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Legalizing Betting Maze (IPL) – A Pipe Dream or An Opportunity? May 27, 2013

So finally IPL 6 is over and Mumbai Indians had the last laugh. Although whether they really worked hard in final match to clinch the title or it was just given to them by the opposite team, needs to be seen. The way Chennai threw away the wickets was too surreal to believe, considering the recent betting scandal that has rocked the entire cricket fraternity along with millions of cricket fans.

So, Betting has been in the limelight in past few weeks due to arrests of few players and multiple bookies across the nation. Great news for all the media to devour upon all the time, considering the cult status of the Game. So few people have voiced the opinion of legalizing betting in the country. They naively assume the estimated figure of more than 1000 crs. in betting that could be taxed, if betting is legalized.

Now, the interesting point that should be taken into consideration is that, if a person places a bet on any game of certain amount and if the government wants to tax that amount. Then the person placing the bet should also have to disclose the source of his /her income. So now the question is, how many people would really come out clean about their sources of income just to place the bets? And would the figure of 1000 crs. would still be achieved in betting circles under the legalized version?

If the people continue to bet, say 1000crs. figure, even in next IPL season under legal betting scene, the Income Tax Dept. would hound them to get the sources of their income. That fact itself would discourage the people to get in the betting rings. And the estimated tax benefit to the Government on the total betting amount may not be as substantial as it is being projected now.

So the Government should think thoroughly about tackling the betting mess in such a way that either it should be reduced to negligible amount in totality or encourage people to come out and participate in betting and just taxing the betting amount without getting into details of the source of their income. The latter option can be a good way to bring the black money into the economy and boost the money supply only if the Government can simultaneously provide alternative investment opportunities to the additional money that has entered the economy. If Government fails to deliver the alternative investment opportunities, then this money would help to push inflation northwards.

So, the solution of legalizing betting in India is not going to solve all problems in sports, in fact it would pose more demanding challenges for Government to face.

It would be interesting to see how Government responds to this sport crisis, after all the future of Cricket is dependent on it.

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