A CRITICAL ANALYSIS ON THE 276TH LAW COMMISSION REPORT ON LEGALITIES OF SPORTS BETTING: EXPLORING CRICKET IN INDIA

This Article is written by Akshara Verma of Lloyd School of Law, Greater Noida, Uttar Pradesh, an intern under Legal Vidhiya

Abstract:

Cricket is more than just a sport in India, it is a national obsession. The passion and love for the game runs deep in the veins of every Indian. With such a huge following and fan base , it is no surprise that sports betting especially in cricket, has become a popular activity in the country. However, the legality of this practice has been a subject of debate for many years. The issue of legality is complicated due to varying state laws and outdated national legislation. While some states have legalized sports betting, others still view it as illegal gambling. Additionally, the public Gambling Act of 1867 prohibits any form of gambling in India, including sports betting. Despite this, online betting websites and underground bookies still operate in the country, raising concerns over regulation and corruption. As a result, the Indian government has been considering a new comprehensive gambling law to address the law and regulate the industry.

Keywords: Gambling, wagering, and sports betting , current status of gambling , IPL fixing and betting case , online gambling , future of legal sports betting , pros and cons of sports betting.

Introduction : 

Gambling and sports betting have a long history in India, dating back to ancient times. However, the legal framework for gambling and sports betting in India is complex and has evolved over time.

The primary legislation governing gambling and sports betting in India is the Public Gambling Act, 1867 (PGA). The PGA prohibits gambling in all forms, except for horse racing and state-run lotteries. However, the PGA is a central enactment, and individual states have the power to enact their own gambling laws. As a result, there is a significant amount of variation in the gambling laws across different states in India. 

In recent years, there has been a growing movement to legalize and regulate gambling in India. The Law Commission of India submitted a sports betting be legalized and regulated. The report argued that legalization would help to protect consumer, generate tax revenue, and reduce the black market for gambling. 

The government has yet to take action on the law commission’s recommendations, but there are some signs that it is open to the idea of legalization gambling. In 2021, the government introduce the online Gaming (regulation) Act, 2021, which would regulate online gaming, including sports betting. The bill has yet to be passed by parliament, but it is a sign that the government is serious about considering the legalization of gambling.

The Law Commission of India , in its 276^th report, has recommended legalization of regulated betting and gambling activities, asserting that a complete ban has not been returning the desired results.  

Current status of gambling in India :

Under the current legislative setup, gambling or betting in sports is prohibited by the Public Gambling Act of 1867. Section 2(b) of the act state that “gambling includes wagering or betting but doesn’t include a lottery”. The act derives its validity from Article b372(1) of The Indian constitution which states “Notwithstanding the repeal by this constitution of the enactments referred to in article 395 but subject to the other provisions of this constitution or the law enforced in the territory of India immediately before the commencement of this constitution shall continue in force there in altered or repealed or amended by a competent legislature or other competent authority” . A state legislature is competent to make laws qua taxes and betting under entry 62 state list of the seventh schedule of the Constitution. The main purpose of the legislature regarding gambling at different levels is to suppress and regulate gambling in “public Gambling” houses.

Betting in sports constitutes a black-market worth million. Also, FICCI, in 2016, estimated the illegal market’s worth to be nearly 10 lakh crores. Even if legalization doesn’t completely sanitize the betting industry, forcing operators to maintain electronic and paper trails will be a big help. Though unregulated, still the industry provides a source of living to thousands of youths across the country.

Indian Premier League spot-fixing and betting case :

The 2013 Indian Premier League spot-fixing and betting case came to light when Delhi Police arrested three cricketers, Sreesanth, Ajit Chandila and Ankeet Chavan, on the charges of spot fixing. The three played for the Rajasthan Royals in the 2013 Indian Premier League. All three players were suspended by the Board of Control for Cricket in India (BCCI) until the inquiry by Delhi Police was conducted.

Details :

In May 2013, the Delhi Police arrested Sreesanth, Ajit Chandila, and Ankeet Chavan, members of the Rajasthan Royals team, under charges of spot-fixing during the IPL tournament. The Police stated that they were in touch with bookies, who were also arrested during the investigation. The allegations suggested that these players agreed to concede a predetermined number of runs in a specific over in return for money.

