Should Gambling be Legalized in India?

Disclaimer: The opinions expressed in this article are my personal and not of any organizations I might have been, or am, associated with.

Should gambling be legalized in India? One would wonder, as I do too, why I chose this subject. In the list of short-term, long-term priorities of the Indian government such as startup India, standup India, skill India, make in India, ease of doing business, digital India, smart cities, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and so on and so forth, legalizing gambling might not even have got a mention.  However, every aspect that touches economy and society needs a look into. 

There are two schools of thought. One that believes that gambling is inherent to human nature and since ancient times humans have indulged in gambling activities.  Besides, banning gambling not only creates underground economy but deprives the state of tax revenue and breeds corruption.  The other school of thought argues that gambling is not a productive activity and the labour and time spent on it does not add any wealth to the society. There are issues like compulsive gambling which can wreak havoc in economic condition of families, particularly poor families. In India’s context, I tend to lean towards the latter.  For simple reason that involve larger public good. I will come to this later. 

Except for some select categories like lotteries and horse racing, gambling in India is illegal.  Only Goa, Daman and Sikkim allow casinos.  Sikkim also operates online lotteries “Playwin”, which accepts bets from players throughout India.  Half of estimated US$60 billion per year gambling market in India is illegal.  It is argued that introducing legal but regulated gambling would bring underground or parallel economy out of the grip of mafia who use this illegal channel to fund terrorists and drug cartel.  International Cricket Council is advocating legalizing sports betting. So are many other Indian professionals say allow Indian punters to do what they anyway do. 

Would legalizing or regulated gambling eliminate underground economy? Trading in equity and certain commodities on exchanges is legal. Over the period, the watchdog, Stock Exchange Board of India, has evolved watertight regime against unofficial placements and dealings. Despite so, in many towns of India illegal speculating in stock takes place daily where hordes of cash exchange hands. Unscrupulous elements use lotteries to channel their unaccounted money. Legalizing gambling is not going to help eradicate menace of money laundering, underground economy and crime.  In Nevada and Louisiana, two states in America where casinos are legal, the entire industry is rife with mafias and criminals working for them for control of big money that ride there. Both of them are counted among the most violent crime-ridden states in America. Gambling and mafias controlling casinos are considered among major reasons for this dubious distinction.

That leaves us with benefits by tax revenue to real economy. In most countries in Europe, gambling on sports, poker and casino games are legal and so is online wagering.  Why still most of the EU countries grappling with recession or weak economy for a quite prolonged period of time. Economic argument in support of legalizing gambling is misleading. For a nation aspiring to be a global leader, getting into a discourse of gambling is in itself diverting from other important matters related to setting course towards that goal.  The United States still legally restricts gambling and bans online gambling. The Unlawful Internet Gambling Enforcement Act prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the internet is unlawful under any federal or state law. The argument advanced for the enforcement of this act was “matters of public policy.” And USA is still the richest country in the world. 

“Matters of public policy” brings me to my earlier comment in this article about greater public good.  In a nation with more than 65% of population under-35s and 50% out of which under-25s, legalizing gambling is certainly the last thing that should be pursued.  The vested interests, like lobby representing ICC, and others such elites are pushing for online gambling in India because it has lucrative market for them, particularly with increasing penetration of connected smartphones in India. Legalizing gambling, offline and online, is sure recipe for diverting energies of our young from creative and productive economic activities to wasteful one and destroy chances of India being able to harness unprecedented opportunity of demographic dividend. At this point in time, it is important for India to focus on more important task of creating opportunities for employment, employability and ecosystem where entrepreneurial and innovative minds could unleash economic boom.  Legalizing gambling in a country with so many still under abject poverty, many of whom commit suicide because of burden of debts, is an idea that deserves defenestration at the earliest opportunity.

This is my opinion. I invite yours.