India Focuses on New Laws Amid Match Fixing Scandals

The final month of the Indian Premier League’s Twenty20 cricket tournament, which ended this week, was such a disaster that the Indian Supreme Court was even called in to rule on whether to just cancel the last few matches of the season.

Two players from the Rajasthan Royals team are in jail pending trial while a third is out on bail on charges of having accepted bribes of as much as 6 million rupees ($110,000) at a time to give up runs in coordination with bookies who placed bets that would happen.

More than a dozen others have been arrested in the widening scandal, including bookies and Gurunath Meiyappan, a top official with the Chennai Super Kings, who lost in the tournament final when the Supreme Court declined to call it off. Meiyappan’s arrest for betting on league matches in turn brought his father-in-law, Narayanaswami Srinivasan, into the controversy as he is president of the Board of Control for Cricket in India. The sports ministry called for Srinivasan’s resignation given the apparent conflict of interest with the board’s inquiries into bet fixing, but more ugly details continue to seep out each day.

The uproar has produced widespread calls for action to bring underground betting on the IPL – estimated this season at 400 billion rupees – under control. Attention is focused on two areas: the need for a law that would make it an explicit crime to fix matches and spot bets on results such as the number of runs in a portion of a match, and the merits of making betting on sports legal so that it can be better monitored and regulated.

Therein lies the irony as Vidushpat Singhania, a lawyer leading a campaign by the Federation of Indian Chambers of Commerce and Industry to legalize sports betting, noted this week on a web forum: “It is absolutely strange that betting, a form of entertainment, is considered illegal whereas the actual evil which is match-fixing/spot-fixing is not addressed squarely by a penal provision.”

The government so far is focused on the latter issue amid worries the implicated cricketers may escape legal penalty. The law ministry prepared a draft law on bet fixing which it sent to the sports ministry, which has now sent it back with its own recommendations. A new version is not expected to be ready for another two months. The first draft “was done in a hurry with several glaring loopholes,” an unnamed senior sports ministry official told IANS, a private Indian news agency. The draft provides for a maximum sentence of five years for fixing.

Government officials are more divided on whether to legalize sports betting. PK Deb, sports secretary, was quoted this week by the official Press Trust of India saying that the sports ministry was studying best international practices and that “betting must be legalized”, a position echoed by Farooq Abdullah, renewable energy minister. The sports ministry however put out its own statement saying that it “has made no recommendations to regularize betting” and that “betting is a state subject and cannot be part of a central law.”

The lightly populated state of Sikkim legalized sports betting on its own in 2009, but no operating licenses have been issued with companies unwilling to gamble on whether they could make money just taking bets in the state in the absence of national reforms. “There hasn’t been a solution yet,” says Albert Climent, an online gaming consultant in India.

Punjab meanwhile this week legalized horse race betting and lotteries, both of which are already legal in other states.

As the timeline drags on for the fixing law, national momentum for sports betting legalization may slip away. Singhania though will keep up his drive. He argues that legalization is needed for the government to put in effective systems to monitor betting activity and bookies and detect possible bet fixing. “Betting will continue to exist, [so] you are actually putting the whole society at risk and making sports susceptible to criminal elements,” he said. “Regulation would allow forfeiture of [bookmaking] licenses and therefore revenues for those that break the law.”

Another argument for legalization is financial: regulation would bring taxation that could yield badly needed revenue for the government. One abstract estimate put potential tax revenues at $2.2 billion to $3.5 billion. The danger is that a revenue-focused betting law could partly backfire. Horse race winnings are taxed at 30 percent, which Singhania hints may be keeping much betting activity underground.

Bets on a swift resolution look unwise.