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Betting royalty can help social welfare schemes - By Usman Rangeela I Mumbai Mirror

Posted on - 08 Jan 2015

Betting royalty can help social welfare schemes
By Usman Rangeela
Mumbai Mirror

If most turf clubs worldwide are flourishing today, it's only be cause they have robust pari mutuel (tote) betting operations and a helpful government by their side. On the other hand, legal betting activities though associated only with horseracing are looked down upon not only by our society at large, the government too isn't keen to be seen as promoting a gambling sport.
 
Ironically, India is recognised as the hub of illegal gambling for almost every sport but all state governments are in a denial mode. When the spot-fixing scandal in cricket surfaced last year, then CBI chief Ranjit Sinha suggested that legalised betting can prevent corruption, but he was ignored.
 
Strangely, our politicians believe that gambling is a social stigma when a large population loves speculating through the stock market, matka gambling, lotteries and election results etc.
 
The first offshore casino came up in Goa in 2005 but other states were unmoved. They continue to shun legal gambling online betting without appreciating that there's a goldmine on offer for them through license fees royalty and legalised betting could strip the system of its black money.
 
ATTRACTIVE PROPOSAL
 
Back home, Maharashtra government's myopic policy of imposing unreasonable betting tax has virtually broken Royal Western India Turf Club's back. Not only have exorbitant taxes led to a massive slide in RWITC's tote collections, it has forced punters to bet with illegal bookies. But RWITC has not lost hope.
 
Instead of demanding a tax rebate, RWITC has now given a proposal which offers a win-win situation for them and the state government too. The club is willing to guarantee a minimum amount of Rs 20 crore which is equivalent to the annual taxes currently paid to the exchequer.
 
It's learnt that this offer got the finance ministry bureaucrats interested during the Congress-NCP rule and with a dynamic chief minister heading at the helm now, the club is optimistic that their proposal will be accepted.
 
Arguing forcefully in favour of their proposal, the club has cited the huge disparity between its own tote collections of Rs 120 crore annually and that of the Bangalore Turf Club, which rakes in over Rs 1200 crore! Since RWITC's minimum guarantee insulates the government from any revenue shortfall, strong lobbying with the current establishment could change the club's fortunes. The club has also assured the government that any extra income in excess of the guaranteed amount will be equally shared.
 
The current rulers must understand that the fear of stigma prevented their predecessors from tapping the huge revenue potential from tote-betting, which can easily fund some of its social welfare schemes.
 
KILLING FIELD
 
The fixed-odds betting (FOB) operations were started during the Invitation Cup weekend in 2005 with the idea to attract small punters but it has proved to be a killing field for them.
 
Punters bet on FOB despite miserly odds only because they have no other option. Official statistics show that RWITC earned profits of over Rs 12 crore, of which 20 percent went to the operator, in the last five years. Add another Rs 29 crore betting tax and you realise that punters lost Rs 42 crore through FOB! It's time RWITC hived off FOB to any third party, which is willing to invest money and also scale up the operations.

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