Legislation and Government Policy

Legalisation of Betting: A Question of How

Kumar Satyam| Prannv Dhawan

A comprehensive proposal and not mere lip service is needed for the effective legalisation of betting.


The Law Commission of India, in its 276th report, has recommended legalisation of regulated betting and gambling activities through autonomous regulations with a degree of governmental control. The idea is to generate considerable revenue, employment and control a major source of influx of black money in the economy. The report acknowledges that with the advent of online gambling and the anonymity that it ensures, the gambling and betting activities have acquired a global presence. It is obvious that Online Gambling has opened up gambling to a broader customer base and has transformed gambling into the subject of mainstream socio-legal debate. The report recognizes the deep importance of legalisation and regulating a socially undesirable activity in order to create better outcomes in terms of proper scrutiny of the activity.

Problematic Approach

However, the disappointing approach of the report towards ramifications and implications could be self-contradictory. The developments of new forms of legalized betting and gambling may impede nation-wide regulation since they may raise issues from a regulatory point of view that differ from those raised by traditional forms of betting. If the act cannot be regulated now to put a ban on these illegal activities, what will be the prospective plan to prevent profits from escaping the purview of taxation? There is no ground plan to analyse the risks of online gambling, the issues of criminality and the potential it creates for online frauds. The report only discusses the tax revenue that will flow from the regulation of betting and gambling but has no concrete plan on social costs that the government may have to address in future.

Challenge of International Cooperation

An evidence-based strategy will need to address and resolve several key issues affecting the sector. The acutest difficulty with the application of this recommendation is the enforcement problem. However much states endeavour to regulate online activity originating outside their jurisdiction, they lack the means to enforce their laws. A regulatory mechanism that cannot sanction its infringement would be a farce. The only solution of cooperation between nations at the enforcement stage would allow the government to uphold laws, however, this seems to be challenging due to multiple reasons. The international cooperation through agencies like Interpol and other organizations have faced constraints even in case of countering violent crime and economic embezzlement. Nevertheless, this cooperative approach with nations that have common interests to regulate online betting can be advanced at forums like G20, SAARC, ASEAN etc. to create a policy consensus on this pertinent issue.

The Aadhar Tangle

An ancillary point of contention is that while the government will debar those who get subsidies and do not pay taxes, there is little in terms of planning, state capacity and enforcement ability to actually implement this policy. There is no concrete plan to protect the most vulnerable sections of society from being exploited by the undesirable consequences of this policy decision. Even while there exist concerns about the legitimacy of using Aadhar as an identifier, the whole exclusion process relies on Aadhar linking. This is especially problematic considering Supreme Court is yet to decide on the constitutionality of mandatory identification through biometric data under the Aadhar scheme and there was been widespread evidence of underprivileged citizens being denied their entitlements due to faulty, temporary and malfunctioning Aadhar identification machines. There is also a possibility that the legalisation act may become another instrument for amassing money clandestinely, by a handful of game operators, thereby further pushing the innocent masses to hands of destitution and penury. This is because as long as the regulatory mechanisms for betting do not become efficient and effective to ensure compliance from influential violators, the vulnerable violators would be exposed to exploitative pressures by the regulators.

Need for Pragmatic Approach

As of now, it appears that the government is trying to sacrifice the necessary in the hope of attaining the ideal. It is not desirable to legalize an act that has been discouraged and disfavoured across the world, without properly assessing the consequences of it under the current regulatory machinery. Unfortunately, the commission has paid little attention to the issue of feasibility and pragmatism. It is a challenging task to make all this a reality, and the government will have to work hard to put it in place. Hence, it is important that the government through agencies like NITI Aayog considers the Law Commission’s recommendations seriously and devise a comprehensive proposal to devise a strong regulatory mechanism.

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