indianotes

Since time immemorial, humans have gambled.

In Harappa, Mohenjo-Daro and other places, numerous dice were found. Our ancestors enjoyed games of strategy and chance in 2500 BC. In ancient Greece, Rome, Japan, China, and elsewhere, people loved bets and wagers, even punting on gladiator contests and animal races.

But throughout history, rulers and governments have been confused about how to manage this activity.

The extreme position has been a complete ban, as in several countries today – including Saudi Arabia, UAE and others. In contrast, the UK is the most liberal, with broad freedom to run gambling businesses accompanied by taxation and regulation. In most countries, there is a ban, but with “exceptions”.

In India, these exceptions include state-run lotteries, horse races, and casinos in Goa and Sikkim. And of course, the stock market!

Other countries have their own variations of what is allowed. In the US, laws vary by state, but most restrict gambling — allowing Nevada to profit from tourist gamblers.

In all cultures and societies, gambling is frowned upon and considered undesirable for the greater good of society. Indian texts such as the Manusmriti highlight the moral costs and negative societal impact.

But regardless of the moral issues, and whether it is banned or not, gambling simply continues.

Kautilya’s (Chanakya’s) Arthashastra acknowledges this and explicitly assumes gambling will exist; therefore, the state should regulate and profit from it. Chanakya even provided guidelines for government control and oversight, taxation and prevention of cheating. (Today’s punters would have been happy living in the Mauryan period!)

Technology has added several new dimensions to the problem. India’s recent ban on online betting platforms (even the so-called games of skill) has only served to move the business offshore. Money is even being paid via UPI accounts. Expect more scams and bans, but little impact.  

In the meantime, tech-driven “prediction” markets like Kalshi and Polymarket have taken gambling to new heights. You can now bet on tomorrow’s temperature, sports games, elections, alien existence, celebrity affairs – in fact, practically any event or data. Maybe we should term this as “reality betting”.

Some view this as more dangerous than traditional wagers, as insiders might try to influence real events (just as some hobble racehorses). Recently, outsized bets just before US actions in Venezuela and Iran set off insider-trading alarms.

If that were not enough, Crypto has enabled betting outside of the formal banking system and the purview of national governments. What was near impossible is now completely impossible!  

The lack of transparency and criminalisation of betting only encourages the underworld, given the huge financial stakes. This illegal money could well flow into drug smuggling and terrorist networks.

So what to do?

Let’s face facts. Humans are not always rational. A lot of what we do is not in our best interest – be it guns, alcohol, junk food, drugs or gambling.

Yes, it may offend our moral views. But ultimately, there is only one pragmatic choice – as articulated by Chanakya centuries ago.

Rather than face a losing battle by trying to prohibit, better to regulate – earn tax revenues and use this for good – maybe healthcare, or education or something else.

What do you think?

First published on indianotes.com