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(/topics/articles/item/establishing-the-optimum-sports-betting-regulatory-system-to-protect-the-integrity-of-indian-sports)
Published 21 November 2018 | Authored by: Kevin Carpenter (/item/kevin-carpenter)
Sports betting is a global phenomenon. Thanks to advances in mobile technology, principally mobile phones, and the
pervasiveness of the internet, online sports betting is one of the world’s fastest growing and most dynamic industries. This
brings with it incredible opportunities economically including vast employment and income to the state from taxation.
However, at the heart of any regulatory system that is adopted has to be the protection of the integrity of sport. Only then will
betting operators, sports and other stakeholders, have faith in a crime-free system which benefits all stakeholders.
India remains one of the largest unregulated sports betting markets. This lack of transparency has partially contributed to a
number of match-fixing and betting integrity issues arising in Indian sport, ranging from cricket and the IPL
(https://www.espncricinfo.com/indian-premier-league-2013/content/story/636375.html)1 (leading to the high profile ‘Lodha
Committee report (https://www.gujaratcricketassociation.com/file-manager/lodha/Lodha_Committee_Report.pdf)’2) and Indian
football (https://www.espn.in/football/minerva-punjab/story/3352401/minerva-punjab-report-match-fixing-approach-made-to-
their-players)3.
However, globally there is a movement by large currently unregulated markets to embrace the inevitable creep of sports
betting, meaning the appropriate regulatory approach (e.g. the United States of America (https://www.legalsportsreport.com
/sportsbetting-bill-tracker/)4), and integrity frameworks, are now at the top of both the political and sporting agendas. These
progressive jurisdictions are in the fortunate position of being able to learn from other countries around the world who have
already put in place effective regulatory and integrity frameworks. Leading countries are objectively viewed to be Great Britain
(England, Scotland and Wales), France and Australia.
This article will set the background by taking a look at the history of sports betting in India, and where we are today, before
briefly set out the approaches taken in Great Britain, France and Australia, the recent Law Commission of India report, and
ending by setting out what the author believes to be the key integrity elements for a successful regulated Indian sports betting
market. Specifically, it looks at:
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History of sports betting in India and shortcomings of the current system of prohibition
Great Britain
France
Australia
Final remarks
The elements which may mean there is sufficient “skill” involved in a particular game include:
Superior knowledge;
Training;
Attention;
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Experience;
Overall, the element of skill must predominate over the element of chance. As a consequence, the test in this regard is called
the “predominance test” or “dominant factor test”.
Despite the federal 1867 Act still being constitutionally valid, since gaining independence in August 1947 (just after the
Second World War), individual states in India have the power to legislate on betting and gambling. However, the regulation of
any kind of sports betting has only happened in one state (Sikkim), and so it is still treated as being illegal throughout the rest
of the country (https://novojuris.com/2017/04/12/development-of-law-related-to-games-of-skill-in-india-focus-on-the-nagaland-
prohibition-of-gaming-and-promotion-and-regulation-of-online-games-of-skill-act-2017/).7
The only exception to the current country-wide prohibition is horse racing, betting on which was made permissible following
the ruling of the Indian Supreme Court in 1996 in the aforementioned Lakshmanan case, where it was said that betting on a
horse race entails evaluating and balancing a number of factors such as the speed of the horse, past performances of the
jockey, etc.
A three-member Committee were entrusted with examining the allegations. As part of the Committee’s Recommendations
(https://www.thehindu.com/migration_catalog/article11476957.ece/BINARY
/JUSTICE%20MUDGAL%20IPL%20PROBE%20COMMITTEE%20REPORT%20%20tilll%20Feb%208)9 they said the
following, “It is most imperative to enact a substantive law making all forms of manipulation of sports, corruption and
malpractices a criminal offence. The law so enacted must be applicable uniformly in the country and should stipulate the
creation of an independent investigating agency, a dedicated prosecuting directorate and a separate judicial forum for
expeditious trials.”
Chapter 9 of the Lodha Committee’s Report focussed on "Match-Fixing and Betting". The Committee stated that the Indian
legislature ought to legalize betting on cricket, whilst at the same time putting these safeguards in place:
Regulatory watchdogs would be necessary to ensure that the betting houses as well as those transacting there are strictly
monitored, failing which their registrations would be susceptible to cancellation.
The Players, Administrators and others closely associated with the sport would be required to furnish the details of their
incomes and assets for the sake of transparency.
