Vices end up being the governments best friend. And a great source of income. But can you tax prostitution or murder.
And if you can’t, how can you tax gambling. If something is illegal, it cannot be allowed. By taxing it, you are in effect allowing it. And if illegal gambling is allowed and taxed, then why not do the same for so many other things – from prostitution and murder to cybercrime and extortion. We cannot say that an illegal act done online become legal even if it is patently illegal offline.
I found an interesting judgement on the topic online:
Net net, we are still governed by a 150 year old law which doesn’t extend to online activities. And therefore it is difficult to prosecute. But does that mean that it becomes legal and taxable.
We are a country which says that horse racing is a game of skill and therefore I have a fundamental right to practice my skill and profession of betting on horses. And in any case horse racing is not covered under the Public Gambling Act of 1850 or whenever.
But this does raise interesting analogies. First pretty much all online services were illegal. Which censorship board has cleared all kinds of content being shown on the internet. Or what taxi license did uber have. Or what hoteliering license did Airbnb have. America is great because you can get away breaking the law in the name of innovation. And nothing will happen to you.
Social media uses algorithmic manipulation to first grab and then sell your attention. And gambling can be made addictive. Online payments remove the friction to give in to the addiction. And not to be left behind, the stock markets have launched their own gambling instruments. The commodity markets always head them.
But what fails the nation are the accountants and accounting policy. Pick up any gambling companies big4 signed balalnce sheet and there is no mention of the revenue being from an illegal activity.
You can penalise gambling.
But you can’t tax it.
Else we should have GST on prostitution and extortion as well. And gst on stolen body parts.
We have a whole new criminal law but it doesn’t address any of these. Not gambling. Not the theft of attention. Or of presence.
But more important – is this a state subject or a central subject. Is it my fundamental right to gamble. And if horse racing is a game of skill – why isn’t cricket betting.