05 January 2016 08:00:48 IST

Is cricket a game of skill or game of chance?

An FAQ on what’s acceptable, and what’s not so, in sports betting

What is significant about the Lodha Committee favouring legalised sports betting?

The Lodha Committee’s recommendation to legalise betting in cricket makes a momentous departure from the paternalistic view that has underwritten discussions on the subject in the past.

The line between legalised betting and gambling has too often been blurred, with even courts taking a moralistic view on the matter. The Lodha Committee notes that betting is a $400-billion industry worldwide, and takes the pragmatic view that regulating it in India is infinitely better than banning it outright.

Of course, the committee recommendation rightly seeks to ringfence the betting process from players, team and match officials and cricket administrators. It also recommends that betting should be restricted to licensed betting houses, and that in the interest of transparency, players should disclose their assets to the BCCI. Additionally, the committee makes no compromises in the matter of match- and spot-fixing, which it says should be made criminal offences.

How big is illegal betting in India?

A 2012 report from FICCI, entitled ‘Regulating Sports Betting in India’, citing a KPMG report titeld ‘Online Gaming: A Gamble or a Sure Bet’, estimated the black market in betting in India to be of the order of ₹300,000 crore a year. If it were legalised, the KPMG report reckons that taxing operators profits (of an estimated ₹60,000-90,000 crore a year) at 20 per cent would yield a tax revenue of ₹12,000-19,000 crore a year.

What do Indian laws say about the whole thing?

The Constitution empowers State governments to legislate on matters relating to gambling and betting. Several State governments have framed their own laws, but most of them draw in spirit from the Public Gambling Act, 1867, which makes gambling illegal when it is made a business to earn profits and commissions.

The Act does not offer a definition of what constitutes ‘gambling’, but one Section in it specifies that the Act does not apply when a game of skill is involved.

Betting on horse racing, which is acknowledged as a game of skill by the Supreme Court, is legal in many States. (Similarly, several court rulings have upheld the card game rummy as a game of skill.) Goa and Sikkim are the only two States to allow casino gambling. Sikkim, in fact, was the first Indian State to legalise online gaming.

What distinguishes a game of skill from a game of chance?

Gaming and gambling laws in India are centred around the concept of ‘game of skilll’ and ‘game of chance’. In 1996, the Supreme Court ruled (in KR Lakshmanan v. State of Tamil Nadu and Anr; AIR 1996 SC 1153) that a game of skill, where although the element of chance necessarily exists, is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player.

Asked to determine if betting on horse-races amounted to gambling or not, the Supreme Court held that betting on horse-racing is a game of skill and hence excluded from the realm of betting and gambling. The court ruled: “We have no hesitation in reaching the conclusion that the horse-racing is a sport which primarily depends on the special ability acquired by training. It is the speed and stamina of the horse, acquired by training, which matters. Jockeys are experts in the art of riding. Between two equally fast horses, a better trained jockey can touch the winning post.”

So, is betting on cricket a game of skill or of chance?

In its judgement in the KR Lakshmanan case, the Supreme Court noted that “betting on horse racing or athletic contests involves the assessment of a contestant’s physical capacity and the use of other evaluative skills”. That rationale can be extrapolated to infer that betting on cricket can be construed as a game of skill, rather than of chance.

What other safeguards are needed to legalise sports betting?

Based on international experience, any effort to legalise sports betting must be accompanied by safeguards to regulate the industry. For instance, betting houses must be required to secure a licence. And a single regulatory body is needed to ensure a unified philosophical approach to betting and consistency of application of laws. Regulations must be framed to protect minors from the betting process. Advertisements that promote sports betting should include information about sources of help to deal with addiction. In Australia, for instance the law requires mandatory warnings to be provided to a player when s/he manifests an alarming gambling trend. Additionally, codes must be devised to require betting-houses to display clear information about the chances of winning and losing. In some countries, regulators prohibit access to live odds at sporting events.