No Ball

Gfiles - - COVER STORY - ey VIVEK MUKHERJI

With thou­sands of crores at stake that grease the wheels and cogs of the un­der­ground bet­ting net­works, con­trolled ex­clu­sively by the mafia, there is a com­pelling case for le­gal­is­ing gam­bling and sports bet­ting in In­dia. Af­ter the Supreme Court ac­cepted the rec­om­men­da­tions of the Lodha Com­mit­tee that was set up to clean up cricket in the wake of the 2013 IPL match fix­ing scan­dal, the apex court di­rected the Law Com­mis­sion to ex­plore the leg­isla­tive and le­gal frame­work that would be needed to le­galise sports bet­ting. How­ever, af­ter close to two years of study­ing the is­sue and invit­ing views from var­i­ous stake­hold­ers, the com­mis­sion’s re­port submitted to the Min­istry of Law and Jus­tice on July 5, suf­fers from some se­ri­ous flaws. It’s clear that the re­port was drafted in a hurry and lacks clar­ity of thought

IN the shaded lanes, wind­ing through the labyrinths of the Walled City in Old Delhi, the FIFA World Cup turned out to be a har­bin­ger of achhe din for the shady kings, rooks, knights and pawns, who move the pieces on the chess board of the un­der­ground bet­ting net­works in In­dia. The un­pre­dictabil­ity of the 2018 World Cup in Rus­sia, which saw many big teams head­ing for the exit door early in the tour­na­ment, turn­ing the pre-match odds on its head, made th­ese men dance merry high on lu­cre. Riyaz (name changed), is just one of the hun­dreds foot sol­diers in the vast un­der­ground bet­ting net­work that stretches from Kash­mir to Kanyaku­mari and Su­rat to Silig­uri, which in turn is linked to syn­di­cates in Dubai, Sin­ga­pore and Kuala Lumpur. Riyaz op­er­ates out of a hole in the wall in one of the nar­row lanes in Old Delhi with a faded sign­board that sim­ply says “Money Changer”. At first glance there is noth­ing ubiq­ui­tous about him or his “of­fice”, ex­cept for the four mo­bile phones on the badly-chipped sun­mica counter top. The mo­bile phones, a pocket note­book and ` 10 ballpen are the most im­por­tant tools of his trade. When the odds for a par­tic­u­lar match are opened, which are de­ter­mined by the syn­di­cate based in for­eign coun­tries, the phones start ring­ing as pun­ters call in to place their bets. Th­ese bets are scrib­bled in the note­book in coded lan­guage. For Riyaz, the busiest phase ev­ery evening is when the games got un­der­way. That’s when the dy­namic odds start com­ing in for `in-play’ bet­ting, which is more prof­itable for the book­ies, as well as those who called the right out­come dur­ing a cer­tain pe­riod of play, com­pared to the end of the game re­sult for which the bets are ac­cepted be­fore the start of the match. If the match went into ex­tra time or penal­ties,

things reach a dizzy­ing pitch, which for an un­trained per­son is dif­fi­cult to track. Mean­while, at reg­u­lar in­ter­vals, Riyaz’s ret­inue of ragged run­ners de­posit the slips of pa­per with the des­ig­nated `book­keeper’, Babu bhai, who works out of a tiny room in the cramped quar­ters be­hind Turk­man Gate. Here, Babu in his mid 50s with a fas­tre­ced­ing hair­line, metic­u­lously records the bets in an old-school mu­nim’s (clerk) ledger, once again in codes. (Any re­quest to take a pic­ture of the page is met by a vol­ley of abuse). The in­com­ing slips are de­posited in a metal cash box, where they re­main till the weekly set­tle­ments are made. Th­ese set­tle­ments are al­ways done in hard cash, de­liv­ered or col­lected, at the doorsteps of the bet­ters by a team of trusted couri­ers en­gaged by the net­work. Once the set­tle­ment is done, the slips are burnt, leav­ing no trace of the elab­o­rate bet­ting process that takes place ev­ery day, ex­cept the mu­nim’s ledger, which re­mains in the safe cus­tody of the book­keeper.

