The Law Commission on Thursday recommended that gambling and betting on sports, including cricket, be allowed as regulated activities taxable under the direct and indirect tax regimes and used as a source for attracting foreign direct investment (FDI).
The panel, which submitted its report to law minister Ravi Shankar Prasad, said that as it was not possible to completely prevent these activities, “effective regulation” seemed to be the only viable option
According to a PTI report, the commission also seeks stringent measures and make the entire operation a cashless transaction with the compulsory application of PAN and Aadhar to curb any chances of money laundering.
The commission’s report, Legal Framework: Gambling and Sports Betting including Cricket in India, recommends a number of changes in the law for regulating betting and generating tax revenues from it.
Parliament may also enact a model law for regulating gambling that may be adopted by the states or in the alternative, Parliament may legislate in the exercise of its powers under Articles 249 or 252 of the Constitution. In case legislation is made under Article 252, states other than the consenting states will be free to adopt the same, it stated.
The commission has also recommended amending the laws regulating forex and India’s FDI policy to allow investments in the casino and online gaming industry.
“The Foreign Exchange Management Act-1999 and the Foreign Direct Investment (FDI) policy may be suitably amended to encourage FDI in the casino/online gaming industry, lawfully permitting technological collaborations, licensing and brand-sharing agreements,” the report further stated.
The commission feels allowing FDI in the industry would bring substantial amounts of investment to those states that decide to permit casinos, propelling the growth of the tourism and hospitality industries, while also enabling such states to generate higher revenue and employment opportunities.
Significantly, the commission recommended that gambling be classified on the basis of the stakes involved, with the government regulator deciding how much money people from “lower-income groups” can put on the stake. High stakes should only be allowed for people who can afford it, it said.