India Law Commission Report Suggests Legalizing Gambling

India Law Commission Report Suggests Legalizing Gambling

The Law Commission of India submitted a recommendation to legalize betting and gambling in India on Thursday.

The Law Commission reported that the complete ban on gambling has been ineffective due to the rise of illegal gambling. The panel said in its report that “since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option.”

The Law Commission also admits that legalizing gambling in India would generate significant revenue for the country while preventing citizens from suffering “any kind of inconvenience at the hands of the law enforcement agencies.”

Suggestions for Legalization

The Law Commission of India suggests several ways to help legalize gambling in a way that would help prevent detrimental gambling by citizens, as well as helping to undermine illegal gambling.

One of the larger suggestions the Law Commission comes forward with is to link all gambling transactions to a citizen’s Aadhaar or PAN card (forms of identification in India). That system would work several ways, primarily as a way to regulate how much a citizen is making and prevent fraud or money laundering. Additionally, the government would be able to track and prevent citizens on social welfare from using government funds for gambling. They also suggest only legalizing electronic exchanges, also as a fraud detection system (Cryptocurrency would be legal for use).

In addition to fraud prevention, linking gambling and betting to a citizen’s ID would allow the government to cap how much a citizen could bet to help prevent detrimental gambling habits. Caps could include amounts wagered and/or number of bets made during a specified time period.

An interesting suggestion made would be establishing two brackets considered “small gambling” and “proper gambling.” As the former’s name suggests, “small gambling” would involve low stakes gambling, and be open to those of lower income groups. “Proper gambling,” on the other hand, would be the designation of higher stakes gambling, and be open only to those of higher income classes.

India’s History of Gambling

Gambling hasn't exactly been smiled upon in India since colonial times. Going back to the mid 1800’s, the Public Gambling Act of 1867 prohibited public gaming houses. The act makes it punishable up to 3 months imprisonment for being caught running a gambling house, and up to a month imprisonment for visiting one.

However, the Public Gambling Act exempts “games of skill.” Defined by India’s Supreme Court as a game “in which success primarily depends on the superior knowledge, training, attention, experience, and adroitness of the player,” games like rummy are legal for wagering on. Lottery and horse racing are also legal for gambling, though the gambling laws of India remain rather convoluted.

India has three states that allow casinos: Goa, Daman, and Sikkim. Between the 12 casinos in Sikkim and Goa, four of them are floating. This is due to the Goa, Daman and Diu Public Gaming Act, 1976, which states that casinos may only be set up in five star hotels or in offshore vessels. The first land-based casino outside Goa opened in Daman in 2017.

Online gambling is much less ambiguous. The Information Technology Act 2000 bans all transmissions that could be considered by the government to corrupt people. This ban includes all gambling, with penalties including 100,000 rupee fine or 5 years imprisonment. However, online gambling still occurs in India, with websites operating in countries where gambling is legal and offering the option to deposit and withdraw rupees.

Despite the overall report being in favor of overturning the +150 year ban on gambling, Dr. S. Sivakumar dissented at the end of the document. He believes that the social economic status of India would not support the legalization of gambling, and that legalizing gambling would only allow people to drive themselves into poverty. He was the only member of the commission in favor of upholding the 1876 ban.

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