The operation started when the Delhi Police recorded illegal dealings between players and bookies. The recordings suggested a possible spot-fixing and betting scandal involving high-profile people. Subsequently, 100 people were arrested, including bookies across several cities. Vindu Dara Singh and Gurunath Meiyappan were also caught up in the scandal.

On May 26, Rajasthan Royals owners announced that they had terminated the contracts of the three players. In July 2013, a court in Delhi refused bail to Sreesanth and other accused persons, saying the evidence was prima facie strong.

In September 2013, a Delhi court granted bail to Sreesanth, Chavan and 19 others due to lack of evidence under the Maharashtra Control of Organized Crime Act (MCOCA), but under regular provisions the case still stood.

Later in October 2013, Rajasthan Royals co-owners, Shilpa Shetty and Raj Kundra, were issued notices by the Enforcement Directorate for violating foreign exchange regulations.

On July 25, 2015, the Delhi court discharged all the 36 accused in the spot-fixing case, including Sreesanth, Chandila and Chavan, as the Police were unable to make out a case of spot-fixing under MCOCA or under the Public Gambling Act. 

However, in August 2017, the Kerala High Court lifted the life ban imposed on Sreesanth by the BCCI citing lack of any concrete evidence. However, BCCI didn’t lift the ban and challenged the decision in the Supreme Court.

As of March 2019, the Supreme Court revoked Sreesanth’s life ban but asked BCCI to reconsider the quantum of punishment within 3 months.

Online gambling in India :

Online gambling across the globe is divided into two types. First, being the casino style gambling consists of games like poker and rummy. Second, being classified as betting in sports, where people place bets on sports events in real time taking a look at the odds of the games. In India, the only states that allow casino gambling are the Sikkim and Goa. However, the state that legally permits online casino gambling vin the state of Sikkim. 

In the second scenario, the betting process takes place through websites like Betfair and Bet365 that are based outside India that offers individuals to place bets online on sports events in real time. However, betting on sports vis illegal in India. In such a case, a person residing in Indian would be able to place a bet on websites, the servers of which are hosted in countries where betting is recognized by law. One could do so by placing an online bet in such websites; making and receiving payment via the means of bank transfer, etc. But since betting on sports other than horse racing is banned in India, the legislation has found ways to curb online betting.

In order to stop online betting, Indian government has no specific legislation but depends upon the provision of section 67 of the Information Technology Act11 which commands a fine which may extend to Rs 1 lakh and a punishment which may extend to a period of 5 years for anyone who publishes or transmits or causes to published in electric mode any material which consists offensive sexual material or if its effect is such as to tend to deprave and corrupt people who are likely to see, hear or read it. Since the act of gambling and betting in sports is illegal in India, it is quite evident that any website offering people such practice will come under the ambit of corrupt or deprave in the abovesaid provision.

The foreign exchange or transferring money from India to any foreign nation or bringing foreign capital into India is governed by the Foreign Exchange Management Act, 200012. Rule 3 of Schedule Financial Exchange Management Act, 200013 prohibits the remittance for purchase of lottery tickets, banned magazines, football pools, sweepstakes etc. The rule prohibits any transfer relating to gambling and the provision has left it open to cover other forms of betting. Therefore, any individual would not be able to pay on these websites for the purpose. In another scenario where if any resident tries to participate in online gambling through these websites by opening a foreign currency account in countries where the act of betting in sports is legalized will attract the section 3 of The Foreign Exchange Management Regulations (Foreign currency amounts), 2000 which14 prohibits any Indian resident from opening or holding or maintaining a foreign currency account without a special permission from the RBI.

Distinction between wagering, Gambling and Betting :

While often used interchangeably, wagering, gambling and betting do involve similar activities but there are subtle differences in the terminology.

Betting:

This involves staking money or a valuable asset on an event with an uncertain outcome, with the primary intent of winning additional money or material goods. Betting generally involves two parties where one party predicts an outcome and places a bet and the other either forfeits the bet or pays out the agreed money to the person.

According to the Oxford English Dictionary, “ betting can be defined as an action of gambling money on the outcome of a race, game, or other unpredictable events” . 

Betting in sports, is the act of wagering on the result of the sporting event. The term “betting” is generally considered synonymous with wagering; however, it alludes to antes in connection with events in the nature of races or matches between individuals or teams.

