1. Supreme Court Position on Horse Racing
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The Supreme Court of India, in several landmark judgments (e.g., Dr. K.R. Lakshmanan vs State of Tamil Nadu, 1996), has explicitly held that horse racing and betting on it is a “game of skill” and not merely gambling.
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The reasoning: A bettor uses knowledge of bloodlines, jockey form, trainer tactics, handicap ratings, track conditions, and past performance to make an informed choice—not sheer luck.
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Therefore, horse racing betting is legally protected and cannot be equated with games of pure chance like lotteries or casino games.
2. GST / Sin Tax Issue
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The GST Council, while trying to simplify taxation, brought online gaming, casinos, horse racing, and betting under a 28% GST slab (from Oct 2023), calling them activities with “negative externalities” similar to sin goods.
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In some discussions, an even harsher 40% “sin tax” model (like tobacco/liquor) has been floated. If horse racing were clubbed into this, it implies it’s treated at par with gambling, alcohol, or tobacco.
3. Is It Justified?
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Not justified in spirit: Since the apex court has recognized horse racing as a game of skill, logically it should be taxed like other entertainment or sports-related activities, not “sin goods.”
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Problem of perception: Governments tend to look at betting (whether skill-based or not) as a vice-driven activity. So, despite the legal recognition of skill, policymakers lump horse racing with gambling because money is staked on outcomes.
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Practical impact:
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Punters will suffer with reduced payouts.
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Turf clubs’ revenues will fall drastically.
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Employment in the racing industry (trainers, jockeys, syces, breeders, bookmakers) will be hit.
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Illegal betting syndicates may flourish if legal betting becomes too costly.
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4. Balanced View
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Taxation should reflect the Supreme Court distinction:
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Pure games of chance (lottery, roulette, slot machines) → high sin tax justified.
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Games of skill with betting components (horse racing, rummy, bridge, fantasy sports) → should attract moderate taxation, like entertainment services (18% slab), not punitive 28–40%.
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Internationally, UK, Hong Kong, Australia treat horse racing as a regulated sport-industry, not as sin gambling. India risks destroying its 200-year-old turf tradition if it doesn’t make this distinction.
How can you treat rummy and horse racing in one slot,in horse racing u have a option whether he wants to play a particular race or not.
ReplyDeleteRummy games are pure looting the public ,once u enter that,it is equal to committing sucide
Every second the company running these rummy,are making crores of money.
I feel happy the decision the government has taken.
Tell these companies to produce account,how much they made,then u will know