DEBATING THE LEGAL FUTURE OF GAMBLING: Excerpts From E-Debate of Niti Manthan cyber law research project

Information Technology Act, 2000 has laid down various cyber offences that take place in India but has also failed to recognize some of the offences which are increasing every day. Therefore, it is no surprise that a large number of people are involved in gambling in the country. Specifically, eying India, sports betting is prevalent, particularly on cricket and also on horse betting. Online gambling is a popular pastime in India. Though gambling is popular in India, it is technically prohibited in most of the ways. There are exceptions, but very little in the form of legalised and regulated gambling. When it comes to online gambling, much of the legislation which relates to gambling is very outdated and unclear. The legislation of gambling has been a subject of extensive debate in the country, but again to talk about the solution, there are none. There are no clarifications at all in terms of the legislation which is already existing. The only reason behind this is that the Central and the State are not coordinated among themselves. The fact that the Gambling related legislation at both Federal and State levels makes things more confusing.

Thus, on 12th June 2020, Niti Manthan’s Research team working on the study- "Whether online gambling should be legalised or not?" conducted an e-debate on the same topic and measured both sides in the same weighing scale.

The team was divided into two groups, and excerpts of arguments presented from both sides are mentioned below:

Piyush (Moderator)- The question that is being put forward for both sides under the roof of our main topic is that, when we talk about online gambling, are there sufficient laws that govern online gambling? If the Laws are adequate, how can government improve or frame a different law to legalize gambling? What could prove to be the x-factor to the government and the citizens if the gambling is legalized in the Nation? And if it is legalized, what model can be created to form an appropriate law, so that there is no hassle?

Secondly, if we look from the opposing view, Information Technology Act, 2000, has come a long way, but still, there is a lot of confusion. Instead, the Information Technology Act is very softy-hearted towards criminals. The ambit of the law is very limited and restricted. Instead of making laws to legalize gambling, should the government focus on already existing law and clear all the prevailing confusions? The existing laws are not strict, whereas implementing laws in favour of gamblers and legalizing it can lead to more crimes and hassles in the country. Thus, how can the government improve the existing laws and implement more stringent punishment for the criminals?

IN FAVOUR OF LEGALIZING GAMBLING

Madhuri: Gambling harms the various area of a person's life. As gambling can cause an addiction problem, and a person goes on to gamble more and more, in case they are in loss, they are of the view that one more chance and they can cover up losses, and again ends up in losing. So, this can have a lot of impact in other fields such as sociological impact, psychological impact, professional impact, and a lot more. But this would be different if gambling is regulated and sanctioned to protect the citizens. Bidding limits can save people from online gambling. If we look into the mental health perspective of young children, what is happening in the legal age for gambling and casinos is 18 years. Still, the children start gambling from a very early age that is around 12-15 years, and they can even gamble from their phones, computers, and sometimes from the smartwatches also from where they can access gambling. The various sites do not yet have the age bar, so regulating gambling could improvise all such problems. So, it has a deep impact on the young mind sitting at home, and if it is regulated, many things could be solved.

Alolika: Valid concerns could be understood if gambling is regulated. But if we restrict gambling rather than banning it, more people would start to gamble. Once we start regulating it, we can have a better framework, as in age concerns, like if a person who gambles need to have a membership for that particular gaming and for completing the membership, they will have to pay an amount, decided by the different sites. Along with the charges, certain documents must be submitted to prove that they are of a certain age, and the membership could be allowed accordingly. Another point is that if gambling is regulated, it increases the chance of more people entering into this gambling process. Now according to the reports, around 40% of the population who have smartphones are involved in gambling, and approximately 80% of the Indian population gambles at least once in a year, so we are not very far from gambling like it is not that none is aware of gambling. What can be done is when we have regulations and laws, there will be a better framework in place to govern the gambling. Hence, if we want the younger generation not to get into gambling, we should start regulating it rather than banning it, pushing it under the carpet, and saying that it exists, but if we start regulating it more problems will come up.

Zaid: Talking about the economic opportunities in regulating gambling, online gambling is an industry of 59 Billion Dollars, and as we know in India, the open markets are better than the black market. Black markets of gambling are the unseen truth in which government tries to put a cloak over it. But I would say that it is better to regulate gambling with a State intervention than to dispel reality. It would be a win-win situation for the government to regulate gambling if it is done correctly. If we levy taxes, then it won't have much problem as that associated with the decision to ban it. Post COVID-19, the economy would obviously need stimulus, then why should the government close the eyes that lie in the treasure of regulating it. To talk numbers, a gaming site had a spike of 100% in lockdown and increased the daily active users. Legalizing gambling does not only raise taxes on it but also led to a holistic increase in the state's exports. Tourisms in the States is increased, which helps the government in collecting more revenues. A lot of industries are benefitted from it. They can put in stringent laws, can bring in KYC norms. Thus it can be appropriately regularised. Regularising gambling can lead to more employment opportunities, not just in casinos or bartenders but in the hotel industry, IT Securities.

