The Karnataka High Court will hear on October 27 a batch of petitions filed by All India Gaming Federation and several gaming firms against a new law introduced in the state to ban online gaming, the Karnataka Police (Amendment) Act, 2021.
The federation and others have opposed the inclusion of online games of skill in the category of online gambling. In its petition, the Federation has argued that curbs on online gaming through the efforts to regulate gambling will affect a growing gaming industry in the country.
The Federation has contended that the amendments made to the Police Act “unlawfully prohibit the lawful and legitimate business of the members of the federation in providing games of skill”, as it pointed out that games of skill involving risking of money or otherwise do not amount to wagering or betting as interpreted by apex court. This implies that the State can not prohibit such activities.
Karnataka is considered the "Silicon Valley" of India
Justice Krishna S. Dixit, before whom the petition filed by the Federation came up for hearing on Friday, said that the interim plea for stay of the operation of the new law would be considered on October 27 along with other petitions filed by individual online gaming operators, including Galactus Funware Technology, Play Games 24X7, Head Digital Works, Gameskraft Technologies and Junglee Games India.
In September, the Karnataka legislature passed a law to amend the Karnataka Police Act, 1963, to ban all forms of gambling, including online verticals. This aims to make gambling a cognizable and non-bailable offense to “curb the menace of gaming through the internet and mobile apps”.
There are over 400 start-ups in India, valued at $885 million in the online gaming space, and around 71 online gaming start-ups registered in Bengaluru and it is estimated that around 40,000 new jobs will be created by 2022 in this sector.
The Federation claims that the criminalization of games of skill will affect not only the investments made by its members, but also the livelihood of the employees.
Karnataka’s proposal involves the amendment of the Karnataka Police Act seeks 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.