Thus, betting can simply be defined as an act of putting at stake a wagering amount (valuable or liquid cash) on the prediction of occurrence or non-occurrence of an event. It is always done against a second party who places his stake against the one placed by the first party. Neither of the parties that have put at stake their wagering amounts should have any control over the event on which the amount is wagered.

Gambling:

Gambling encompasses betting but is more extensive and is typically a broader term used to describe an activity where something of value is placed on an event with an uncertain outcome, and this risk-based event is taken with the expectation of gaining something more in return. While betting can take place in specific settings, such as on sports, horse racing, poker etc., gambling covers an array of activities including casino games like blackjack, roulette, slot machines and lottery games, bingo, etc.

Manuhas defined Gambling as :

when inanimate (things) are used (for staking money on them), that is called among men gambling (dyuta), when animate beings are used (for the same purpose), one must know that to be betting (samahvaya) When birds, rams, deer or other (animals) are caused to fight against one another after a wager has been laid, it is called betting (samahavya).

Kautilya’s Arthshastra defined gambling as wagering with inanimate objects such as dice; and betting as something that involved challenges and was concerned with cock fights, animal races and similar contests.

Wagering:

Wagering, also termed as betting, is an agreement between two parties where the person who makes an incorrect prediction about an uncertain outcome will forfeit something stipulated to the other. Typically, the term wagering is used in a formal context and is typically used in a legal context referring to agreements which involve a prize, stake, or other reward.

Sir William Anson has defined a wager or bet as “A promise to give money or money’s worth upon the determination or ascertainment of an uncertain event” or it can be said that a wager is a contract where two or more parties agree on a certain sum of money to be paid to one of them on the happening of an uncertain event.

Overall, wagering and betting are similar and are often used interchangeably in many contexts. On the other hand, gambling, while involving elements of betting and wagering, has a wider scope, which extends to any activity involving risk-taking with the expectation of a desirable result. This can range from traditional card and casino games to new digital forms of gambling. 

However, it is important to note that while these activities are a source of fun and excitement for many, they can potentially lead to harmful addiction if not responsibly managed. Hence, it is recommended to exercise moderation and responsibility while participating in these activities.

The future of legal sports betting in India :

As more countries around the world legalize sports betting, India, home to one of the most enthusiastic sports following globally, continues to deliberate over this issue. While the existing legislation leaves a gray area around the legality of online sports betting, many see potential in the emerging market and believe that proper regulation can provide significant benefits.

Currently, gambling laws in India are determined at the state level with the Public Gambling Act of 1867 being the primary central law dealing with gambling in India. The Act leaves a significant loophole since it does not address the concept of online gambling, as it predates the internet. Hence, many platforms have been able to operate in India legally, offering betting options to sports enthusiasts.

Experts believe that fully legalizing and regulating sports betting in India could provide substantial revenue for the country, increase employment, and bring much-needed transparency to the sector. A report from KPMG  indicated that online gaming to cross Rs 290 billion market in FY25 with over 657 million users.

Despite the possible economic benefits, there are notable concerns about problem gambling, sports integrity, and minors accessing betting services. However, stringent regulations can help control these issues. Regulatory practices in mature markets like the United Kingdom can serve as examples, where there are strict age restrictions, betting limits, self-exclusion mechanisms, and guidelines on advertising.

In terms of sports integrity, licensed operators can work with sports leagues and associations to ensure fair play and clamp down on corruption. As observed in many countries where sports betting is legal, a well-regulated market could actually lead to better oversight and fewer instances of match-fixing and other forms of sports corruption.

The future of legal sports betting in India remains uncertain. Still, there is growing interest from multinational betting companies as well as a positive shift in attitude from lawmakers and the public towards regulated betting. Some Indian states like Sikkim and Goa have even started issuing licenses for online betting and casino platforms, showing signs of change in the legislative outlook.

Furthermore, the Law Commission of India in its report recommended that gambling and betting in sports, including cricket, should be allowed as regulated activities taxable under the direct and indirect tax regimes, indicating the likelihood of future reform.

As India moves towards being a digital economy, sports betting also stands to gain from increased internet penetration and mobile usage, creating a market environment favorable for online sports betting platforms. However, ensuring proper regulation and effective implementation will be key to preventing potential drawbacks.