Chaitanya: The Report of the 276th Law Commission had provided the following regulatory framework for betting and gambling in India:

• Constitutional Framework: The Report suggests that central government derive the legislative competence to legislate on betting and gambling activities (which are presently on the State list, as discussed above), through an alternate entry governing 'Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication,' which falls under the Central list of the Constitution. Alternatively, the Report proposes that Parliament may enact a model law which could then be adopted by individual States, or Parliament legislate on these subjects in the exercise of its powers under Article 249 or Article 252 of the Constitution of India.
• Eligibility of a license: The Report has cautioned that gambling and betting should only be permitted to be offered by Indian licensed operators 'operating from within India'.
• Authority: While the Report suggests that a 'game licensing authority should award licenses,' it does not provide any recommendations on who such authority shall comprise of, or how it shall operate.
• Foreign Direct Investment: The Commission also recommends that the Foreign Direct Investment Policy under the Foreign Exchange Management Act, 1999, should be relaxed to allow investment in the industry. Currently, foreign direct investment is prohibited in gambling and betting, including in casinos.
• User Restrictions: The Report introduces a number of measures to protect players from gambling, particularly vulnerable sections of society, such as A bifurcation between gambling into 'proper gambling' (denoting higher- stakes gambling) and 'small gambling' (denoting lower-stakes gambling). Only individuals belonging to higher income groups would be permitted to indulge in the former.

Linkage of all gambling transactions to operator and players’ Aadhar cards (the Indian equivalent of a social security number)/permanent Account Number cards, as well as ensuring all transactions are through electronic means to ensure transparency. Age gating provisions for minors, as well as the establishment of a council to study and prevent problem gambling and gambling by minors. Prohibitions on gambling for those who avail of Government social welfare schemes, or below the tax bracket. Regulation of online advertising content, and displaying risks associated with gambling on all operator websites

• Taxation: While the Report did recommend that any income derived from betting and gambling be taxed under the Income Tax Act, 1961, and the Goods and Services Tax Act, 2017, this aspect is already covered under the prevailing tax laws. The Report remains conspicuously silent on any detailed recommendations in tune with the industry representations. This was a key concern for the Indian gaming industry, which the Report has failed to address. vii. Amendments to existing laws: The Report has recommended that certain other laws would need to be amended to bring the gambling industry within a regulatory framework. These laws are enlisted below:

Amendment to the existing Information Technology (Intermediary Guidelines) Rules, 2011, bar intermediaries from transmitting only illegal gambling, allowing licensed operators to host gambling-related content on platforms and advertising their products. Whereas, the introduction of an exception for licensed betting and gambling activities within the National Sports Development Code of India, 2011, introduced by the Ministry of Youth Affairs and Sports. The Code aims to prevent betting and gambling in sports. Section 30 of the Indian Contract Act, 1872, renders wagering contracts void and unenforceable. The Report proposes that Section 30 be amended to exempt transactions over licensed operators’ portals, or casinos, from the definition of ‘wagering agreements.’ Hence this way, a good system of regulation can be adopted, which will ensure the smooth functioning of law and order in the Nation.

AGAINST THE LEGALIZATION OF GAMBLING

Suditi: Pertaining to the age of children as mentioned by the opponent who is minor, maybe 10, 12 or any age can be online, and hence we need to regulate that. But, to contradict the point, if we regulate it, the children these days are so smart that they can install VPN, tracking-blocking software or anything of that sort and play through this software's in the online gaming sites. Secondly, we all are aware that we cannot get drinks until we attain the age of 21 years, so what we do is, we take our older friends or relatives or maybe the shopkeeper or the bartender is lenient, we can get the drinks by one or the other alternatives which we have in our hand. Similarly, these minors in the name of other people who is a major can play online games, so even if it is regulated by the government, this will not impact or even create 10% impact on children, and these children can gamble online on the go like if their parents are strict they cannot play at home, but they can surely play when they are away from home as in bus, trips or anything, because when it gets regulated, they can do so many things out of this. Accordingly, such regulations can never stop children from online gambling in this digital world. Peer pressure plays a vital role in such kind of addiction. A person gets into something by seeing others doing the same. Whereas, gambling is such an addiction that peer pressure is sure to affect the individuals. To talk about FDI, we already have cyberspace which is in disrespect to the jurisdiction, it is a very intangible kind of atmosphere where two person sitting in two different countries can have a connection and make a deal to which everything can be done, so if we are allowing access to foreign investors for online gambling businesses, we do not know that the money used is clean or not. According to FEMA, 2000, the remittances from the following are prohibited:

• Remittances from Lottery Winning,
• Income from betting on races and etc.

