Above: The Kingfisher Bangalore Summer Derby in progress/Photo: UNI
Though the Law Commission has denied it has made proposals to legalise gambling in sports, it has qualified this by providing a slew of measures in case this move goes ahead
~By Neeraj Mishra in Raipur
If Allahabad goes back to Prayag, Delhi may soon be renamed Hastinapur. The Law Commission of India in its special report to the government early this month cited our great gambling tradition going back to the days of Duryodhana and Yudhisthira to justify its recommendation that gambling by the rich is kosher as it raises revenue for the poor. Its only rider: it should be “cashless and regulated”.
The logic is pure gold. Since illegal gambling cannot be stopped, why not regulate it and earn? It goes even further to suggest that had Hastinapur regulated its gambling, the Draupadi-disrobing episode would not have happened! The Commission, headed by retired Supreme Court judge Justice BS Chauhan, recommended “cashless” gambling in sports as a means to increase revenue and “deal a blow to unlawful gambling”. The government could even collect more income tax and GST. And how do you regulate it? Link each throw of the dice to Aadhaar and PAN. Subsequently, Justice Chauhan has qualified this by stating in the press that the recommendation of the Commission is against gambling but other counter-views have been included in its 276th report and the media has selectively quoted from it. But the Commission has further included a classification of “proper gambling” and “small gambling”. “Proper gambling” would be for the rich who play for high stakes, while “small gambling” would be for low-income groups.
WAITING TO HAPPEN
The slow waltz towards full gaming has begun. The Supreme Court had actually asked the Law Commission’s opinion on a limited question of betting in cricket which had arisen out of the Board of Control for Cricket in India’s ongoing case in 2016. The Commission has grabbed the opportunity to propound on gambling as a whole. The lone dissenting voice in the Commission, Professor S Sivakumar, said: “A country as poor as India should not allow ‘legalised gambling’ on its soil. Only vested interests want legalisation of gambling.”
Chhattisgarh, meanwhile, has become the third state (besides UT Daman) to allow gambling with the opening of a fancy club in its new capital, Naya Raipur. A powerful man who runs casinos in Goa and Sikkim is building a golf resort in the vicinity of the Mantralaya. He is yet to announce his intention of opening it for gambling, but the inevitable happens.
When India Legal asked IGP GP Singh about it, he refused to believe that a gambling joint had opened its doors. “If indeed it has, we will have to evaluate it on the given parameters of the courts as to what constitutes legal gambling,” he said. Ironically enough, it’s the BJP with its moral issues over cow slaughter and beef and a puritanical streak that has led the gambling revolution in the country. It rules Goa, Daman and Chhattisgarh and has a friendly NDA partner running tourist magnet Sikkim. And the only man to have run a TV lottery show is a BJP MP from Haryana, legally headquartering his activities from Gangtok.
Gambling is a state subject. The Public Gambling Act (PGA) of 1867 still holds good for the country. Each state has also enacted its own anti-gambling Act on the lines of the PGA. Gambling is clubbed with Minor Acts and the search, evaluation and seizure depends upon sections of the Code of Criminal Procedure. While West Bengal exempts all card games, Goa went the whole hog in 1996 when it amended its Act and allowed offshore casinos. Sikkim followed suit in 2005, but a cash-strapped Madhya Pradesh which brought in a Bill in 1999 to permit licences in Khajuraho was shouted down by a morally indignant BJP. Ironically, if the MP Act had been amended, it would have helped the breakaway BJP-ruled Chhattisgarh in its gambling promotion endeavours today.
It’s a given that most Indians gamble with cards on festive occasions like Diwali. The poor have been playing Matka since the 1950s where one wagers on the card of the day. It was an organised game run from Bombay and Nagpur with agents all over India collecting and relaying back the money. But sometime in the ’80s, it lost out to cricket gambling controlled by the Bombay mafia. It later moved to organised gambling of the ’90s, until even that was replaced by IPL betting. Or all got merged into one. The Supreme Court had wanted the Law Commission’s opinion on this huge racket as the ICC has been at the forefront for legalising gambling in India since 2011. Its main plank is that illegal betting is controlled by mafias and the money goes into terror funding.