While legal sports betting in India could present significant opportunities, it requires a balanced approach that safeguards against the risks. Therefore, all stakeholders, from policymakers to operators and customers, need to work together to ensure a safe and successful transition towards legalized and regulated sports betting in India.

Pros and cons of sports betting :

Sports betting has seen a significant rise in popularity due to advancements in technology, a relaxation in gambling laws in several jurisdictions, and the inherent thrill and excitement it provides to fans of different sports worldwide. Despite its wide appeal, sports betting, like any other form of gambling, comes with its own set of pros and cons. It is crucial for individuals to consider both sides before getting involved in it.

Pros of Sports Betting:

1. Entertainment Value: For many, the biggest benefit of sports betting is the entertainment factor it provides. The thrill of watching your favorite sport becomes even more exciting when you have money on the line. The entire experience of the game becomes more intense and thrilling.
2. Potential for Making Profit: If a better is smart about their betting choices, sports betting can prove to be a potential source of profit. Some individuals even pursue this as a form of secondary income, studying form and betting strategy to make informed wagers.
3. Easy to Get Started: Sports betting is relatively easy to start. You don’t need expensive equipment or a lot of knowledge to get started. Plus, there are several online platforms that make betting and cash transactions a simple task.
4. Availability and Convenience: In the past, bettors would have to go to a bookmaker to place their bets. But today, online betting sites and apps make sports betting available anytime, anywhere, offering significant convenience for players.

Cons of Sports Betting:

1. Potential for Addiction: Like all forms of gambling, sports betting carries the risk of addiction. Problem gambling can lead to serious mental health problems and financial distress.
2. Loss of Money: Regardless of how much research and knowledge you may have, there’s always the potential for loss when placing bets on sports events due to their unpredictable nature.
3. Corruption in Sports: Widespread betting has been linked with match-fixing scandals in some sports. When substantial amounts of money are at stake, there’s always the risk of corrupt influences affecting the game’s integrity.
4. Negative Social Consequences: Heavy sports betting can lead to a myriad of social problems, such as strained personal relationships, financial ruin, and even crime due to desperation for winning or recovering losses.

 Sports betting offers a unique mix of excitement, potential profitability, and ease of access. However, the negative aspects such as the potential for addiction, monetary loss, the risk of corruption in sports, and potential negative social consequences should be kept in mind before one chooses to indulge in sports betting. It’s essential for anyone engaging in this activity to bet responsibly and seek help if they feel they’re losing control.

Recommendation by Law Commission :

The Law Commission of India, in its 276th report titled Legal Framework: Gambling and Sports Betting including Cricket in India, made several key recommendations on the regulation of gambling and sports betting.

1. Complete Prohibition Not Effective: The Commission underscored that a complete prohibition on gambling has not been returning the desired results. A significant amount of gambling activity continues to occur through illegal channels.
2. Regulated Gambling: It recommended a ‘regulated gambling and betting system’ as it will ensure detection of fraud and money laundering, etc. An important recommendation was to treat the inability to regulate betting and gambling as ‘myopia.’
3. Classified Approach: The Law Commission advised a ‘classified approach’, suggesting two categories for gambling practices – ‘proper gambling’ and ‘small gambling’. ‘Proper gambling’ would include high stakes, while ‘small gambling’ could be of low stakes. This differentiated approach is expected to protect the poor who might fall prey to unmanageable financial stress due to excessive gambling.
4. Gambling to be Cashless: All transactions between the operators and participants should ideally be cashless to regulate illegal activities. The method can be similar to how stock operations are carried out with proper record-keeping and receipts.
5. Restricting Minors: Gambling activities should not be allowed to minors and it should be ensured that easy and tempting online games are not readily available to them.
6. Amendment to Foreign Exchange Management and FDI policy: Allowing FDI in gambling and betting sectors, leading to an amendment in Foreign Exchange Management and FDI policy, which will allow legitimate economic activities to prosper.
7. Promoting Responsible Gambling: Encouraging and promoting responsible gambling, where limitations are placed on the amount that can be wagered, such as daily, monthly, or annual spending limits.
8. Transparency: They called for transparency and fairness in sports and towards this end, suggested measures including criminalizing match-fixing.

