Sports Law

Sports Betting: An analysis with reference to Judicial Aspects

Authored & Co-Authored by Manvee & Joysree

Introduction

Betting is said to be action of gambling, money, possessions, time, or something else on the outcome of the something, such as a game or race. Betting is often misunderstood with gambling but both are different in nature. Betting is something where the person placing a stake has some kind of probability or knowledge of what might be the result, which is not in the case of gambling. In gambling, the winning and losing both depends upon the luck and the person placing stake may not have the any idea of outcome. Around 5000 years ago, betting took place in Mesopotamia, where a person places a stake on some contingent event, thereby winning or losing the stake. However, they also have a probability of winning something. In most cases, on winning, they get more than the stake placed.

The objective of this study is to bring out a comparison between the laws related to betting and gambling in USA, UK and India. The research methodology used here is comparative study.

Types of Betting

Betting exists in hundreds of forms, namely- Table games, non-casino, arcade, electronic gaming, bingo, lotteries etc.

The most common form of betting are:

·       Card game in Casino style

·       Six-side dice games

·       Roulette

·       Poker

·       Horse Racing

·       Bowling, skeet ball, pool, and some video games

·       Sports such as cricket, soccer/football, basketball, boxing, etc.

A Brief History of Sports Betting

From Games to Sports

Sports betting has been existing from a long period of time in history. The Greeks, the inventor of Olympic games, had a common culture among themselves to bet with regards to the winner. Under the Ancient Regime, gambling was a passion for people, as said by Georges Vigarello.  It takes the form of betting games or prize games. The first, bets, are made between people from the same social world i.e. between farmers or between nobles.

During the Industrial Revolution, horse betting was organised by bookmakers. These bets gained popularity in the United Kingdom in the 16th and 17th centuries. But only horse owners were allowed to bet on the results of these bets, known as matches. If these bets had been originally private, it would gain more and more public attraction and therefore these bettings would have increased in numbers. The major promoters of these races were Innkeepers and pub owners, who naturally became first bookmakers and they organised a form of race, where people had to run from one church tower to another, jumping over all obstacles in path.

The British government had banned gambling in pubs because the availablity of alcohol in pubs might create some unworthy consequences. As a result of which, many betting shops were established along with the Gambling Act in 1845. Parliament then went back and suppressed the Betting Houses Act. As the report given by Senate on gambling in France reminds us of the law of June 2, 1891 which legalizes betting on horse races and establishes the principle of mutualization.

From horses to other sports

The term “pool” has been referred to a game of cards played for collective stakes, deriving from the French word “hen”, which means “a weng poultry”. Here the idea of playing for money was found. In the early 1920s, the term “football pool” was coined by Forrest.

In Liverpool, John Moores found a retail company named Littlewoods in 1923, where the most famous game was the “Treble Chance”, where players had to choose to bet on 10, 11 or 12 football matches for that particular weekend. In some rare cases, if a match could not take place due to some natural phenomena, a panel of experts appointed by Littlewoods had to model the match, and provide a forecast. After the World War II, there was an arrival of so called 1×2 formulas where the players had to make a prediction of the weather, in a set of 12 to 15 games and the home team would win, lose or draw. In the 1980s, Liverpool was one of the largest private companies in Europe that time.

Laws governing Betting in Different Jurisdictions

United Kingdom

Initially governed by the Public Gambling Act, 1845, the United Kingdom’s gambling and betting industry is governed by the United Kingdom Gambling Act, 2005. Section 3[1] and Section 6[2] of the Act. In addition it defines a game of chance as something which includes an element of chance and skill or a game involving an element of chance that can be eliminated by remarkable skill but does not include a sport. The Secretary of State has full discretion to declare a specific act as a game of chance for the purposes of this section.

Betting has been defined under Section 9 of the Act as accepting a bet on the outcome of a race, competition or other contingent even, thereby ignorant about the truth or fraud of the outcome. This broad definition also includes betting on sports within its ambit.

Therefore, the Act regulates gambling and betting practices in the country and aims to protect children and other vulnerable persons from being harmed or exploited by gambling. To achieve this objective, the Act covers a wide range of practices associated with betting and gambling, for example, paying an individual to deliberately lose a game and to profit from a bet placed on the result of the game124. Section 50 of the Act allows persons above the age of eighteen to take part in all gambling activities and persons above the age of 16 are allowed to play only the lotteries and private or non-commercial betting and gambling.

