The law pertaining to online games involving wagering or betting in Karnataka has been struck down by the Karnataka High Court. A division bench of the Karnataka High Court comprising Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit said that the specific provisions that barred online betting was ultra vires to the Constitution.
“The consequences of striking down the provisions shall follow. However, nothing in this judgement shall be construed to prevent an appropriate legislation from being brought about, concerning the subject of betting and gambling in accordance with the provisions of the Constitution,” the bench said, according to Livelaw.
In September 2020, the Karnataka Assembly had passed the Karnataka Police (Amendment) Act, 2021, which has made online gambling punishable by a maximum imprisonment of three years or a fine of up to Rs 1 lakh for any violation. It was notified on October 5, 2021 which amended the Karnataka Police Act of 1963 to state — "games means and includes online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of the money paid before or after the issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance."
This had been challenged by organisations such as the All India Gaming Federation, Federation of Indian Fantasy Sports, Funware, Play Games 24x7, Head Digital Works, Gamekraft and Junglee Games. They argued that several games that were banned by the government were games of skill.
Advocate General Prabhuling Navadgi had defended the law in court and said that it sought to prohibit activities that are injurious to public health and order. He said that the law did not want to ban games of skill but only games of chance such as gambling and betting.
Several gaming companies had to suspend operations in the state following the law being passed. A case had also been filed against the founders of Dream11 over the platform being operated, following which it ceased operations in the state as well.
Karnataka was the latest in a list of states to ban real-money games. States such as Andhra Pradesh, Telangana, Tamil Nadu, and Kerala have all made similar efforts. The Kerala High Court (banning online rummy) and the Madras High Court (all online games) have both previously struck down such laws. In August last year, the Supreme Court had said that fantasy sports were a game of skill and was not gambling.