- On July 5, 2018, the Law Commission of India, chaired by Justice B.S. Chauhan, turned in its report analyzing the possibility of legalizing betting in India. [blog.prepscholar.com] The report is in response to Supreme Court order for the Commission to investigate the viability of passing legislation governing sports betting. The Commission observed that although outlawing gaming and betting is a good idea, doing away with these activities completely is not easy. As a result, it advocated for betting and gambling regulation.
- Controlling gaming and betting: According to the Constitution, gaming and betting are state subjects. As a result, the Commission stated that state legislatures have the authority to pass legislation governing gaming and betting. [blog.prepscholar.com] It did, however, say that states might adopt a model law that Parliament enacted to govern gambling and betting. Additionally, the Parliament may pass laws under Article 252 (if two or more states agree) or Article 249 (in the national interest). Regarding internet betting and gaming, it noted that legislation can be passed by Parliament.
- Rules governing gaming and betting: The Commission suggested that only Indian license holders be able to offer gaming and betting. It was suggested by the participants that there ought to be a limit on the quantity of these transactions for a given amount of time, [blog.prepscholar.com] such as monthly, half-yearly, or annual. It further suggested that cash transactions should be penalized and that all transactions between operators and participants should be cashless.
- The Commission proposed linking all betting and gaming transactions to the Aadhaar/PAN Card of the operator and the players to safeguard the public from the negative effects of these activities and promote transparency and governmental monitoring. [blog.prepscholar.com] Furthermore, under the Income Tax Act (IT Act), 1961, the Goods and Services Tax Act (GST), 2017, and other pertinent regulations, any income from betting or gaming should be subject to taxation.
- Gambling classification: The Commission suggested dividing gambling-related activities into two groups: “small gambling” and “proper gambling.Higher stakes indicate “proper gambling,” which only people in higher economic categories are allowed to engage in. Those in lower income brackets can only engage in “small gambling.” [blog.prepscholar.com] The amount that can be bet in “small gambling” will be less than the amount that can be bet in “proper gambling.”
- Prohibited individuals: The Commission suggested that some groups of people shouldn’t be allowed to use either offline or online gaming systems. These individuals include the following: (i) minors; (ii) recipients of government subsidies; or (iii) those not covered by the Goods and Services Tax Act of 2017 or the Income Tax Act of 1961.
- FEMA Amendments: To promote foreign direct investment in the casino and online gambling industries, among other things, the Commission suggested amending the Foreign Exchange Management Act of 1999 and the Foreign Direct Investment Policy. [blog.prepscholar.com] It was believed that this would spur the expansion of the tourism and hospitality sectors in those states, resulting in increased earnings and job openings.
- The amendment to the IT Rules prohibits intermediaries from hosting or transmitting content that promotes gambling under the Information Technology (Intermediary Guidelines) Rules, 2011. [blog.prepscholar.com] The Commission suggested prohibiting only intermediaries that unlawfully host or transmit gambling-related content. This ensures that in states where gambling is legal, intermediaries won’t be held accountable.
- Sports fraud and match-fixing: The Commission suggested that these activities be classified as crimes with harsh penalties.
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