Is this the beginning of the end for match-fixing in India?
This has been a good month for those of us that want to protect the integrity of sport, stamp out corruption, expand the tax base, and stimulate more investment and job creation in the Indian economy. Great steps have been taken to achieve all of these goals as the Law Commission of India has submitted a comprehensive and pragmatic legal framework to the government that recommends the regulation of gambling and sport betting in India.
The recommendations were put together following several rounds of stakeholder consultations and inputs. We are delighted that the UK India Business Council and UK industry were closely engaged in the process, providing insights into how the UK regulates sports betting. Others involved in the consultations were expert lawyers, foreign regulators, industry associations and policy experts – bringing India a step closer to democratised policy making.
The Supreme Court of India report on betting and spot fixing in cricket also played a significant role in the Law Commissions recommendations, with the report acknowledging that a complete ban on sport betting and gambling has failed to achieve its ultimate goal of curbing gambling. It was therefore concluded that something had to change, with effective regulation being the only viable option.
The Law Commission’s report also states that it favours amendments in India’s foreign direct investment riles and in the Foreign Exchange Management Act related to foreign participation in online and gaming industry. This is a welcome change, and will formally allow technology collaborations between domestic and foreign companies.
Protecting the Players
Rightly, central to the Law Commission’s recommendations is ensuring the safety of the players, with several checks and balances that would prevent problem or compulsive gambling. For example, it recommends putting a limit on the amount a person can bet and on the number of transactions they can execute by linking bets to the AADHAR and PAN systems. The Law Commission also suggests that all transactions should be ‘cashless’, so that they could be tracked.
These efforts attempt to protect the vulnerable, including by limiting gambling to those who are tax payers and/or have GST registrations.
The report also emphasises the need to educate people about betting and gambling, as helping change attitudes and perceptions towards gambling is a far more effective way of reducing problem gambling than simply banning it.
Centre and States Interplay
Betting and gambling is a state subject under the constitution, therefore, the report suggests that a model law enacted by the Indian parliament will pave the way for states legislatures to pass similar laws. Apart from having a model policy, the centre will also have to amend various other enabling legislation for state level legislations to work. This includes modifying Sport Code, 2011; Contracts Act, 1872; and the Information Technology Rules, 2011. Our view is that it will be important to introduce all the amendments concurrently.
With a series of important State elections this autumn and a General Election due by May 2019, it is unlikely that the Government of India will give time soon to this legislation. But it is important that the Law Commission’s recommendations are examined and implemented because the benefits are clear – cheating and corruption are removed from sport, tax revenues increase, and more jobs and prosperity are created across India.