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Debatable if taxation in India will lead to discourage those who choose to gamble

By Bharat Dogra 

An important debate ensued in the recent GST Council meeting on taxing casinos. Finally on June 29 the decision on taxing casinos, online gambling and horse racing at 28% was deferred, particularly on account of the objections voiced by the Finance minister of Goa (as well as some others). Now a panel of state finance ministers headed by the Meghalaya Chief Minister Conrad Sangma has been formed to hear all sides before a final decision is taken, likely to be in August.
While commenting on this debate the Finance Minister Nirmala Sitharaman made an important statement. She said, “The one thing I would like to highlight to you all is whether it is horse racing , online gaming or casinos, the common thread which the committee highlighted was that they are all part of betting and gaming. In other words they are essentially gambling.” She added that there may be an element of skill or of chance but all these are essentially treated as gambling and taxed at the same 28% rate and in a way the panel appears to be in favor of continuing the status quo”.
This relates to the economic and taxation aspects of the debate, but this also has implications for the social impacts side of the debate. While taxation as a means of raising resources for the government is well recognized, it is debatable whether taxation will lead to discouraging those who choose to gamble in these various games. Keeping in view the serious and adverse social impacts of gambling, we need to be concerned also about any legitimization and justification tax regimes can provide for various forms of gambling.
A big player in casinos was quoted to have stated some time back in media, “The Indian government has asked casinos to build integrated resorts in Goa. Gambling operators who did not enter Macau, when the game was liberalized at the beginning of the millennium do not want to miss the boat in Goa, and want to bet on what might be the next Macau.”
Whatever may be the truth about the future plans it is clear that even with their present day limited range casinos have become identified in the public mind with several worsening social problems. Women may be least involved in gambling but still suffer more of its adverse social impacts.
While gambling has been a serious addiction for a long time in history, in modern times this problem has taken new forms with technology making it possible to spread gambling in new ways on a much wider scale. In addition powerful interests have been pleading for legalizing more forms of gambling including gambling and bets relating to sports events.
Crystal Fulton, Prof. of University College, Dublin has written, "Harmful gambling can have crippling financial and social effects on the gambler, their friends and family. In the first national study on the social impact of harmful gambling in Ireland, we examined how it affected recovering gamblers, their families and friends..... Talking to people from all walks of life ... we found that a common theme was the devastating social effects gambling had on people's lives." (The Conversation, "More than just financial loss, the social impact of gambling cannot be underestimated." Nov. 1, 2017.)
A review of existing research on this subject by Shou-Tsung Wu and Yeong-Shyang Chen says, "Although some researchers have found that the development of casino gambling has no direct association with an increase in criminal activities, most studies have shown that casino gambling may be correlated with the following social deviations : domestic violence, divorce, bankruptcy, drug and alcohol abuse, risky or illicit sexual behaviour (especially prostitution) and problem gambling. (Allcock 2000, Chhabra, 2007, Harill and Potts, 2003, Pelry 2003).
"Additionally, Stokowski (1996) and Long (1996), who studied gambling towns in Colorado and South Dakota, clearly indicated that the rates of criminal activities increased due to the development of casino enterprises in these two locations. The increase in the number of pathological gamblers is another concerning issue regarding the development of casino gambling."
According to Gordon Moody Association (Help for Problem Gamblers), "Anyone who gets caught up in the downward spiral of problem gambling finds only too soon that the negative impact on his or her life can be devastating. Finding money to gamble is usually the most immediate and obvious issue which brings with it enough problems, but in addition an all consuming compulsion to gamble at any cost leads to difficulties which affect employment, quality of life, family relationships and mental and physical health.
And, of course, problem gambling doesn't just affect the individual. It's estimated that for every problem gambler at least 10 other family members, friends and colleagues are also directly affected."
A 2010 study in the UNLV Gaming Research and Review Journal revealed that those classified as problem gamblers were, on average 84% more like to use hard drugs, 31% more likely to binge drink and 260% more likely to hire a prostitute.
Hence it is clear that gambling has very serious social impacts and the rapid spread of legal gambling should be resisted by social movements. In addition communities should also resist the widespread practice of various forms of illegal gambling. In school education and in other community places there should be a clear message against gambling, backed with adequate information on the adverse social impacts of gambling. The highly dubious arguments given for legalizing gambling, including betting in sports events, should be resisted strongly by providing all the strong evidence against the adverse social impacts of all forms of gambling.
The debate on gambling should not be restricted to tourism, taxation and revenue aspects, as the most important aspects relate to adverse social impact of gambling which should get the highest importance. The unfortunate tendency on the part of films to present mainly the glamorous side of gambling while neglecting the sufferings caused by it is another cause of concern.
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The writer is Convener, Campaign to Save Earth Now. His recent books include ‘A Day in 2071’, ‘Navjivan’ and ‘Man over Machine-A Path to Peace'

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