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‘Unconstitutional’: K’taka HC strikes down law banning online gambling in state

By Priyanka Verma 
Updated Date

New Delhi: Calling it unconstitutional, the Karnataka High Court on Monday, February 14, struck down provisions of the Karnataka Police (Amendment) Act, 2021, which prohibit and criminalise betting on and playing games of skill, including the ones online.

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This judgement will likely pave the way for fantasy sports and gaming fifirms such as Dream11, Mobile Premier League, Games24x7 (RummyCircle, My11Circle), and Ace2Three make a comeback in the state. They had suspended operations in October last year.

The Karnataka High Court had on December 22 reserved its judgement after concluding the hearings from a series of petitioners that included industry associations, gaming companies and individuals who had challenged the constitutional validity of the state’s new online gambling law that came into effect on October 5.

Skill gaming industry body All India Gaming Federation (AIGF), self-regulatory fantasy sports industry body Federation of Indian Fantasy Sports (FIFS), real-money gaming firms Mobile Premier League (MPL), Games24x7, A23(Ace2Three), Junglee Games, Gameskraft and Pacific Games, are among the dozen petitioners who had moved the high court against the law.

These petitions had challenged the constitutional validity of amendments made to the Karnataka Police (Amendment) Act that had banned all forms of online gaming where transfer of money is involved.

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The case was initially heard by a single-judge bench of Justice Krishna S Dixit and was later transferred to a division bench comprising Dixit and Chief Justice Ritu Raj Awasthi. On December 22, the bench told the parties they can file written submissions for any further arguments.

The petition was initially listed for interim relief but was later heard for final arguments following a consensus among counsel appearing for the petitioners as well as the state’s Advocate General appearing for the respondents, since the arguments had advanced at length.

The state’s amendment came after a public interest litigation was filed in the high court seeking a ban on online gambling. It removed the distinction between the game of skill and game of chance, thereby bringing skill-based gaming startups under its purview.

With growing internet penetration and a young population, gaming is growing popular in India. The country had around 80 million real-money gamers in 2020, a number expected to grow to 150 million by 2023, according to an EY-All India Gaming Federation report.

The industry will be worth $2 billion by 2023 in terms of rake fees earned, the report said.

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However, several states like Andhra Pradesh, Telangana, Tamil Nadu and Kerala have banned or tried to ban real-money games over the past year.

The Madras High Court had struck down the suspension order in August while the Kerala High Court recently overturned a similar order by the state government. Tamil Nadu has now approached the Supreme Court to restore the ban. Meanwhile, the apex court had upheld fantasy sports as a game of skill in July this year.

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