IN this age of com­put­ers, in­ter­net and smart­phones, this low-tech, anal­o­gous world of the un­der­ground bet­ting net­works, which op­er­ates purely on trust, might ap­pear to be an an­tithe­sis to the con­ven­tional way of trans­act­ing busi­ness where as­tro­nom­i­cal sums of money is in­volved, but that’s how this sys­tem works seam­lessly be­low the radar of the law en­force­ment agen­cies. Ac­cord­ing to Riyaz and Babu, till the end of the round of 16 on July 3, Delhi alone ac­counted for a turnover of ap­prox­i­mately ` 6,700 crore in il­le­gal bet­ting. By the end of the FIFA 2018 World Cup, the to­tal turnover would be close to an eye-pop­ping ` 25,000-30,000 crore. This is just from off­line bet­ting. If on­line bet­ting data is taken into ac­count, which is also il­le­gal in most parts of In­dia un­der the ex­ist­ing laws, this amount is likely to bal­loon even fur­ther. De­spite the seem­ingly vast sums of money that coursed through the cap­il­lar­ies of this un­der­ground net­work dur­ing the FIFA World Cup, a tour­na­ment in which In­dia had no stake, it’s a mere drop in the coun­try’s gi­gan­tic il­le­gal bet­ting mar­ket. Ac­cord­ing to a note pre­pared by the Fed­er­a­tion of In­dian Cham­bers of Com­merce & In­dus­try (FICCI) in 2012, called Reg­u­lat­ing Sports Bet­ting In­dia: A Vice To Be Tamed, quoted a re­port pre­pared by the in­ter­na­tional con­sul­tancy firm, KPMG, which pegged the mar­ket at a mam­moth ` 300,000 crore. By 2016, ac­cord­ing to the Doha-based In­ter­na­tional Cen­tre for Sports Se­cu­rity

When the odds for a par­tic­u­lar match are opened, which are de­ter­mined by the syn­di­cate based in for­eign coun­tries, the phones start ring­ing as pun­ters call in to place their bets. Th­ese bets are scrib­bled in the note­book in coded lan­guage

By 2016, ac­cord­ing to the Doha-based In­ter­na­tional Cen­tre for Sports Se­cu­rity (ICSS), a sports se­cu­rity and in­tegrity body, the size of the il­le­gal In­dian bet­ting mar­ket swelled to ` 990,000 crore ($150 bil­lion ap­prox)—a growth of 230 per cent in four years—pri­mar­ily driven by cricket

(ICSS), a sports se­cu­rity and in­tegrity body that has worked closely with the In­dian Su­per League, the size of the il­le­gal In­dian bet­ting mar­ket swelled to ` 990,000 crore ($150 bil­lion ap­prox)—a growth of 230 per­cent in four years—pri­mar­ily driven by cricket. This in­cludes both off­line and on­line bet­ting. Given the enor­mous sums of money that grease the wheels and cogs of the un­der­ground bet­ting net­works, con­trolled ex­clu­sively by the mafia and crim­i­nal syn­di­cates, it comes as lit­tle sur­prise that the Law Com­mis­sion re­port that was submitted to the Min­istry of Law & Jus­tice on July 5, makes a help­less pitch to le­gal- ise “gam­bling and sports bet­ting in­clud­ing cricket.” The re­port also marks the cul­mi­na­tion of a process that set the ball rolling af­ter the Supreme Court ac­cepted Lodha Com­mit­tee rec­om­men­da­tions for re­form­ing the Board of Con­trol for Cricket in In­dia (BCCI). It’s now up to the Gov­ern­ment of In­dia to either ac­cept the re­port, and make gam­bling and sports bet­ting le­gal by mak­ing the rel­e­vant laws, or re­ject it.

IT’S a dif­fer­ent mat­ter that most of the rec­om­men­da­tions made by the com­mit­tee, headed by for­mer Chief Jus­tice of In­dia, R.M. Lodha are yet to be im­ple­mented, with the en­trenched power cen­tres in the board en­snar­ing the Com­mit­tee of Ad­min­is­tra­tors (COA), led by the for­mer CAG, Vinod Rai, in a pro­tracted le­gal tug-of-war that is still go­ing on in the apex court. The ninth sta­tus re­port submitted by the COA in the SC on July 2 shows its help­less­ness to make the power bro­kers in the BCCI fall in line. The Law Com­mis­sion re­port at first glance ap­pears to be driven by pro­gres­sive think­ing, de­spite one of the mem­bers, Prof. S. Si­vaku­mar, strik­ing a jar­ring dis­sent­ing note. But a closer read­ing of the con­clu­sions and rec­om­men­da­tions, which have been crunched into just nine pages out the to­tal of 145 pages, re­veal that it’s pit­ted with some se­ri­ous flaws and con­fus­ing ob­ser­va­tions. In fact, it comes across as a piece of doc­u­ment that has been writ­ten in a hurry. It’s worth not­ing that the term of the cur­rent Chair­man of the Law Com­mis­sion, Jus­tice Bal­bir Singh Chauhan is end­ing on Au­gust 31. The sec­tion on con­clu­sions and rec­om­men­da­tions be­ing on a promis­ing note, but in the later para­graphs the con­fu­sion be­comes quite clear, be­fore de­volv­ing into de­featism to pre­vent il­le­gal bet­ting, there­fore, le­gal­is­ing it is the only op­tion. “With the ad­vent of on­line gam­bling and the anonymity that it en­sures, the gam­bling

