unusual bet settlements to the commission, which can fine and revoke licences and prosecute illegal gamblers. Some other countries, including France, Italy and Spain, too, have legalised betting.

Last year, FICCI estimated the size of the betting market at Rs 3 trillion. In a note submitted to the government, it said the government was losing out on tax revenues of Rs 12,000 crore to Rs 20,000 crore a year by not taxing betting. "Money spent by the Indian government to enforce gambling laws should be used to tackle other important issues," says Rohsler.

The current gambling laws in India are ambiguous. The Gambling Act, 1867, prohibits gambling and the setting up of gaming houses. However, it does not apply to "games of skill". Several court judgments have discussed the difference between "games of chance" and "games of skill". In 1996, the Supreme Court ruled that betting on horse races is a game of skill, and not just luck. Delhi, Karnataka, Maharashtra, and Tamil Nadu allow betting on horse-racing, provided it is conducted on race courses and through licensed bookies. Gambling on rummy is also allowed. "In a similar fashion, a game of cricket involves skills of players," says FICCI's Singh.

While some argue that legalising betting would not help much, others say it will increase access. "Right now, only a limited number of people are placing bets, because not everyone has access to bookmakers. Legalising betting will make the sports gambling more accessible to people who cannot afford to bet," says cricket commentator Charu Sharma.