Law commission submits recommendation on legalising betting and gambling

Posted on by KNBT

NEW DELHI: The Law commission on Thursday submitted to the government its recommendation on legalising betting and gambling in India seeking stringent control and making the entire operation a cashless transaction with mandatory application of PAN (Permanent Account Number) and Aadhaar to curb any chances of money laundering.

In its report – Legal framework: Gambling and sports betting including in cricket in India – the law panel has said that incapability to enforce a complete ban has resulted in rampant increase in illegal gambling, resulting in a boom in black money generation and circulation. “Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option,” it noted.

Citing examples of legal betting and gambling in other countries such as in China where the state lotteries sales recorded a $51 billion high in 2013, the commission said that the additional revenue thus generated through imposition of Income Tax and the Goods and Services Tax may become a good source of revenue, which in turn, could be used for public welfare.

The panel recommended that Parliament may enact a model law for regulating gambling that may be adopted by the states or in the alternative, the Parliament may legislate in exercise of its powers under Articles 249 or 252 of the Constitution.

In case legislation is made under Article 252, states other than the consenting states will be free to adopt the same. Being a state subject under List II of the Seventh Schedule to the Constitution, it is needless to say that State Legislature(s) is competent to enact the required Law for the State(s) concerned, while duly taking note of the National Policy on gambling etc., and other legal considerations, the commission observed.

It has recommended gambling and betting to be offered only by Indian licensed operators from India possessing valid licences granted by the game licensing authority. It has also said that for participants, there must be a cap on the number of transactions in a specific period, ie, monthly, half-yearly or yearly.

“The nature of stakes should be restricted to money with a linkage to PAN card and Aadhaar card, and the betting amount should be prescribed by law, having an upper limit on the amount one can legally stake in a gamble, which may be on the basis of the deposit, winnings or losses,” it said.

The law panel has also suggested classifying gambling into two categories: ‘proper gambling’ and ‘small gambling’. ‘Proper gambling’ would be characterised by higher stakes. Accordingly, only individuals belonging to the higher income group shall be permitted to indulge in this form of gambling. On the other hand, individuals belonging to the lower income groups will have to confine themselves to ‘small gambling’, not being permitted to stake high amounts (falling within the bracket of ‘proper gambling’).

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