and bet­ting ac­tiv­i­ties have ac­quired a global pres­ence. It has, there­fore, be­come more chal­leng­ing for coun­tries to mon­i­tor or curb th­ese ac­tiv­i­ties,” it says in the open­ing para­graph (9.1). “The transna­tional char­ac­ter of on­line gam­bling plat­forms calls for a much needed change in ap­proach. With the chang­ing times, there could al­ways be an op­tion to have a relook at the ear­lier ap­proach of a com­plete ban.” It fur­ther goes on to bol­ster its case by cit­ing ex­am­ples how the global gam­bling mar­ket has reg­is­tered rapid growth over the past few years, and how Ja­pan, which is one of the coun­tries to le­galise sports bet­ting more re­cently has be­come the fastest grow­ing mar­ket in the world. It sug­gests that by le­gal­is­ing bet­ting, the reg­u­la­tor will be able to tackle the prob­lem of gam­bling by mi­nors and `prob­lem gam­blers’ and tackle the men­ace of black money that’s gen­er­ated through il­le­gal bet­ting and gam­bling. “It would also en­able the Gov­ern­ment to ef­fec­tively curb the men­ace of black money gen­er­a­tion through il­le­gal gam­bling,” it says.

BUT af­ter lay­ing the ground­work for le­gal­is­ing bet­ting, the con­clu­sions de­volve into a se­ries of self­con­tra­dic­tory state­ments. One gets the feel­ing that the Law Com­mis­sion treated the is­sue of il­le­gal bet­ting akin to mak­ing a pact with the devil, since it’s not pos­si­ble to fight the devil. In para­graph 9.7, it men­tions how the Na­tional Sports De­vel­op­ment Code 2011 wants a blan­ket ban on bet­ting: “Ac­cord­ingly, the Com­mis­sion reaches the in­escapable con­clu­sion that le­gal­is­ing bet­ting and gam­bling is not de­sir­able in In­dia in the present sce­nario. There­fore, the State au­thor­i­ties must en­sure en­force­ment

The sec­tion on con­clu­sions and rec­om­men­da­tions be­ing on a promis­ing note, but in the later para­graphs the con­fu­sion be­comes quite clear, be­fore de­volv­ing into de­featism to pre­vent il­le­gal bet­ting, there­fore, le­gal­is­ing it is the only op­tion

of a com­plete ban on un­law­ful bet­ting and gam­bling.” But in the next para­graph it men­tions that since it’s not pos­si­ble to con­tain the men­ace, it’s bet­ter to le­galise bet­ting. “How­ever, in­ca­pa­bil­ity to en­force a com­plete ban has re­sulted in ram­pant in­crease in il­le­gal gam­bling, re­sult­ing in a boom in black-money gen­er­a­tion and cir­cu­la­tion. Since it is not pos­si­ble to pre­vent th­ese ac­tiv­i­ties com­pletely, ef­fec­tively reg­u­lat­ing them re­mains the only vi­able op­tion,” it says. While mak­ing the rec­om­men­da­tions, the re­port sug­gests a three-pronged strat­egy that in­volves “re­form­ing the ex­ist­ing gam­bling mar­ket (lottery, horse rac­ing), reg­u­lat­ing il­le­gal gam­bling and in­tro­duc­ing strin­gent and over­ar­ch­ing reg­u­la­tions.” It’s rather cu­ri­ous that the Law Com­mis­sion would even sug­gest reg­u­lat­ing the il­le­gal bet­ting mar­ket. Be­cause, it’s pre­cisely due to the in­abil­ity of the law en­force­ment agen­cies to de­tect, catch, pros­e­cute and pun­ish those in­volved with il­le­gal bet­ting that has re­sulted in the boom­ing un­der­ground bet­ting net­works. In the rec­om­men­da­tions, the re­port sug­gests that since on­line bet­ting is on as­cen­dency, rel­e­vant law needs to be en­acted by the Par­lia­ment. “Since on­line bet­ting and gam­bling are of­fered and played over me­dia (tele­phones, wire­less, broad­cast­ing and other like forms of com­mu­ni­ca­tion) cov­ered un­der En­try 31 of List I of the Sev­enth Sched­ule to the Con­sti­tu­tion, the Par­lia­ment has the leg­isla­tive com­pe­tence to en­act a law(s) deal­ing with the same,” it says. It also rec­om­mends that all bet­ting ac­tiv­ity in In­dia should be car­ried out only by li­censed op­er­a­tors.

