MUMBAI: The Karnataka High Court on Monday struck down sections of the Karnataka Police (Amendment) Act, 2021, that restrict and criminalise betting on and playing skill games, including those played online, as unconstitutional.
“The writ petitions have been granted. The restrictions are unconstitutional and must be overturned,” a Division Bench led by Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit ruled.
The move came after the southern state’s High Court had reserved judgment on December 22 after it concluded several hearings from a number of individuals, gaming associations, and other industry stakeholders who had petitioned to the court, claiming that the state’s online gambling law that came into effect on October 5 was unconstitutional.
While stating that the court was not overturning the entire Act, the Bench also stated that it would not interfere if the state passed a new law in accordance with the Constitution.
Welcoming the High Court decision and impressing upon the need for regulation of online gaming, Sameer Barde, CEO – E-Gaming Federation (EGF), said: “We welcome the Honourable Court’s forward-looking judgment. We sincerely hope that this will set the tone to establish a robust regulatory framework for the online gaming sector.
“EGF would be keen to collaborate and support the Government of Karnataka in developing a comprehensive regulation that will address all the issues of the state, citizens, and the sector.
“The State governments in Tamil Nadu and Kerala have also lifted the ban on games of skill. Over the decades, several Supreme Court judgments have upheld this view, lending it protection under Article 19(1)(g) of the Indian Constitution.
“We request the state government to regulate this sector to ensure only legitimate, legal operators who follow strict protocols are allowed to operate, and a clear distinction is drawn from those trying and operating above the law. We reiterate the recommendation to set up a joint committee to explore the possibility of setting up a licensing regime to regulate the gaming sector as a whole and the skill gaming sector in particular.”
Roland Landers, CEO of All India Gaming Federation (AIGF), one of the key petitioners that had challenged the amendment, opined: “India is the fifth largest online gaming market globally and skill-based gaming, a sunrise sector, is giving birth to an increasing number of unicorns within the country, especially Karnataka. The sector has been a strong financial contributor to the Indian economy even during an unprecedented period of slowdown and is further expected to generate revenues in excess of $3 billion by 2025. As the apex industry body for online skill gaming, AIGF welcomes the judgment passed by the court that strikes down the Law banning online games.”
According to a recent EY-AIGF report, the number of real-money gamers is expected to cross 150 million by 2023, up from 80 million in 2020.
Puneet Singh, co-founder and COO, Baazi Games, added: “It’s a great day for the RMG industry. This segment is being recognised again and again specially from top judicial institutions of the country. Even the Central government has been showing support to the gaming industry as seen in the recent budget presented by the Hon’ble FM. I am sure all state governments will also support the industry to realize its true potential, both for employment opportunities and revenue generation which can also be a big contributor to the GDP. This will also boost the investor sentiment towards the segment.”
The Karnataka Assembly enacted a bill to alter the Karnataka Police Act, 1963, making all kinds of gambling, including online gambling, a cognizable and non-bailable offence on September 21 of last year. Since the new law took effect, some online gaming companies have geo-locked their applications and websites in Karnataka to avoid facing legal action if clients use them.
Under the new law, Dream 11, the dominant online fantasy sports platform in India, was also charged with operating a gaming house.
