Congress MP, Shashi Tharoor, introduced a private member bill, The Sports (Online Gaming and Prevention of Fraud) Bill, 2018 in the Lok Sabha, with an aim to “establish an effective regime to maintain the integrity of sports in India by preventing and penalizing sports fraud, regulation of online sports gaming…”
MediaNama has reached out to the office of Shashi Tharoor for a comment, we will update when we hear from them.
The bill comes in the backdrop of a report by the Law Commission, which had called for regulation and legalisation of sports betting and gambling to bring more transparency in the betting market. The Commission had also recommended that sports betting and gambling should be cashless to deal with issues of tax evasion. In 2016, the Justice Lodha committee had also recommended the legalisation of betting in cricket. Note that Tharoor is associated with cricket, have written book on the sport (called Shadows Across the Playing Field) and is also associated with Kochi Tuskers, which played in the Indian Premier League.
Before this private member bill, Nagaland had passed “The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015” in April 2016.
The bill aims to regulate and legitimize online games of skill and allowed online gaming websites to apply for licenses to earn revenue.
The Sports (Online Gaming and Prevention of Fraud) Bill, 2018 is divided into four chapters with two main parts:
- Chapter 2 deals with the prevention of sports fraud. It categorises the offences that come under sports fraud, how they would be investigated and punished.
- Chapter 3 regulates online sports betting.
Regulation of Online Sports Betting
The bill prescribes the constitution of a commission called “Online Sports Gaming Commission” which would consist of seven people in all. The prime function of the commission is to oversee the functioning of Online Gaming Websites, track illegal online sports gaming and betting patterns.
The commission would be required to coordinate with the state and central law enforcement agencies to curb illegal online sports gaming. They would be required to make special reports on any matter pertaining to this and suggest appropriate measures to curb illegal online gaming.
Ambit of Online Sports Gaming:
The act defines the ambit of online sports gaming and keeps betting, gambling in relation to events which are not related to sports, out of it. It says:
- That no person should engage in online sports gaming except through its website; if found guilty, would be imprisoned for a terms of not more than one year;
- The bill prescribes license for an Online Gaming Server or website: No one is allowed to operate an Online Gaming Server or website without a License; and those found operating without it, would be liable for a jail term of upto three years.
- Suspension of license: The bill empowers the Commission to suspend a license if there is any breach of conditions under which the license was given, and the licensee may also be fined as prescribed by the commission.
- The commission can ask police officer of a rank not below Deputy Superintendent of police to investigate any act of violation. All offences under the online gaming are cognizable and bailable.
- The Central government, by notification can permit Foreign Direct Investment for technological collaboration in licensed Online Sports Gaming.
Composition of the Commission: It would have a Chairperson, Vice Chairperson and five members who’d be nominated by the Central Government.
- The Central Government will provide the Commission with a Secretary and officers and employees for its functioning.
- The Chairperson and every member of the commission will have a tenure of three years but the members can offer their resignation to the Central Government.
- The Central Government can remove a person if they have financial liabilities that they have not been able to pay; is convicted and sentenced to imprisonment; is declared unsound by a court; incapable of discharging his functions.
Dealing with sports fraud and gambling
Under the bill, Offence of Sports Fraud is defined as:
- an attempt, agreement to accept or obtaining of any favor by any member to manipulate a sports results which can or leads to fixing;
- passing on the inside information for securing favors;
- willfully misrepresenting the age or other qualification requirements of a person for a domestic sporting event.
The bill recognises a duty to inform: It says that whoever knows about any such act, should inform the appropriate authority or the police or the team management or National Sports Federation in writing. National Sports Federation for cricket is BCCI, and for olympics is Indian Olympic Association.
- The body which has been informed about the attempts of fixing will have three working days to inform the police or the “appropriate authority”. The bill defines “appropriate authority” as a person or an organisation by the Central Government. The bill does not specify the rank of this person, if the person is a civil servant or if the “appropriate organisation” is a Central investigating agency.
- All these offences are cognizable and non-bailable.
Investigation of Sports Fraud:
- The bill allows the investigation of a domestic sporting event by the incharge of the local police station.
- The “appropriate authority” will investigate sports fraud in relation to an international sporting event.
