India: Law Commission may recommend regulations for online betting

“Online betting is difficult to prevent, so it requires regulation. We must have a stringent law,” says the commission’s chairman Justice BS Chauhan, sharing a similar view in an interview with the Hindustan Times.

Chauhan said that the proposed law can have provisions to make sure the betting does not become habitual and looked to limit the number of times a person could wager in a year and have a tier for how much percentage of wealth could be gambled.

“The Information Technology Act has provisions to protect vulnerable sections, including children and the poor. Also, Article 249 gives Parliament the power to legislate on a matter in the State List citing national interest,” the Law Comision chairman explained.

According to the HT report, one of the proposals being studied by the panel is to ask for setting up a gaming commission and providing all-India licenses to operators.

The working paper details multiple proposed regulations such as:

• People interested in placing online bets will have to play through a licensed operator.
• The operator will seek details such as income and total property of the person placing bets.
• A high-stakes and low-stake slabs are being recommended by the law panel to ensure that people indulging in betting do not end up losing all their money and property.
• A person who does not come under the ambit of the income tax law will be allowed only to place low-stake bets.
• In a case pertaining to the Board of Control for Cricket in India, the commission was asked by the Supreme Court in July 2016 to examine whether betting can be legalised, and a law be framed to enable that.

In June 2017, the Law Commission had issued a public notice inviting suggestions from stakeholders and the public.

“Online gambling and betting is another area which has become very difficult to curb. It is understood that a lot of money is involved in illegal gambling business, creating almost a parallel economy, converting legally earned money into black money that is drained to gambling operators in other countries online,” the commission had noted then.

Based on a 2013 report prepared by FICCI, the underground betting market in India is estimated to be worth USD 450,00.000.

According to all-India gaming federation’s reported estimates, even by bringing half of the underground market through regulation, the government stands to gain over USD 1,050.000 in tax every year and nearly USD 1,500.000 will come in through FDI.

Note that the state of Sikkim issued online gambling licences in 2010 but only over an intranet, blocking access from the rest of India. The state government of Sikkim has authorized four gaming and lottery licenses – to Sugal & Damani Group, Future Gaming Group and Essel Group’s Playwin and Golden Gaming.