The Commission finally asserted that all these reforms and changes can only take place if lawmakers and society can take an informed decision in the best interests of society. As the final authority lies with the Parliament, they recommended drafting a law governing gambling to ensure efficient regulation.

Conclusion:

In conclusion, the legal framework surrounding sports betting in India, particularly in the context of cricket, is complex and unclear. The public Gambling Act of 1867 forms the basis Of gambling regulation In the country but its application and interpretation vary across different states. Some states have legalized certain forms of gambling, including online sports betting, most states consider sports betting illegal.

The legal ambiguity surrounding sports betting creates a challenging environment for both bettors and operators.  Bettors are left navigating through unrelated operators and potential risk, while operators lack a clear legal framework to guide their activities. This lack of clarity exposes individual to potential scams fraud and the risk of engaging in illegal activities.

Despite the challenges and uncertainties, cricket betting remains popular in India. The passion for the sports and the desire to be a part of the action keeps cricket bettors engaged and invested. The popularity of the Indian Premier League (IPL) further fuels the growth of cricket betting, with millions of fans placing bets on their favorite team and players.

,To ensure a safe and regulated environment for sports betting, it is crucial for the government to address the issue and establish A comprehensive legal framework. This framework should consider the potential economic benefits of legalization, Such as generating revenue and creating job opportunities. Additionally, it should address the concern of opponents, including the potential negative social consequences of sports betting.

In the further, it is possible that the government will take steps to regulate sports betting in India. there have been discussion and proposal indicating a growing recognition of the need to address the issue. However, until a comprehensive legal framework is established, the sports betting in India, including cricket betting will continue to exist in a legal grey area.

In the meantime, individuals interested in cricket betting should exercise caution and be aware of the potential risk involved. it is important to engage with reputable and regulated operators, if available, and to practice responsible gambling. Only time will tell how the legal landscape sports betting in India will evolve, but one thing is certain – the passion for cricket and the excitement of betting on the game will continue to be deeply ingrained in the Indian culture.

References :

1. The public Gambling Act, 1867, No.3,1867(India)
2. INDIA CONST. art.372,cl.1
3. A Barathakur, “ Lotteries Revenue and social costs : A case for total ban on state-sponsored gambling”, 2 SCC 1 (2003).
4. https://www.financialexpress.com/opinion/bet-on-legalizing-gambling-there-are- big-gains-from-revenue-to-bringing-down-crime/1234567/  visited on 9/11/2023
5. Supra note 3, at 181.
6. Information Technology Act, 2000, No. 20, Acts of Parliament, 2000 (India).
7. Ibid
8. 21LN Rangarajan (ed.), Kautilya’s Arthshastra 347 (Penguin Books India Ltd., Calcutta, (1992)
9. https://dictionary.cambridge.org/dictionary/english/gambling#dataset–business– visited on 10/11/2023.
10. https://dictionary.cambridge.org/dictionary/english/gambling#dataset–business– visited on 10/11/2023.
11. https://dictionary.cambridge.org/dictionary/english/gambling#dataset–business– visited on 10/11/2023.
12. https://m.economictimes.com/industry/media/entertainment/online–gaming–to–cross–rs290–billion–mark–in–fy25–with–over–657–million–users–kpmg/articleshow/83598631.cms visited on 10/11/2023.
13. https://en.m.wikipedia.org/wiki/2013_Indian_Premier_League_spotfixing_and_betting_case visited on 28/11/23.
14. https://blog.lenco.ng/pros–and–cons–of–sports–betting/ visited on 28/11/23.
15. https://www.livelaw.in/breaking-law-commission-recommends-legalisation-of-regulated-gambling-and-sports-betting-says-complete-ban-not-working/ visited on 13/05/23.
16. https://prsindia.org/policy/report-summaries/legal-framework-gambling-and-sports-betting-including-cricket-india visited on 15/12/2023.

Disclaimer: The materials provided herein are intended solely for informational purposes. Accessing or using the site or the materials does not establish an attorney-client relationship. The information presented on this site is not to be construed as legal or professional advice, and it should not be relied upon for such purposes or used as a substitute for advice from a licensed attorney in your state. Additionally, the viewpoint presented by the author is of a personal nature.