Betting in the sport of cricket is regulated in the United Kingdom by the England and Wales Cricket Board Rules along with the 2005 Act.

Britain’s Gambling Industry is one of the largest in the world which yields around £13.8 billion and continues to increase in size. Also, online gambling is the largest gambling sector in Britain. In 2016, a total of £208 million was raised for social causes through large society lotteries, recording a 10.5% increase over the previous year.

United States of America

In United States, gambling laws are comparatively less restrictive than that of UK. Gambling is regulated by three sets of regulations i.e. at local level, state and federal level.

Several Federal Online Gambling laws have been enacted and regulated:-

1.The Interstate Wire Act, 1961

2. International Travel Act, 1961

3. Interstate Transportation of Wagering Paraphernalia Act, 1961

4. Illegal Gambling Business Act of 1970.

5. The Professional and Amateur Sports Protection Act, 1992 (PASPA).

6. The Unlawful Internet Gambling Enforcement Act, 2006 (UIGEA).

  1. The Federal Wire Act penalises the act of placing a bet/or assisting in placing a bet knowingly by using wire communication facility for exchange of foreign commerce domain.
  2. The Travel Act 138 aims to punish anyone who travels in interstate or foreign commerce, uses any facility in interstate or foreign commerce, or uses the mail, with intent to distribute the proceeds of any business communication which includes  unlawful  activities  or money laundering, or to otherwise establish or carry on any business enterprise involving unlawful activities and then distributes the proceeds from any business enterprise involving gambling or from any act identical to money laundering, or facilitates the promotion, establishment, or carrying on of any business enterprise involving unlawful activities or any act identical as money laundering.
  3. The Unlawful Internet Gambling Act regulates online gambling in the United States of America. It declares that no person engaged in business of betting or wagering may knowingly accept in connection with Unlawful Internet any draft[3]. Unlawful Internet Gambling is defined as knowingly transmitting a bet or wager by any means which involves the use, of the Internet fully or partly where such bet lacks legality and violates the state law or Federal law.

Judicial interpretation of betting in India

Section 30[4] of The Indian Contract Act, 1872[5] governs gambling and betting provisions of the country, which declares their legality in the country.

Recommendation of Law Commission Report of India, 2018

The 276th report by Justice B.S. Chauhan (head of the Law Commission of India) on legalizing betting in India had been directed by the Supreme Court to regulate gambling and betting laws in the country.

The suggestions thus provided by the Law Commission of India are:

  1. Regulating Gambling and Betting: The State may enact legislation for regulating betting and gambling. Under Article 249 or Article 252, the Parliament of India can also bring a model law which the State can adopt for regulation of betting and gambling.
  2. Regulations governing Gambling and Betting: There should be the issuance of licenses for legalizing such activities.
  3. Prohibited Persons:  There are three categories of people who should not be allowed to indulge in the activities of gambling and betting. They are minors, people receiving subsidies from the Government and person who are not allowed to make any payments under the Income Tax Act and Goods and Service Tax Act.
  4. Amendments to FEMA[6]: The Foreign Exchange Management Act and the Foreign Direct Investment Policy should be amended to encourage Foreign Direct Investment in Casino or Online Gaming Industries, which would help in increasing revenue for tourism.
  5. Amendments to IT rules: Supported by the amendments to the IT rules, the intermediaries are allowed to host and transmit contents about gambling in those states where it is legalised.
  6. Match-fixing and Sports fraud: Match-fixing and Sports like baseball[7], basketball[8], cricket[9], football[10] etc. are supposed to be criminalised and severe punishment shall be awarded.

Gambling and betting in Indian Scenario

Historical background

From Indian History and Indian Mythology several instances of Betting and gambling can be seen easily. We get to know about gambling and betting in from Ramayana and Mahabharata. It can be seen for instance that Yudhisthira, who was the eldest son of Pandu, had an itch for gambling. In fact he was seen losing his kingdom, his wife and his brothers in the ‘game of dice’. The craze for gambling in ancient India can also be seen in the hymn of Atharva Veda and Rig Veda. The Narada smriti suggests that gambling is an amusing sport and it should not be criminalized. Chanakya gave a contradicting statement regarding gambling. Chanakya said that “Gambling is and criminal activity and hence it should be regularized and people who violated the regulations of the gambling should be penalized accordingly.”

