Fun, games and money: Legalising online sports betting can make India richer by Rs 19,000 cr

Gambling, in India, goes back a long way. In its 2018 report on the subject, the Law Commission of India (LCI) recommended that sports-related betting be legalized, citing ancient civic texts like the Manusmriti to demonstrate its prevalence in medieval India. In contemporary times, betting has been resigned to being a clandestine pastime, the practitioners of which operate outside the ambit of the law. The online gaming market, however, has witnessed exponential growth over the past few years, with revenue touching Rs. 4,380 crore in FY18, according to data collated by KPMG.

This includes money generated from fantasy sports, which unlike sports betting, is deemed a “game of skill”, and hence a legal business activity in India. But betting on sporting events, though outlawed by officials, is thriving. The Federation of Indian Chambers of Commerce & Industry (FICCI) estimates that money to the tune of Rs. 3 lakh crore changes hands every year, mainly through bookies, international websites, or technology-enabled channels such as encrypted chat rooms.

FICCI reckons that the government is inadvertently forfeiting windfall gains to the tune of Rs 19,000 crore in tax revenue every year by rendering sports betting illegal. Moreover, the lack of regulation has caused gambling to become a socio-economic problem - as demonstrated by recurring match-fixing scandals – that threatens to undermine the credibility of professional sport. FICCI and the AIGF (All India Gaming Federation), in a joint session on July 29 proposed drawing up a regulatory framework to remedy the negative perception surrounding online sports betting.


“Positive conduct by athletes, administrators, officials, supporters and other stakeholders, on and off the sporting arena is extremely important. This enhances the reputation and standing of the sporting contest and of sports overall,” said David Foster, Head of Regulatory Affairs at GVC, the multinational sports betting and gaming group. GVC runs brands like Bwin, Ladbrokes and Casino Club. While betting generates revenue for the exchequer, he argues that regulation of the sector also serves to minimize fraud on the part of bookmakers.

Shashi Tharoor, who introduced a Private Member’s Bill titled the Sports (Online Gaming and Prevention of Fraud) Bill in Parliament on December 28, 2018, is of the opinion that the legitimizing sports betting could root out the thorny issues that have given it a bad name. “The long-term prognosis for sports and betting is bleak if corruption is not dealt with. While self-regulatory practices need to be followed by the industry, there is an urgent need to have a statutory framework with government oversight to ensure service providers are following license conditions to track suspicious betting patterns and to have some control over the money flow to curb the generation of black money,” he said.

While individual states have the prerogative to draft laws pertaining to gambling, the absence of a Central regulation has been detrimental to all stakeholders, reckons Roland Landers, CEO of the All India Gaming Federation. Landers highlighted this point by giving the examples of Goa and Sikkim, where the gaming industry has created around 7,000 direct jobs, and 3,000 indirect jobs in ancillary sectors like telecommunication, marketing, and financial services.

Moreover, Tharoor’s proposed legislation mandates the creation of uniform technical and operational standards to monitor online betting platforms. These will be subject to routine security checks by the AIGF and independent audit firms. The moral history of gambling is littered with cases of addiction, resulting in personal and familial ruin. Proponents of online betting insist that this concern will be addressed through responsible gaming policies like regular audits, age verification, and enforced spending limits, thereby curbing addiction.

Since they operate in the shadows, the money generated from sports betting ends up in the underground economy. “It has been proven that beyond doubt that the money derived from the prevalent illegal sports betting system fund cross border terrorism,” Landers said. The Bill seeks to maintain a centralized ledger of all transactions made on online betting platforms – a move that would free up government manpower, given that law enforcement agencies spend approximately 30 per cent of their time on cases pertaining to gambling.

Baichung Bhutia, nicknamed the Sikkimese Sniper for his exploits on the football field, also espoused the view that betting ought to be legalized, given the success of the industry in his home state. “Regularising the industry will lead to revenue generation for the state, which should be further used in development of the sports industry,” he said.