SINCE gam­bling re­mains as a state sub­ject, it will be up to the state whether to adopt the pro­posed model law or come up with their own laws, which is a sen­si­ble ap­proach. “In case leg­is­la­tion is made un­der Ar­ti­cle 252, States other than the con­sent­ing States will be free to adopt the same. Be­ing a State sub­ject un­der List II of the Sev­enth Sched­ule to the Con­sti­tu­tion, it is need­less to say that State Leg­is­la­ture(s) is com­pe­tent to en­act the re­quired Law for the State(s) con­cerned, while duly tak­ing note of the Na­tional Pol­icy on gam­bling etc., and other le­gal con­sid­er­a­tions,” reads the re­port. The re­port also rec­om­mends a host of changes and amend­ments that need to be made other re­lated laws to le­galise gam­bling and sports bet­ting. Th­ese in­clude For­eign Ex­change Man­age­ment Act 1999 for al­low­ing For­eign Di­rect In­vest­ment “in the casino/on­line gaming in­dus­try, law­fully per­mit­ting tech­no­log­i­cal col­lab­o­ra­tions, li­cens­ing and brand shar­ing agree­ments, etc.”, In­for­ma­tion Tech­nol­ogy (In­ter­me­di­ary Guide­lines) 2011 for host­ing and trans­mit­ting on­line gam­bling con­tent, Na­tional Sports De­vel­op­ment Code 2011 and In­dian Con­tract Act 1872 to name a few. The re­port places due em­pha­sis on

pro­tect­ing the so­ci­ety at large from the ill-ef­fects of bet­ting and shield­ing eco­nom­i­cally vul­ner­a­ble sec­tions of the pub­lic and chil­dren be­low the age of 18. As such, it rec­om­mends that there should re­stric­tions on the num­ber of bets a per­son can place, which could be de­cided on a monthly, half-yearly or yearly ba­sis and no one should be al­lowed to put more than 10 per­cent of their earn­ings into gam­bling or bet­ting based on their in­come-tax re­turns. To achieve this it rec­om­mends that “all bet­ting and gam­bling transactions should be linked to the op­er­a­tor’s as well as the par­tic­i­pant’s/player’s Aad­haar Card/PAN Card,” and make all bet­ting trans­ac­tion cash­less. It fur­ther states that peo­ple with Jan Dhan ac­counts into which the gov­ern­ment di­rectly trans­fers sub­si­dies should not be al­lowed to bet. How­ever, there is enough ev­i­dence avail­able in the pub­lic do­main that peo­ple have found ways to get around such re­stric­tions. At present, on­line bet­ting and mak­ing pay­ments in for­eign cur­rency is banned. Yet, the pun­ters with the help of book­ies have man­aged to open sub-ac­counts on for­eign bet­ting sites that al­low them to in­dulge in their pas­sion. The transactions car­ried through the hawala chan­nels en­able the bet­ters to pay in In­dian ru­pees, who then park for­eign cur­rency in off-shore ac­counts.

THE rec­om­men­da­tions are rid­dled with even more glar­ing omis­sions. For ex­am­ple, it dis­misses the dark­est side of the bet­ting world, which is match­fix­ing, in just two lines. “Match-fix­ing and sports fraud should be specif­i­cally made crim­i­nal of­fences with se­vere pun­ish­ments,” it says. At the core of the de­bate re­gard­ing le­gal­is­ing sports bet­ting lies the well-es­tab­lished link be­tween match-fix­ing and bet­ting. It’s a fall­out from the 2013 IPL scan­dal in which three play­ers, S.Sreesanth, Ankit Cha­van and Ajit Chan­daliya, along with a cou­ple of team own­ers were al­legedly in­volved in fix­ing matches for the ben­e­fit of the book­ies. The lengthy in­ves­ti­ga­tions led by Jus­tice Mukul Mud­gal led to the for­ma­tion of the Lodha Com­mit­tee to look into the sor­did saga. The three play­ers were ac­quit­ted by a Delhi Court on tech­ni­cal grounds be­cause they could not be pros­e­cuted un­der to the ex­ist­ing laws as they could not deal with the pe­cu­liar­i­ties aris­ing out match fix­ing. It was then the idea of en­act­ing the Pre­ven­tion of Sports Fraud Bill 2013 (PSF) was mooted by the Min­istry of Sports and Youth af­fairs. The Law Com­mis­sion re­port in the sec­tion called pend­ing leg­is­la­tion notes that the Pre­ven­tion of Sports Fraud Bill 2013 and the Na­tional Sports Ethics Com­mis­sion Bill 2016, in­tro­duced as a pri­vate mem­bers bill by BJP MP and for­mer Pres­i­dent of the BCCI, Anurag Thakur is pend­ing the Lok Sabha. Both