Licenses would have to be issued to those placing the bets as well, with age and identification details recorded.
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Strict penal sanctions would have to be imposed on those transgressing the license and other requirements.
In the final proposals of the Lodha Committee Report, Recommendation 14 addressed sports betting in India and stated, “A
recommendation is made to legalize betting (with strong safeguards)…also a recommendation for match/spot-fixing to be
made a criminal offence.”
Having written policies and procedures that explain how the business will meet the following licensing objectives: (i)
keeping crime and disorder out of gambling (e.g. money laundering, match-fixing); (ii) ensuring that gambling is fair and
open; (iii) ensuring that children and vulnerable people are protected from being harmed by gambling; (iv) promoting
social responsibility in gambling.
An application fee is payable when submitting your application, then subsequent annual fees are due to the GC every year.
All gambling businesses which are successful in applying for a licence from the GC, then have a continuing obligation to
comply with the Gambling Act 2005 (https://www.legislation.gov.uk/ukpga/2005/19/contents) and the GC’s Licence Conditions
and Codes of Practice (https://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/LCCP/Licence-
conditions-and-codes-of-practice.aspx) (LCCP).11 There are various parts of the LCCP’s that can be seen to apply squarely
to combating illegal gambling activities and betting-related corruption in sports (https://www.gamblingcommission.gov.uk
/about/who-we-are-and-what-we-do/how-we-regulate-the-gambling-industry.aspx)12, including Conditions as to accepting
"Payments" and "Anti-money laundering". However, the key Condition in this regard is 15.1 on "Reporting suspicion of
offences etc.", in particular:
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When such information is reported by a licensed sports betting operator, it will be fed to the GC’s Sports Betting Intelligence
Unit (https://www.gamblingcommission.gov.uk/news-action-and-statistics/Match-fixing-and-sports-integrity/Sports-Betting-
Intelligence-Unit.aspx) (SBIU), who collect information and develop intelligence about potentially corrupt betting activity
(https://www.gamblingcommission.gov.uk/news-action-and-statistics/Match-fixing-and-sports-integrity/Match-fixing-and-
sports-integrity.aspx) involving sport.13 14
France
Gambling has long been totally prohibited in France, but over the years, several exemptions have been granted, gradually
authorising certain gambling activities. These must be either offered in specific venues or provided by authorised operators
(https://uk.practicallaw.thomsonreuters.com/9-634-4247?transitionType=Default&contextData=(sc.Default)&firstPage=true).15
The online gambling authority, the Autorité de Régulation des Jeux en Ligne (ARJEL) can license operators authorising the
offer of sports betting. ARJEL has full competence to issue licences, enforce online gambling regulations and fight against
illegal gambling websites.
Bets can only be made on certain sports, competitions and types of results, determined by ARJEL following consultation with
the sport federations. The official list is available on ARJEL's website and ARJEL can decide from time to time to add new
competitions or new types of results. Under French law, organisers of sports competitions have rights over the competitions
they organise. Consequently, sports betting operators can only offer bets on the competitions for which they have entered into
an agreement with the organiser of each competition. Any licensed operator requesting one must be offered the possibility to
sign a contract if the operator meets the general conditions set by the organiser. These contracts are reviewed by ARJEL and
the French Competition Authority (Autorité de la concurrence) and must offer similar terms to all operators.