Indian laws

S. Sreeshant v. Board of Control for Cricket in India[11]

Facts

On 9th May,2013, an Indian Premier League took place between Rajasthan Royals and Kings XI Punjab, where the BCCI, along with the local police cell had put charges against an acclaimed Indian cricketer, S.Sreeshant that he had been found indulged in exchange of  Rs.10,00,00 for conceding 14 runs in the second over and imposed a life time ban on his career. He then filed a civil suit against BCCI in the Kerala High Court, thereby challenging the allegations put on him. The court too went in favour of the BCCI. He then further filed an appeal in the Supreme Court asking to set aside the judgement by the lower court. and there his lifetime ban was repealed and was reduced to 7 years. Justice DK Jain, on 7th August, 2019 said that his ban would come to an end on 13th September, 2020.

The charges levelled against Sreesanth are related to violations of anti-corruption codes[12].

Held

The Supreme Court held that his lifetime ban had been repealed and was reduced to 7 years. Justice DK Jain, on 7th August, 2019 said that his ban would come to an end on 13th September, 2020.

Manish D Bajaj v. State of Madras[13]

The incident had taken place on 2013, when there was an IPL match between Kings XI Punjab and Delhi Daredevils. Deepak Bajaj, an assumed bookie was allegedly found by police working on his laptop by accessing cricket bety live.com where he was betting. After confessions and interrogations, 15 other people who were indulged in that betting was arrested by police, along with the confiscation of his laptop, mobile phone and a cash of Rs. 50,00,000 involved in the bet. Manish Bajaj, the petitioner i.e. the son of Deepak Bajaj filed a suit for the return of those confiscated properties of his dead father.

At the end, only the laptop & phone was returned but not Rs. 50,00,000.  

Recent News On Betting Scandal In India & World in 2018-2020

4 arrested on charge of indulging in betting[14]

The City Task Force police had raided an apartment near Gudlavanipelam (Andhra Pradesh) on presuming a cricket bet going on amongst a group of people. The police successfully caught four people betting on the One Day International match and they are – P. Satya Seshagiri Rao, A.V Janaki Gangaram, V. Narasimha Raju and A.K.S Venkata Tataji. Three communicator setup boxes containing mobile phones, laptops and LED TVs were seized by the police along with ₹5900 cash and other betting equipments.

One more batsman arrested in cricket betting scamming[15]

In 2018, batsman Nishanth Singh Shekhawat was arrested by The Central Crime Branch who was suspected to be in connection with the Karnataka Premier League (KPL) match fixing case. He had last featured in a KPL match in 2018 for Shivamogga Lions.

The police had found him to be linked between bookies and the coach of Bengaluru Blasters bowling coach, Vinu Prasad who was also arrested. A senior police officer thus remarked that Nishanth Was found indulged in transaction of money between bookies and Vinu.

More than 135 tennis players, along with the top rank player, implicated in International betting scandal[16]

German media, in a daily newspaper Die Welt, reported that a male player in the top 30 of ATP ranking was allegedly involved in a betting scandal which involved hundreds of small bets on fixed games earning profit of around 10,000 Euros, as said by the Belgian prosecutor.

4 People involved in betting in Australian T20 Cricket League and arrested[17]

The Central Crime Branch (CCB) arrested a gang of 4 people named Girish, Shivaraj, Dilip Kumar, Shyam Sundar for being involved in a cricket betting racket and seized Rs. 1.5 lakh along with laptops and phones and was arrested.

The police had conducted a raid on the house of Shyam Sundar i.e. Muddinapalya, Bengaluru and were found betting between Melbourne Star and Renegades.

Social and Cultural aspects of betting in India

State of Bombay v. R.M.D. Chamarbaugwala[18]

Issue: Does gambling qualify as a ‘trade, commerce or intercourse’?

Facts: The present petition related to the validity of the Bombay Lotteries and Prize Competitions Control and Tax Act, 1948 (‘Act’). The impugned Act (as the title suggests) was enacted to control and levy tax on lotteries and prize competitions in the State of Bombay.[19]

Held: Gambling or conducting the business of gambling is extra-commercium and hence not included within the meaning of ‘trade, commerce or intercourse’.

The Public Gambling Act, 1867 is a central legislation that prohibits all games of chance except lotteries and game of skill. Only the Central Authority or Government is allowed to legislate on lotteries organized by the Government of India or by the any of the State Government.

