India's Silicon Valley

Karnataka proposes to ban online games involving betting and wagering

Karnataka, home to India’s tech capital Bengaluru, is the fourth state seeking to ban online games involving prize money after Telangana, Tamil Nadu and Andhra Pradesh. 
Reading time 1:32 min
This potential amendment of the Karnataka Police Act involves games that involve "any act or risking money, or otherwise on the unknown result of an event including on a game of skill", according to the bill. The decision is allegedly aimed at protecting young people from rural areas, who have shown a tendency to bet on a frequent basis on fantasy gaming platforms.

The Indian state of Karnataka, where India’s Silicon Valley is located, announced on Friday the proposal of a ban on online games involving betting and wagering. This decision has sparked concerns that growing state regulations could hit the sector. 

Karnataka’s proposal involves the amendment of the Karnataka Police Act to include such games, seeking to ban “any act or risking money, or otherwise on the unknown result of an event including on a game of skill”, the bill reads. 

Many offences under the law are already penalized with prison time, and the bill proposes to increase these penalties. 

The government pointed out that this amendment is necessary for young people from rural areas, mostly idle in the city during the COVID-19 pandemic, who have “shown a tendency to become habitual gamers”; as fantasy gaming platforms, like ones offering fantasy cricket and football games have become increasingly popular in the country. 

The online gaming industry in India has grown over the past few years, with foreign investors showing interest in backing Indian gaming startups, which account for more than 400, and had around 360 million gamers in 2020. 

However, this growth has sparked concerns, as authorities seem to deem these platforms addictive, resulting in financial harm. 

As reported by Reuters, Sandeep Chilana, a New Delhi-based lawyer, explained that such laws have a weak legal standing given the Supreme Court has repeatedly said skill games, such as fantasy cricket, are not like gambling. “Indian states are overreaching and will face legal challenges by banning such skill games”, he pointed out.

This proposal comes during the Premier League cricket tournament. This potential ban might not only affect fee generators such as fantasy tournaments around the League, but also professional players, according to the Esports Players Welfare Association, a non-profit for online gamers. “Games and esports are areas where skill can be developed”, the group noted. 

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