One of ARJEL’s missions is to ensure the integrity of online sports betting operations which can be altered by manipulations
of sports competitions. ARJEL works closely with the French Ministry for sports and the French sports movement
(federations, competitions organizers). Specifically, regarding the prevention, detection and sanctioning manipulations of
sports competitions (https://rm.coe.int/final-report-kcoos-first-study-visit-17-18-january-2017-arjel-docx/168073ed01):
ARJEL ensures the detection of online betting related manipulation of sports competitions online; and
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ARJEL supports the disciplinary actions of sports.16
Australia
Australia has not embraced online sports betting to same extent as the other two counties already mentioned. The main form
of legislation that covers online gambling in Australia is the Interactive Gambling Act 2001. Sports betting is one form of online
gambling that is legal under the Act (https://www.legalsportsreport.com/australia/).17 Recent amendments
(https://www.communications.gov.au/file/25201/download?token=HfZSMwrL) to the Act now prohibit an organisation providing
regulated online sports betting services to Australian consumers unless the person holds a licence under the law of an
Australian state or territory.18
One important caveat that only services that are licensed by an Australian state or territory are allowed to provide such online
wagering services to Australian customers, is that the provision of online "in-play" betting on sporting events to Australian
customers is prohibited under the 2001 Act. The Australian Minister for Communications has clarified the application of the
"in-play" betting rules to cricket matches, golf tournaments and cycling events that take place over multiple days. The effect of
this determination is that online betting on these events is permitted from the end of play or racing on one day to the start of
play or racing the next day (https://www.acma.gov.au/Industry/Internet/Internet-content/Interactive-gambling/in-play-
betting).19
Regardless of the state in which an online sports betting operator is regulated, they will be required to comply with numerous
obligations relating to integrity. For example, they must report suspicious transactions (https://www.addisonslawyers.com.au
/knowledge/So_you_want_an_Australian_Online_Wagering_Licence__This_is_what_you_need_to_know711.aspx) to the
relevant sports governing body and provide that body with information relating to customers and transactions upon request.20
The starting point for the LCI is to consider the reasons why sports betting is currently prohibited in the country, and balance
this against the arguments in favour of legalising sports betting. Like most democratic governments around the world, the
Indian Government principally prohibits activities such as betting to prevent societal harm (e.g. problem gambling). However,
governmental policy may in the present day not be in tune with existing social values, despite morality and religion having a
significant influence over gambling policy historically.
The LCI recognised the illegal and unregulated betting industry in India, which is extremely difficult to curb/control, is
“rampant”. The consequences that ensue as a result include: match-fixing, “black-money” generation and circulation, and
associated crimes, and overall the reduction of national revenue/funds which the LCI say could be used for public welfare.
Legalisation and regulation would importantly create transparency and ensure the detection of fraud and money laundering.
Opining further on spot-fixing and match-fixing, particularly in India’s most popular sport cricket, the LCI believe that if sports
betting is left unregulated, this corruption in sport could further manifest and grow uncontrollably.
The final part of the LCI’s report are their recommendations. In the context of this article, it is worth quoting paragraphs 9.7
and 9.8 of the LCI’s report in their entirety:
“9.7 The existing policy of the Government (National Sports Development Code of India, 2011, etc.), the current socio-
economic atmosphere in the country and the prevalent social and moral values do not encourage betting and gambling.
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 of a complete ban on unlawful
betting and gambling.
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9.8 An 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. Thus, if Parliament or the State Legislatures wish to proceed in this
direction, the Commission feels that regulated gambling would ensure detection of fraud and money laundering, etc.
Such regulation of gambling would require a three-pronged strategy, reforming the existing gambling (lottery, horse
racing) market, regulating illegal gambling and introducing stringent and overarching regulations.”
Upon publication, the media focussed on paragraph 9.8, rather than reporting it in the context of 9.7, and the LCI felt it
necessary to publish a clarifying Press Note (https://lawcommissionofindia.nic.in/reports/press-note-6.7.18.pdf) that stated in
clear terms the LCI consider, first that legalising betting and gambling in India is currently not desirable and a complete ban
must be maintained, only then, if that is not found to be possible, should effective regulation be introduced.22
The other recommendation from the LCI which is key to the future protection of the integrity of Indian sports was that match-
fixing and sports fraud should be specifically made criminal offences, with severe punishments.
providing advice.23
Due to the size of the country, and nature of how it is run and gambling regulation is currently devolved, it may be preferable
to delegate some of these functions to newly established state regulators.
Equally, there should be no restrictions on the betting types which such licensed operators are allowed to offer. This is
because India is part of what is now a global online sports betting market. Therefore, if India were to adopt the same
approach as Australia (i.e. prohibiting in-play betting), this would simply mean Indian consumers would look to offshore
unlicensed bookmakers and the same spot-fixing risks would remain as have arisen previously.
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betting market. Therefore, it must be a condition of having and maintain a license that all operators promptly inform the
national regulator when they become aware of any suspicious activity in the betting markets. Equally, licensed operators must
be compelled to operate with the regulator when they request information as part of an investigation.
This would echo closely what the only international convention on match-fixing (https://rm.coe.int/16801cdd7e)24 envisages
as “national platforms”. The National Platform should (in accordance with Indian law):
serve as an information hub, collecting and disseminating information that is relevant to the fight against match-fixing to
the relevant organisations and authorities;
receive, centralise and analyse information on irregular and suspicious bets placed on sports competitions taking place in
India, and, where appropriate, issue alerts;
transmit information on possible infringements of laws or sports regulations to public authorities or to sports organisations
and/or sports betting operators; and
co-operate with all organisations and relevant authorities at national and international levels, including national platforms
of other countries.