According to KPMG estimates, the Indian gaming market in all forms is worth $60 billion a year. That includes casinos, horse racing, cricket, online, lottery and sundry other forms. Half of this money—about $30 billion—goes to illegal betting rackets. Legal forms like horse racing in cities like Delhi and Mumbai and offshore casinos in Goa and Daman, land casinos in Gangtok and some northeast lotteries account for the rest. Most states have kept lotteries on the list of banned activities barring four northeastern ones which still claim substantial revenue from it.
As for card games, a grey area remains. Courts have debated rummy and poker. They have generally agreed that any activity which involves sporting skill and not mere chance or luck to succeed can be allowed. It comes under the constitutional guarantee of freedom of trade under Article 19(1)(g). Furthermore, in 2005, the Madras High Court held in a case that any establishment charging a fee or gate money for conducting a game of skill cannot be closed down. Legally speaking, “any activity which depended on chance, mutual consideration and prize” are essential ingredients of gambling. Black’s Law Dictionary draws a fine distinction between gaming and wager. The former is described as risking something of value for a chance to win a prize, while the latter is money or other consideration risked to an uncertain activity.
SKILL VS CHANCE
In 1967, the Supreme Court in a landmark case decided that the 13-card game of rummy was not gambling as it required a certain amount of skill.
Many establishments across India have taken the rummy route.
About the same time in the US, poker was becoming big. Casino owners and gambling dens in Vegas and Texas began promoting it in a big way. As usual, Hollywood pitched in and almost all states started organising major poker tournaments. With the advent of online gaming and American influence, Indians, too, have acquired a taste for this game. Poker is the next big thing. However, there is no ruling by any Indian court on its eligibility as a sporting event.
In England, courts have held that poker is not a game of skill as per the Gaming Act, 1845, and subsequently the Gaming Act, 1968. With the passage of the Gambling Act, 2005 (which is comprehensive legislation applicable across the UK except Northern Ireland), games which have a substantial degree of skill have also been included under the definition of “games of chance” which may not be played and organised without prior permission of the UK Gambling Commission. Hence poker rooms cannot be started in the UK without permission and licence from the Gambling Commission. It is, however, interesting to note that certain courts in the US have held poker to be a game of skill, thereby permitting these games to be conducted even outside casinos.
Poker is also the most popular game online, but as payments have to be made through cards or bank accounts, banks and almost every card company have blocked payments to any site suspected of gaming. Addicts always find a way out and so have our ingenious players. E-wallets like PayPal and Paytm have come to the rescue. Gamers first deposit certain amounts in the wallet and later make or receive payments through them. Either the system is not yet wise enough or is conveniently looking the other way for the time being.
Pertinently, several US and Singapore-based NRIs have been pushing for opening up the gambling scene. Andhra Pradesh has been besieged with applications, at least six at last count. Why Andhra? It has the largest number of NRIs and they naturally think it is time Andhra grew out of its dowdy image. The most popular place appears to be near Prakasam barrage close to Vijayawada, where NRI Siva Prakas Bobba wants to develop 135 acres as the new Sentosa Island. He has been pushing N Chandrababu Naidu to amend the Andhra Gaming Act of 1974 to accommodate his project. So far, Naidu has resisted, but with things moving in coordination at the centre, he may well be presented with a fait accompli.
Several specialists have estimated that the government could earn a clean 30 percent tax from the prize money as it does from lotteries. A further 18 percent could be charged as GST from those who run the premises, shows or services. One such estimate puts it at $1.8 billion. But the truth is that in Goa casinos have been earning millions every year for the past 22 years and are believed to have transacted enough to have paved the Goa coast in silver, if not gold, yet the Goa government earns a mere Rs 135 crore as revenue from offshore gambling activity. Sikkim, which allows four casinos on its soil, earns a mere Rs 40 crore annually. The Zee bandwagon rolled and allowed the entire country to play dice, but paid only Rs 40 crore as annual franchise fee to the Sikkim government. That was five years ago.
Thus, it is unlikely that in terms of revenue generation, gambling is a positive activity. The money is pocketed by syndicates who pay off the powerful. If the KPMG estimate is good and indeed $30 billion exists in illegal gambling in India, then figures should be commensurate.
But the bigger question that courts will have to answer soon is: Will allowing gambling, even in sports, help society? With the Supreme Court pushing liquor vends 500 metres from highways, is it likely to admire the Law Commission for its bold reformist idea?