Legalization of Betting in India: All You Need to Know

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This article “Betting in India Legalization: All You Need to Know” was written by an intern at Legal Upanishad.

Introduction

This article will provide information about the concept of betting in India. Its legal status, and the pros, and cons of the legalization of betting in India. Betting and gambling involve the risking of money for an uncertain result of an event, or a game, or race, etc. either physically or virtually. In recent years, gambling and betting in India have become a huge market.

In primitive times betting was accepted as a legitimate form of entertainment, however, now it has become a mode of earning money that can accelerate the power of greed in society. Also, with rapid development in technology, online betting in India has become common. Especially with the outbreak of Covid-19 and lockdown, online betting is at its peak.

Article 39 of the Indian Constitution directs the State to ensure that the functioning of the economic system does not result in the concentration of wealth and means of production, and the distribution of material resources is done in a way that promotes the common good of the citizens.

What is Betting?

To be specific, betting is an agreement between two parties. Here, one party predicts an uncertain event and will have to forfeit the agreed amount to the other party if it’s incorrect. For example, two people wager money on the outcome of horse racing or any sports event. Betting is practiced in various fields like sports, horse racing, political election, etc.

Betting and gambling are divided into the game of chance and the game of skill. Betting acts that are not based on prior skill are the game of chance. It is completely based on chance. In India skill-based betting like horse racing is legal.

Under the state list of the seventh schedule, the states have been given the right to make laws for gambling and betting independently of the Centre. The Public Gambling Act of 1867 is the only central law that regulates gambling and betting in India. This act declares that all gambling and betting will be illegal in India, except the games which require a prior skill.   

Under the Indian Contract Act, 1872 agreements by way of wager are void and no party can sue the other to recover any amount won by wager. This doesn’t mean that the wagering agreement is illegal and the parties to the agreement will be punished. Void means that it is invalid.

However, the exception is made in favor of horse racing. Horse racing isn’t complete betting, it also depends on the prior skills of the racer. Even lotteries are legal in India, various states like Goa, Maharashtra, Arunachal Pradesh, Assam, etc., have legalized lotteries. Goa Sikkim and Daman have also legalized Casinos and online gambling under the Public Gambling Act. Some states consider gambling illegal, Maharashtra has illegalized gambling under the Bombay Prevention of Gambling Act, 1887. Gaming federations like the rummy federation, All India gaming federation adopted a self-regulation code for all their advertisements.

Punishments for Gambling and Betting in India

1. Under Section 3 of the Public Gambling Act, 1867 the owner of a gaming room, a room, or a house enclosed with walls, shall be liable to a fine not exceeding two hundred rupees, or imprisonment for a term not exceeding three months.

2.  Section 4 of the act penalizes a person found in a gaming house (as mentioned in section 3) with cards, dice, money, or any other instrument of gaming. The person will be liable to a fine not exceeding one hundred rupees, or imprisonment for a term not exceeding one month.   

Pros and Cons

People have different views about betting. Some consider it immoral while people who practice it do not consider it immoral or wrong. Similarly, some are in favour of the legalization of betting while some are not.

Pros

1.  Boost the economy

An economic boost is very important for a country and legalizing betting will help to do so. The economy loses a lot of money in betting. Though betting is illegal in India, betting markets still exist. This promotes the practice of betting which in turn pulls the economy down. Money obtained by betting is black money, as the profit from this money cannot be taxed as it is not considered taxable income. Therefore, legalizing betting can stop this as the profits earned by it will be taxable, leading to a boost in the economy.

2. Curb of Black Money

The legalization of betting will curb black money and will make the profits earned from betting taxable. According to the Law Commission Report No. 276, completely banning the practice of betting wouldn’t help as it will push the betting towards the black market.

3. Employment opportunity

Legalizing betting will also generate employment. According to several statistics, wherever betting is regulated, it has created employment opportunities at a tremendous level. So, in India where there is huge unemployment, it can benefit the country.

4. Sport’s Popularity

If it is legalized, sports will be more appreciated whenever some small amount of money comes into play. Every point scored will be valued more by the viewers. This will increase the overall passion and viewership.

Cons

1. Greed

If betting is legalized, more people will indulge in it. Betting can increase the power of greed in society. People may get attracted to the hefty amount of money involved and get indulged in such practices. It will be easy for adolescents as well to get involved in such a practice and fall into its trap.

2. Financial Loss

Betting can become addictive, and since the outcome is not certain people may lose huge amounts of money. These financial losses will result in large debts and bankruptcy, consequently, this can lead to depression.

3. Increase in Crime

If people will start losing money and suffer financially, they will tend to choose easy but illegal means to earn money. Addictive gamblers will constantly need money and indulge in criminal activities like theft, fraud, etc. This will help them meet their betting demands and debts.

Suggestions

1. A certain age should be fixed and people above that fixed age only should be allowed to practice betting. This can prevent the youngsters from indulging in it.

2. Each player should be provided with a proper license. The license should only be provided after checking the history and personality of the person. This will keep away the criminals and people of unsound minds from its risk and addiction. Therefore, this will be a reasonable procedure.   

Conclusion

Indian society considered betting and gambling immoral and never completely accepted it. Today, it is only permitted in a few states. Even sports betting is allowed in Sikkim and Meghalaya only. Developed countries like UK and China have been using the revenue generated from taxing betting activities for a good cause.

Therefore, this can set a good example for India to think about the tax involved in betting. Despite the laws against betting in India, it is still practiced secretly. It is not feasible to completely ban it. There are various advantages of legalizing betting which will surely help the State to develop. However, the disadvantages are also serious. The government should consider both the pros and cons and form a proper framework to regulate it.

References

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