The weeks-long shutdown in India induced severe withdrawal symptoms—to a certain extent amongst hopeless drunkards who had been denied whiskey and to a greater extent amongst hapless country administrations who had been denied sales from liquor income. Despite loud protests about morality and the broader public good, most country governments couldn’t wait to profit from the vice again. Similarly, governments are greedily looking the until as ardent smokers return to smoking to their hearts’ content and lungs’ unhappiness. The Reserve Bank of India claims that, the country excise duty on alcohol money is owing for 10-15% of tax sales for most states and is the second or third-largest supplier of tax sales. (It prohibited the selling of alcoholic beverages in Bihar and Gujarat.) We expect governments to earn more than Rs 40,000 crore per year from the sale of tobacco goods. Despite the title, the point of this post isn’t to rant about how horrible governments are by exploiting personal vices.
It is a rallying cry for governments to clean up and profit from a less dangerous private vice—betting and betting (the terms will be used interchangeably here). With India headed for record-low economic growth and tax collections, there has never been a better opportunity to legalize, organize, and profit from a pastime that Indians unquestionably enjoy: betting. How much money is on the line here? It’s difficult to say because the industry is primarily underground and in gloomy nooks. Research published five years ago by the Doha-based organization International Centre for Sport Security claimed that India’s illegal betting sector was worth $150 billion, or roughly 10 lakh crore. India’s GDP was approximately $2 trillion in 2016. The revenue generated by illegal betting was estimated to represent 7.5 %.
The betting situation in India is perplexing. The law distinguishes between skill-based and chance-based games. Former is permitted, whereas the latter is not. The rule, however, is not applied logically. The authorities have devised a scheme to allow betting on horse racing and rummy (a game of skill), but not on cricket or poker (apparently based on chance). As a result, betting on the Indian Premier League (IPL) takes on behind closed doors. We consider every match to be worth a few thousand crore rupees in bets. Consider what would happen if all of this happened lawfully, with bookmakers operating openly and paying their taxes. Lotteries, besides trackside betting on horse races, are permitted in several states. Kerala, for example, collected Rs 1,273 crore in tax revenue from its state-run lottery in 2019-20. (It will tax lotteries at a rate of 28% beginning in March.) Casino gaming is legal in Goa, Sikkim, and Daman & Diu. Fantasy games are acceptable, since they are games of skill rather than chance. Another significant development area is online gaming. Yes, gaming is a state issue.
Overall, India has pushed most bookies and bookmakers to operate in the shadows, while a massive underground economy develops with no oversight and no money for the government. Government. Even the Law Commission urged in 2018 that betting be effectively controlled in order to combat fraud (betting) and money laundering.