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From Poker and Cricket Betting to bet365: The Jackpot that is Online Gambling

Senior journalist and communication strategist, A subject matter expert on bureaucracy, governance, PSUs, start-ups and policy matter.
Dec 7, 2017 10:50 AM 6 min read
Editorial

From Poker and Cricket Betting to bet365: The Jackpot that is Online Gambling

Since Injeti Srinivas, India’s Sports Secretary, met a gentleman named Nick Tofiluk in London 4 months back, not much has been said about the policy implications of that interaction. Nick was a senior official in the UK Gambling Commission (UKGC) and his meeting with Mr. Srinivas was a preparatory step to legalise India’s online gambling market.

 

Gambling and its offshoot of betting has always had a controversial position in Indian society. While public figures are naturally jumpy towards any discussion to legalise it, the Federation of Indian Chambers of Commerce and Industry (FICCI), a major industry body, estimates that India’s illegal betting market, both online and offline, is worth INR 300,000cr (USD 50 billion). FICCI data also suggests that the Government is losing out INR 12,000cr to INR 20,000cr annually by not regulating and in turn taxing these activities.

 

Though betting and gambling are officially not legal, their clandestine practice has been ongoing for ages. Liberalisation and the internet boom has ensured that an obscene amount of money flows into online gambling, currently profiteered in entirety by informal domestic intermediaries or formalised operators who set up their shop outside the country. According to a report by the BBC,

“Even though there are no online betting operators based out of India…people have registered accounts with offshore firms”

 

PUBLIC GAMBLING ACT, 1867: VAGUE AND DISCREPENT

 

Loosely governed by a 150 year old Public Gambling Act of 1867, betting is a State subject under which all types of gambling is prohibited, subject to individual State sanction. However, there is no specific law covering online betting thus granting a legal loophole and enabling promoters to setup offshore betting firms.

 

The Public Gambling Act of 1867 has several other discrepancies as well, the most significant of which is the ambiguity it allows between a “game of chance” and a “game of skill”. While the former is considered illegal, the latter in general is granted more leeway.

 

For instance, while betting on horse races is thought of as a game of skill and treated as legal, cricket is understood as a game of chance with any related betting deemed as illegal. This stems from a Supreme Court ruling in 1996 where it was declared that horse racing is a sport of skill as it primarily depends on special abilities – speed and stamina – of the horse acquired through training and the jockey. Absence of a similar precedent for cricket and lack of clarity within the regulatory framework implicitly pushes the sport towards the status of a game of chance.

 

Similarly, legal precedents drive the status of Rummy, which according to a 1968 Supreme Court ruling is a game of skill, whereas other card games like Poker and Blackjack are understood as games of chance. The apex court argues that “all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack.” 

 

Such legal vacuum ensures two things; that this sector stays in the dark, and that the government’s in-principal objection towards gambling fails to work in practice. Just a cursory online search reveals that many online betting sites, based overseas, not only accept betting in Indian Rupees, they also offer popular payment options like Skrill/Moneybookers, Neteller, Visa, Mastercard, Maestro and Bankwires for Indian players.

 

These sites include notable players such as Bet365, Dafabet.com and m88.com

 

One can easily gauge the popularity of online gambling from the fact that while Dafabet.com, licensed in the Philippines, has made a special section for Indian punters, m88.com, which is also licensed in the Philippines, has a Hindi tele-support person to guide gamblers in case they face any difficulty while depositing monies. Punters can easily find similar ‘user-friendly’ information from websites like Onlinebettingsites.in, which lists over a dozen online gambling platforms custom for the Indian gambler.

 

LODHA PANEL RECOMMENDATION AND THE SILENCE OF THE AUTHORITIES

 

In 2016, the Supreme Court appointed Justice Lodha Committee, formed against the backdrop of IPL betting and spot-fixing scandal took a realistic stand on betting. In its report submitted to the apex court, the panel led by the former Chief Justice of India advocated laws to legalise cricket betting. The Committee argued that betting was a “USD 400 billion phenomenon practised worldwide and lawmakers in India should enact laws to legalise it” which would not only fix such scandals but also generate significant revenues for the government.

 

Ironically most State cricket associations are silent on the letter from the Law Commission of India which sought their views on the Justice Lodha Committee recommendations.  

 

From Poker and Cricket Betting to bet365: The Jackpot that is Online Gambling

 

ONLINE GAMBLING: GLOBAL TREND

 

According to a report of the US-based market research provider ReportLinker, Governments around the world, including in US, Singapore and Russia, are easing regulations for online gambling. The report predicts that this sector will grow at more than 9% annually till 2021.

 

The US has already an instated law under which individual States can grant a license to online and mobile casinos operators, sportsbooks and poker sites within their borders. As on March 2017, as many as three US States – Delaware, Nevada, and New Jersey – have legalised online gambling and ReportLinker predicts that more States will follow soon.

 

Last year, amidst strong protests by the Opposition and the National Council of Churches Singapore (NCSS), representing more than 250 local churches, the Singapore Government legalised online betting by exempting the two online gambling service providers, Turf Club and Singapore Pools from the Remote Gambling Act - a law prohibiting all gambling activity online and over the phone.

 

Similarly, the UK has seen an exponential growth of the online gambling sector after implementation of the Gambling Act of 2006.

 

From Poker and Cricket Betting to bet365: The Jackpot that is Online Gambling

 

THE INDIAN SCENARIO: SIKKIM SHOWS THE WAY

 

Though Goa, Daman, and Sikkim permit gambling in the form of casinos and lotteries, it is only the Himalayan State which has achieved considerable headway in capitalising this as an economic activity. In 2008, the State government passed the Sikkim Online Gaming (Regulation) Act which allowed the setting up of betting websites in the State. On July 30, 2015, the legislative assembly passed an amendment paving the way for India's first legal online betting shop to be opened.

 

International gaming giants like William Hill, Ladbrokes and Pokerstars have already expressed their interest to enter India and tap the vast online gambling market by using a license issued by the Sikkim Government. . 

 

As per rules, the Government allows license holders to offer sports betting, roulette, black jack and poker among others to all citizens subject to payment of a 10% "online gaming levy" – which is quickly becoming a significant revenue churner.

 

THE WAY FORWARD FOR INDIA

 

In 2010, a study conducted by Playwin, an online lottery run by the Sikkim Government pegged a fully regulated online gambling market in India at USD 5 billion. It is not difficult to realise that with a rapidly growing Internet footprint across devices and income groups, this figure would have only increased many folds since then.

 

Another vital advantage of legalising online gambling is that it increases employment opportunities related to tourism, hospitality, IT and security and surveillance sectors. As a reference point, the UK, with its mature betting industry worth c. GBP 6 billion supports over 100,000 jobs.

 

By legalising online betting, match fixing and spot fixing will be reduced to a large extent. Once a sector is legalised, people will prefer to bet through fair channels. The move will bring competition and transparency, thereby sucking out the liquidity from the shadow market and the chances of fixing will fall drastically. The move will also protect minors and other vulnerable persons from the risks of dealing in an unregulated market.

 

Critics argue that legalisation of online gambling in India will led to addiction, ruining thousands of families. But given its rising popularity, the advantages clearly outweighs the cons.