What Happens Every Year with Between 3 and 10 Lakh Crores of Rupees
As early as in 2012, 85 percent of the respondents in a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) agreed with the statement that betting on sports exists in India, and 67 percent recognized betting as being rampant in sports. In their report, FICCI quoted estimates by KPMG on the desi sports betting market claiming that ₹3 lakh crore (roughly $41 billion) changed hands every year in India in connection with betting on real-world sport events.
More recent estimates quoted by a research paper on the topic by ENV Media attribute a much larger size to the Indian sports betting market amounting to ₹6 lakh crore ($82 billion) or even ₹10 lakh crore ($150 billion). IPL Betting constitutes a large part of the Indian sports betting market and every year millions of Indians bet on IPL matches.
The former figure is from the report provided by the Justice Lodha Committee which was specially appointed to estimate the sector size and to come up with proposals for reasonable measures to place it under control. The latter number is based on the calculations of the International Centre for Sports Security, a Doha-based think tank and lobby group.
Legality of Betting on Sports in India
With a few exceptions like Sikkim and Meghalaya, betting on real-world sport events is banned in all states and union territories in India as it is considered a game of chance. Betting on horse races, on the other hand, is viewed as skill gaming and is permitted in almost all parts of Bharat.
Since the bulk of the laws regarding betting and gambling in India are old, they deal mostly with brick-and-mortar gaming houses, physical presence and exchange of paper banknotes. This leaves online betting in India in a gray legal area and in most cases the only way to bet on sports without breaking the law.
Subsequently, a vast portion of the ₹3 to ₹10 lakh crore worth of the desi sports betting market is essentially a black-market operation using back-alley bookies, encrypted chat groups and messaging apps, or other similar means.
Alleged Involvement in Betting Can Cause Trouble Even for Big Industry Players
Reportedly, IPL betting or cricket sata is estimated at 80 percent of the overall sports betting market in India. Nevertheless, a huge scandal broke in November when CVC Capital won the Ahmedabad IPL franchise and it was noticed that betting companies Tipico and Sisal are featured in CVC’s portfolio of investments.
CVC Capital is an international private equity investment company based in Luxembourg operating $165 billion of committed funds. CVC acquired one of the two new IPL franchises after placing the second highest bid of ₹5,625 crore. The highest bid of ₹7,090 crore came from Sanjiv Goenka’s RPSG Group and secured the Lucknow IPL franchise for the Kolkata-based conglomerate.
Former IPL chairman Lalit Modi was quick to start pointing fingers: “I guess betting companies can buy an IPL team. Must be a new rule. Apparently, one qualified bidder also owns a big betting company. What next? Does BCCI not do their homework? What can Anti-corruption do in such a case?” he tweeted on the very day the news broke.
However, it was soon revealed that it was “the clean” CVC’s Asian fund which had moved to acquire the Ahmedabad IPL franchise. “While its European funds have links with (sports) betting companies, where betting is legal, its Asian fund is clean. And they invested from their Asian fund. That’s the understanding,” said a BCCI Board member after the cricket control body’s annual general meeting in Kolkata in the beginning of December, where the issue reportedly was not discussed.
What if We Regulate Sports Betting?
Saving face from embarrassing situations like the CVC investment scandal is among the lesser issues that regulation on sports betting may resolve, while getting substantial tax revenues from this enormous market is among the more obvious ones.
The ENV Media experts argue that diverting money flows away from the black market will ease the grip of corruption and the accompanying money laundering and match-fixing phenomena. Traceability, including measures like linking player’s Aadhaar card to their betting profile, transactional or income limits on bettors, risk management and responsible gaming mechanisms, and a variety of other measures can be used to bring about and enhance customer protection and address problem gaming.
Figures from the FICCI survey back up this reasoning with 74 percent of the respondents answering that legalizing sports betting will reduce match-fixing, and 83 percent expressing the view that regulating wagering on sports events with proper laws is better than banning it.