- This “appropriate authority” will have the same powers as that of a civil court. And therefore, during the trial, it can enforce the attendance of any person related to the fraud and examine them under oath; compel the production of records/ proofs/ affidavits/ documents.
For an individual: If anyone found to be guilty of the sports related frauds, they’d be imprisoned for a term extending to five years and fined ten lakh rupees. If the economic benefits is more that ten lakh, then the fine would be five times greater than the benefit obtained by the guilty.
- The bill recognises punishment for those who fail to inform the appropriate authority, therefore, the members of management and sports federations would also be punished for not discharging their duties. Those found guilty will face a imprisonment of not more than three year and a fine of rupees five lakh. If the economic benefits is more than five lakh, than the fine imposed might be three times the said amount.
- For those misrepresenting the age or qualification to fit into a sporting event, will be imprisoned for a term of over one ear and fine of Rs 2 lakh. If the economic benefits is more, then the penalty would be three times the amount of economic benefit.
The punishment for abetment to any of the frauds would be same as that of committing the said fraud.
Offence by companies:
- For any of the said offences committed by a company, the bills says,
“every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well a the company, shall be deemed to be guilt of the offence and shall to be proceeded against and punished accordingly…”
- The accused would be exempted only if they prove that the offence was committed without their knowledge or they had exercised everything in their power to prevent the fraud. Therefore, anyone who was holding any executive position in the company or was involved in abetting of the sports fraud would be assumed to be guilty and the onus would be on them to prove their innocence.
Cognizance of offences: No court can take cognizance unless:
- a complaint is filed by a person from the National Sports Federation, who is incharge of implementing anti-corruption code;
- an individual files a complaint. But the individual should have given the notice of atleast sixty days to the police or the “appropriate authority” before going ahead with the complaint;
- a report filed by the police officer on completion of an investigation;
- a report filed by the appropriate authority on completion of investigation;
The bill says that, “No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class shall try any offence punishable under this Act.”
What about promotions?
The bill fails to recognise gambling as an addiction and therefore, puts no liability the promotions of online gambling. Widespread promotion is a serious concern as evident in an article published by the Guardian. In case of addictive substances such as alcohol or cigarettes, there are number of laws that regulate the promotion. There is a need to recognise and regulate promotion of betting services as well.
The article details the findings from the two year long research by Dr Darragh McGee, from the University of Bath on how gambling affects two groups of football supporters. It documented the lives of several men who dealt with high interest loans, bank debts, family breakdowns and mental health struggles due to addiction to gambling. The article highlighted how the explosion in marketing and sponsorship since the deregulation of gambling in 2005, along with ease of online betting “has resulted in the “gamblification” of watching football”. The participants in the research by McGee said,
“The gambling companies’ marketing is extremely effective, particularly the offers of “free” bets, and that their losses did not feel like real money because they are so casually on a phone and no longer involve going to a bookmaker’s shop.”
Some of the key findings from the research are as follows:
- The report notes that gambling, “Far from being the knowledge-based, risk-free activity it is marketed as, the profound appeal of online sports gambling has had dire consequences for many young men.”
- The men said, that they could not watch a football match without multiple bets ;
- They have up to 25 accounts with online gambling companies;
- The participants in the research said that the conversation with mates are not about the game but about betting;
- The gambling addiction was compared to that of “sex and drugs and rock’n’roll”, with a participant confining that they “had turned to drug dealing for a period to try to recoup money saved for a family holiday,” which he had lost gambling;
- A participant said they would bet on the number of corners, throw-ins or yellow cards and have taken loans to cover gambling losses; he talked about neglecting family to be able to gamble, and about a friend who committed suicide due to gambling debts;
In UK, from April 2017 to March 2018, people lost a total of £14.4bn in betting. This is £13.8bn more from the year 2016-17. Of the total amount lost in 2017-18, around £5.3bn was lost in gambling online which is an increase of 12.8% from the previous year. Online gambling companies in UK voluntarily agreed “whistle to-whistle”
McGee, in his research said that “a generation of young people view gambling as a normalised part of sport. Turning the tide will require stronger state regulation and a genuine commitment to redistributing a greater slice of the losses incurred by British gamblers to education and treatment for problem gambling.”
McGee concluded that effective marketing by betting companies has hooked a generation into “an accelerated sports culture in which the casual staking of money is an essential accompaniment to watching the game.”