But in states where gambling is legal, the FDI's would come there and make wrongful gains. There was an online website called Diamondexchange.in, which was betting on the Lok Sabha Election 2019. So, these players sitting outside India can bet on these in the name of online gambling and make money from Indians and flourish their business, which would adversely affect the Indian economy. If illegal things are to be legalized, drug rackets can also provide us revenues, then why go for online gambling.

Sukrit: Some things can be argued upon, such as, yes, casinos bring in taxes, and they bring in benefits associated with different industries. But one thing that we need to take into consideration is that Goa and Sikkim are the best places to gamble. Whereas both these states have banned gambling for the locals. The Chief Minister of Goa said that "Gambling is a poison for locals." But when we talk about gambling bringing about lot of tourism, we also need to talk about the cost at which it is done. When we talk about legalizing online gambling in India, the money we are taking is of our own people, which is the bad thing because it is not just the road full of roses. According to the Journal, Gambling can be co-related with the following social deviation, which is as follows:

• Domestic Violence
• Divorce
• Drug
• Bankruptcy
• Alcohol addiction etc.

So, social evil still exists in the country. If we talk about legalizing online gambling and putting everyone on a space where they can gamble, all the above-mentioned social evils will increase. In the same journal, there was a study on the increase in facilities for people to gamble. Facilitating people to gamble more and more will only lead to crimes. This is the reason, Goa and Sikkim have also banned the locals from gambling so that such problems do not increase.

Surabhi: Like alcohol or drug addiction, gambling is a long-term disorder that tends to get worse without treatment. Even with treatment, it is widespread to start gambling again. We cannot compromise with the health of our own people because it would be a boon to the psychiatrists. Whereas public exposure to gambling, however, continues to increase in the form of lotteries, electronic and internet gambling, and casinos. Gambling behaviour alters a person's mood and state of mind. For someone with gambling addiction, the feeling of gambling is equivalent to taking a drug or having a drink. As the person becomes used to this feeling, they keep repeating the behaviour, attempting to achieve that same effect. Whereas, for instance, if we talk about a recent amendment to the Indian Constitution was GST Act, where each and everything is online, and it has also been two years since the Act came into operation, but the only question that strikes here is that, has the government succeeded in incorporating this plan smoothly, or is this plan free from all technical glitches? The answer to this question is that there are so many technical glitches in the online portal every now and then that the taxpayers faces, but there is no resolution yet, suits are increasing every now and then in regards to the error in filing returns, error in claiming Input Tax Credit, there are some provisions which are unconstitutional and still pending in the Court. There is so much of hassle that the main objective of easing tax system in India is in question. Thus, if government legalizes gambling it would create more hassle in the country. Problems will not stop instead, it will only increase.

Tannvi: The reason that the opponent mentioned in regards to economic boon, though it being a very nice thought but at what cost are we trying to legalize online gambling for economic benefit? Legalizing gambling in whole of India would lead to the deficiency in work from the side of the individuals as because the attitude regarding gambling is such that, a person thinks that if I can earn so easily without any kind of hard work, then why should I work and this way the person gets more addicted to this poison and ends up losing everything he has. And also, we are not asking to ban gambling, there are lacunas and ambiguousness in the existing laws. We are trying to promote a more regulated system all over India, which stops online gambling to ensure that the word online gambling at least exists in India's Statutes. On the other side, I would also like to state that we are not against banning online gambling in Goa and Sikkim. Let's just say that in other states, we are stopping it with some regulation and order in place, so that efficiency can be maintained with fun and creativity. When we create a division between higher and lower of the legalized regulated market of gambling, even after the division, there will be a formation of the black market, which will make sure that similar crimes arising as of now, would be the same if it is legalized. Accordingly, the two questions that the other team failed to justify are:

• How do you think India can implement regulatory authority for online gambling, considering the density of the Nation? And will the Nagaland Model, a small state, be able to quantumly applied to the whole of the Nation?
• How will laws and regulations be able to counter Health and Psychotic issues arising from Legalization?

Participants of the debate (In alphabetical order):

Alolika Chakraborty

Chaitanya Suri

Madhuri Pilania

Suditi Tandon

Sukrit Dhingra

Surabhi Rathi

Syed Mohd. Zaid

Tannvi

Coordinators: Madhav Gawri, Mayank Arya & Piyush Jalan

[The excerpts of the debate have been noted and penned down by the moderator of the debate, Piyush Jalan]

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