th­ese bills are aimed at the pre­vent­ing sports frauds like match fix­ing, dop­ing and age fraud. The PSF clearly de­fines sports fraud as any at­tempt to ma­nip­u­late the re­sult, ir­re­spec­tive of whether it has been achieved or not, for eco­nomic gains, wil­fully un­der­per­form­ing for eco­nomic or any other ad­van­tage and be­ing in pos­ses­sion of in­sider in­for­ma­tion which has been dis­closed to an out­sider for eco­nomic gains. The bill pro­poses to make all such of­fences as pun­ish­able crime. But in its rec­om­men­da­tions, the Law Com­mis­sion re­port is con­spic­u­ously silent on the ab­so­lute ne­ces­sity of hav­ing the two cru­cial pieces of leg­is­la­tion in place even be­fore any dis­cus­sion on le­gal­is­ing bet­ting can even be­gin. With the both the bills ly­ing in cold stor­age, it’s fu­tile to even think of le­gal­is­ing sports bet­ting. Yet an­other glar­ing omis­sion is the lack of any frame­work for a bet­ting reg­u­la­tor to op­er­ate. To pre­vent bet­ting frauds and fix­ing, early de­tec­tion sys­tem plays very vi­tal role. For ex­am­ple, in the UK, which the world’s big­gest le­galised bet­ting mar­ket, the Bri­tish Gam­bling Com­mis­sion is the apex body which keeps a watch on the bet­ting in­dus­try through its in­ves­tiga­tive arm called the Sports Bet­ting In­tel­li­gence Unit (SBIU). In the Law Com­mis­sion re­port, such a role has not been de­fined clearly nor does it say what kind in­ves­tiga­tive and prose­cu­tion pow­ers it should have. If it ex­pects the ex­ist­ing arms of the law and eco­nomic of­fence watch­dogs to carry out this role, then it’s a non-starter be­cause to in­ves­ti­gate an in­dus­try which sees mas­sive churn of money al­most on a daily ba­sis needs a ded­i­cated agency. An­other fal­lacy that the re­port suf­fers from is that it fails to out­line what kind of bet­ting prod­ucts should be al­lowed in the mar­ket. In the at­tached an­nex­ure, it says that only end re­sult bet­ting should be al­lowed like horse rac­ing, where the bets close be­fore the start of the race. If that is the case, then le­gal­is­ing sports bet­ting is a non-starter be­cause most of the bets that are placed are on `in-play’ stakes. Var­i­ous global stud­ies have shown that re­stric­tions on bet­ting prod­ucts have forced peo­ple to turn to il­le­gal bet­ting even in mar­kets where it’s le­gal.

IT’S one thing to take the philo­soph­i­cal high ground that had bet­ting reg­u­la­tions were in place Yud­histhra would not have staked his wife and broth­ers in a gam­ble, but it’s al­to­gether a dif­fer­ent ket­tle of fish when one is deal­ing with thou­sands of crores of ru­pees of black money mov­ing in and out of the well-oiled ma­chine that drives il­le­gal sports bet­ting. The re­port clearly suf­fers from clar­ity of thought while it was be­ing drafted. In its present form, it will do noth­ing to dis­man­tle the un­der­ground bet­ting net­work. On the con­trary, if the gov­ern­ment pro­ceeds fur­ther on the ba­sis of this re­port, it will be weapon­is­ing il­le­gal bet­ting op­er­a­tions.

At present, on­line bet­ting and mak­ing pay­ments in for­eign cur­rency is banned. Yet, the pun­ters with the help of book­ies have man­aged to open sub-ac­counts on for­eign bet­ting sites that al­low them to in­dulge in their pas­sion. The transactions car­ried through the hawala chan­nels

Jus­tice Mukul Mud­gal

RM Lodha, for­mer Chief Jus­tice

S Sreesanth

Ajit Chan­daliya

Ankit Cha­van

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