Impact of Betting in Indian Economy

Betting and Gambling, however are aspects related to luck and certainty, also affects the economy of the country. According to recent research and development there has been a consistent increase in the casinos which has many negative effects such as bankruptcy, crime, personal health issues, divorces, etc.

Along with the above stated negative effects, a greater and a wider effect of increased betting is poverty and unemployment. Due to the increased amount of betting, people indulge more in the stake rather than going to work, ultimately unemployment arises due to the money earned being spent on stakes and this gives rise to poverty. People ultimately reach the level of starvation due to poverty and there exists a great range of crimes in search for the source of money.

Analysis & Conclusion

Betting and Gambling are thus not the same thing at a time. Gambling is a wider term than that of betting. In other words, all gambling can be considered as betting but all betting cannot be gambling. The impacts and consequences of gambling and betting are adverse. They destroy the lives of people undoubtedly but at the same time they also serve as a source of money-making in for large amount of people worldwide.

The legality and illegality of gambling have been declared through a lot of legislations in various countries. In India, USA and UK, betting and gambling laws have been regulated by many enacted legislations approved by their centre in order to control betting and gambling and corruption. In India, The Supreme Court said that gambling cannot be banned or criminalised fully because it is a source of money-making to a lot of people, although it destroys the lives of people[20]. In other jurisdictions like USA and UK, there are separate compact legislations which are enacted to regulate betting. It is neither fully abolished nor it is fully permitted, various conditions and criteria have been laid down for undergoing betting. As according to the Supreme Court, betting can also be a source of money making and earning, according to me, there should be the adoption of the UK and US betting laws which carries a neutral character.


[1] defines gambling as an inclusive of gaming, betting and lottery

[2] gambling as playing a game of chance for prize/reward

[3] Govt. of India, Law Commission of India, Report No. 276, Legal Framework: Gambling and Sports Betting Including in Cricket in India, July 2018 http://lawcommissionofindia.nic.in/reports/Report276.pdf

[4] Agreements by way of wager, void- Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.

[5] UNIVERSAL’S, The Indian Contract Act, 1872 (9 of 1872) with Model Specimens of Damages on Breach of Contract and execution of Deeds by Agents Bare Act with Short Notes 19 (Lexis Nexis 2017)

[6] Legal Framework: Gambling and Sports Betting Including Cricket in India, https://prsindia.org/report-summaries/legal-framework-gambling-and-sports-betting-including-cricket-india

[7] The Black Socks Scandal (1919 World Series)

[8] Tim Donaghy (2007), where a NBA referee was caught by the FBI for betting on games even in which he had    referred in.

[9] Match fixing scandal (2000), where the South African captain had publicly announced his indulgence in betting.

[10] Italian Serie A Scandal (2006) , where the teams were seen picking up favourable referees.

[11] 2019 SCC OnLine SC 383, March 15,2019

[12] This contains provisions in relation to the Indian Premier League, a professional Twenty-20 cricket league   constituted by teams representing Indian cities.

[13] Crl.M.P.No.1776 of 2019

[14] Staff Reporter, 4 arrested on charge of indulging in betting, The Hindu (March 04, 2019,01:16 AM), https://www.thehindu.com/news/national/andhra-pradesh/4-arrested-on-charge-of-indulging-in-betting/article26425909.ece#

[15] Special Correspondent, One more batsman arrested in cricket betting scamming, The Hindu (Nov. 04, 2019, 23:14 PM), https://www.thehindu.com/news/cities/bangalore/one-more-batsman-arrested-in-cricket-betting-scam/article29891834.ece

[16] AFP, Top-30 players involved in tennis betting: reports, The Hindu (Dec. 16, 2019, 23:01 PM), https://www.thehindu.com/sport/tennis/top-30-player-involved-in-tennis-betting-reports/article30323516.ece

[17] Special Correspondent, 4 People involved in betting in Australian T20 Cricket League and arrested, The Hindu (Jan. 11, 2020, 21:18 PM), https://www.thehindu.com/news/cities/bangalore/four-people-involved-in-australian-t20-cricket-league-betting-racket-arrested/article30545252.ece

[18] (AIR 1957 SC 699)

[19] In this case The State of Bombay was dissolved with the formation of Maharashtra and Gujarat States on May 1, 1960

[20] Kishan Chander and Others v. State of Madhya Pradesh, 1965 AIR 307 1964 SCR (1) 765

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