Karnataka HC lifts ban on online gambling in state
In a big relief for the fantasy sports industry, the Karnataka High Court on Monday struck down the provisions of the Karnataka Police (Amendment) Act, 2021, which prohibit online gambling. Terming them as "unconstitutional", the court, however, clarified that it wasn't striking down the entire Act and will not interfere if the state brings in a new law in consonance with the Constitution.
Why does this story matter?
The judgment is likely to pave the way for fantasy sports firms to make a comeback in the state. Notably, the Karnataka government had notified the law banning betting and wagering in online games in October last year. Since then, fantasy gaming firms like Dream11, Mobile Premier League, Games24x7 (RummyCircle, My11Circle), and Ace2Three have suspended their operations in the state.
Industry associations, gaming companies had moved the court
The court was hearing a series of petitions by industry associations, gaming companies, and individuals. The petitioners include skill gaming industry body All India Gaming Federation (AIGF), self-regulatory fantasy sports industry body Federation of Indian Fantasy Sports, real-money gaming firms Mobile Premier League, Games24x7, A23(Ace2Three), Junglee Games, Gameskraft, etc. The petitions had challenged the constitutional validity of the law banning online gambling.
HC reserved its judgement on December 22
Initially, the pleas were heard by a single-judge bench of Justice Krishna S Dixit. It was later transferred to a division bench comprising Justice S Dixit and Chief Justice Ritu Raj Awasthi. On December 22, the HC had reserved its judgment and told the parties they can file written submissions for any further arguments in the matter.
Petition was initially listed for interim relief
As per reports, the petition was initially listed for interim relief. However, it was later heard for final arguments following a consensus among the counsels representing the petitioners as well as the state's Advocate General appearing for the respondents.
Legislation was passed in September last year
In September 2021, the Karnataka Assembly passed a legislation to amend the Karnataka Police Act, 1963, making all forms of gambling, including online, a cognizable and non-bailable offense. This came after a public interest litigation was filed in the high court seeking a ban on online gambling. After the law came into effect, online gaming firms had geo-blocked their apps and sites in Karnataka.
FIR against Dream11 CEO
In the aftermath of the ban, an FIR was also registered against Harsh Jain, the chief executive officer and co-founder of fantasy sports platform Dream11. However, the Karnataka HC had granted him relief against any coercive action.
Other states that tried to ban online gambling
Last year, the Tamil Nadu government brought a law to ban online gambling. However, the Madras High Court struck down the suspension order in August. Recently, the Kerala High Court had also overturned a similar order by the state government. Other states which have clamped down on online gambling include Telangana, Andhra Pradesh, Kerala, Assam, and Odisha.
India had 80 million real-money gamers in 2020
The online gaming industry is booming in India with the growing internet penetration in the country. According to an EY-All India Gaming Federation report, India had around 80 million real-money gamers in 2020. The number is expected to grow to 150 million by 2023.