Currently in India, there is a Sports Integrity Unit (SIU), that was set-up in April 2014 under the Special Crime Branch in India,
but its powers are currently limited (/blog/indian-sports-law/item/how-effectively-is-india-s-new-sports-integrity-unit-helping-to-
tackle-corruption) to conducting investigations and then providing a recommendation to the relevant state.25 However, by
widening it’s remit and capabilities in line with the requirements above, the SIU could become India’s “national platform”.
Money is the oxygen of match-fixing, and so regulations must be in place to track the money flows from corrupt betting and
ultimately recover the criminal assets, to ensure the long-term integrity India sports and the sports betting market.
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included / laws must be passed to create the most robust and comprehensive legislative framework possible.
Even before the LCI’s specific recommendation, India has initiated the adoption of specific (https://www.prsindia.org/uploads
/media/draft/Draft%20Prevention%20of%20Sporting%20Fraud%20Bill%202013.pdf) provisions (https://164.100.47.4/billstexts
/lsbilltexts/AsIntroduced/4408LS.pdf) related to match-fixing26 27, with best practice being for such law(s) to include:
both the active and passive manipulation of a sport event as the objective elements;
the concept of any undue advantage resulting from the match-fixing offence, be it material (“gift”, “present”,
“consideration”, “allotment”, “material/pecuniary/financial advantage”) or non-material;
the criminalization of both the manipulation of an entire match/event (i.e. match-fixing) and the manipulation of the course
of a match/event (i.e. spot-fixing);
the introduction of civil asset recovery, whereby even if a criminal conviction fails, the proceeds of the corrupt activity can
still be recovered on a the balance of probabilities;
the protection of witnesses and of reporting persons (in accordance with the legal principles of the jurisdiction).
Final remarks
The LCI concluded their recent report by quoting Justice D.P. Madon that “as the society changes, the law cannot remain
immutable” and that “the law exists to serve the needs of the society which is governed by it.” In the author’s opinion, of all the
needs of society, keeping it corruption free is of paramount importance, and therefore the Indian government must change the
law to adopt the measures set out in this article at the earliest opportunity to protect the integrity of Indian sports to the fullest
extent.
References
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7 Kundu, A. ‘Development of Law Related to Games of Skill in India – Focus on The Nagaland Prohibition of Gaming, and
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8 See Footnote 1
9 Mudgal, M., Rao, L.N. and Dutta, N. ‘A Report on the Allegations of Betting and Spot/Match Fixing in the Indian Premier
League – Season 6’, Justice Mudgal IPL Probe Committee, February 2014 https://www.thehindu.com/migration_catalog
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%20%20tilll%20Feb%208 (https://www.thehindu.com/migration_catalog/article11476957.ece/BINARY
/JUSTICE%20MUDGAL%20IPL%20PROBE%20COMMITTEE%20REPORT%20%20tilll%20Feb%208)
10 See Footnote 2
11 ‘Licence conditions and codes of practice (LCCP)’, Great Britain Gambling Commission, 31 October 2018
https://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/LCCP/Licence-conditions-and-codes-of-
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codes-of-practice.aspx)
12 ‘How we regulate the gambling industry’, Great Britain Gambling Commission https://www.gamblingcommission.gov.uk
/about/who-we-are-and-what-we-do/how-we-regulate-the-gambling-industry.aspx (https://www.gamblingcommission.gov.uk
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/news-action-and-statistics/Match-fixing-and-sports-integrity/Sports-Betting-Intelligence-Unit.aspx
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27 The National Sports Ethics Commission Bill 2016, 10 February 2016 https://164.100.47.4/billstexts/lsbilltexts/AsIntroduced
/4408LS.pdf (https://164.100.47.4/billstexts/lsbilltexts/AsIntroduced/4408LS.pdf)
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Kevin Carpenter (/item/kevin-carpenter)
Kevin is a advisor and member of the editorial board for LawInSport, having previously acted as editor. In his day-to-day work
he has two roles: as the Principal for his own consultancy business Captivate Legal & Sports Solutions, and Special Counsel
for Sports Integrity at leading global sports technology and data company Genius Sports.
kevin.carpenter@lawinsport.com (mailto:kevin.carpenter@lawinsport.com)
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