Why regulating online gambling is better than banning it
Premium- Booming online cricket betting proves that ban on gambling is not effective at all
Ever heard of 1XBat, the title sponsor of the ongoing Sri Lanka–Pakistan cricket series? It’s supposedly a cricket news website. Nothing unusual about a new entity sponsoring a major sporting event. After all, troubled ed-tech decacorn Byju’s had spent hundreds of crores of rupees of venture capital money getting its name on the Indian cricket team’s jersey, sponsoring IPL franchise Kolkata Knight Riders, and even the upcoming soccer World Cup in Qatar.
But 1XBat is not fuelled by venture money. Instead, it’s a not-so-thinly-veiled surrogate for online betting major 1XBet. The Cyprus-registered online betting site counts cricketers like Dwayne Bravo among its brand ambassadors. Suresh Raina can be seen endorsing the sports blog on the betting site's home page. It is a familiar presence for India’s estimated 140 million-plus online betting community.
In fact, cricket-crazy Indians are such a major market for it that it even sponsors minor league cricket in the US to reach the sub-continental diaspora there.
India, in fact, is one of the world’s fastest growing markets for online gambling of all forms, from betting on sports to online card and casino games. While there are no official statistics available, India’s gambling industry is estimated at anywhere between $60 billion and $150 billion per year.
While most forms of gambling are illegal in India, the online gambling industry, which includes online betting and real money gaming, the rapidly growing fantasy sports segment, already has more than a 100 million regular users.
According to a study by Mybetting.in, there are more than 140 million Indians who bet regularly online. This number peaks to more than 370 million during high-engagement events like the IPL. There are as many as 37 online betting sites which operate in India. Although all are registered abroad and housed on overseas servers, by accepting payment in rupees using platforms like UPI, Paytm, and PhonePe, they have made rapid strides in penetrating in India.
This is just the sports-centric online betting market in the country. Given the fact that internet penetration is still short of the potential it can go to, the total offline betting market, including India’s famous ‘satta’ market (which takes bets on anything from election results to when or how much it will rain on a given day) is a multiple of this number, with estimates exceeding ₹10 lakh crore.
This is why online betting platforms are rushing to catch the eye of the Indian gambler. And what better way to do this than through cricket, which industry estimates say enjoys around 90-95 per cent share of all online betting in India. And, since they cannot officially advertise what is officially an illegal activity, this has led to a rash of surrogate sites.
In fact, the sponsors of the popular Tamil Nadu Premier League cricket—Trichy-Sat sport, Tiruppur-Dafa news, Kovai-playon99, Chepauk-parimatch and Salem-sky exchange—all are surrogates for online betting sites.
Surrogate advertising, of course, is not new. Cigarette manufacturers have been doing it for decades, with tobacco major ITC’s diversification of its Wills brand of cigarettes into fashion apparel and beauty proving so successful that it is now a standalone brand in its own right.
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Another industry which is restricted from advertising as it is considered a “sin" good, liquor, also heavily uses surrogate advertising. Fugitive liquor baron Vijay Mallya at one time had an airline, a famous pin-up calendar, mineral water, club soda, music CDs and even glasses, all sporting his beer brand Kingfisher’s name.
All this, of course, springs from the same world view–that certain acts–like smoking, drinking and gambling, are harmful to either one’s health, morals or both, and therefore, need to be curbed by force of law. While the link between smoking and health is well established and tobacco is a strictly regulated–and heavily taxed industry worldwide–alcohol consumption and gambling fall in a greyer area.
Addiction is a serious and recognised issue in case of both alcohol and gambling. But states have a schizophrenic view of alcohol. While prohibition exists in several states and is severely controlled in others, liquor–which states unanimously decided to keep out of the purview of GST–contributes more than ₹2 lakh crore per year to their coffers. In fact, more than 164 per cent of Karnataka’s own revenues come from taxing liquor, while the share of liquor taxes of total revenues in Delhi and Haryana is also in double digits.
India’s long history of prohibition has by no means deterred consumption. Rather, it has only given rise to corruption and rent-seeking. Likewise with betting, which has flourished despite being illegal.
It is high time that our lawmakers came off their moralistic high horses and recognise the fact that Indians love to drink and gamble. Regulating the industry and legalising gambling will have the double benefit of bringing a massive industry under the tax net, while at the same time allowing law enforcement to prevent abuse and misuse. It’s time Indians were treated as adults and allowed to exercise their own lifestyle choices.
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