Karnataka High Court quashes law banning online gaming

Karnataka High Court quashes law banning online gaming

February 14, 2022

The Karnataka High Court on Monday struck down the amendments to the Karnataka Police Amendment Act in 2021 prohibiting certain online gaming activities. A division bench comprising Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit said that nothing in the judgement shall be construed to prevent an appropriate legislation in accordance with the constitution.

The bench declared certain provisions of the Karnataka Act number 28/2021, to the extent the provisions pertaining to regulate online gaming activities, to be ultra vires to the Constitution of India.

The bench stated:

The consequences of striking down the provisions shall follow. However, nothing in this judgement shall be construed to prevent an appropriate legislation be brought about concerning the subject of betting and gambling, in accordance with the provisions of the constitution. A writ of mandamus is issued restraining the respondents from interfering with online gaming business and allied activities of the petitioners.

The state government, by amending the Karnataka Police Act, 1963, had prohibited and criminalised playing of games of skill including online games by risking money or otherwise. The petitioners, including the All India Gaming Federation, claimed that games such as poker, chess, rummy, fantasy sports are all games of skill and various court orders have categorically differentiated games of chance and games of skill.

Commenting on the Karnataka High court’s judgement, Mr. Roland Landers, CEO, All India Gaming Federation said:

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 judgement passed by the court that strikes down the Law banning Online Games. Coming in succession of the positive judgments for online skill gaming by the Kerala and Madras HC in 2021, this is a step in the right direction to grow the burgeoning gaming industry.

Furthermore, with the Hon’ble FM’s announcement of AVGC task force that will give a major boost to the game development sector, we look forward to bringing in massive employment, through direct and indirect jobs and becoming a meaningful contributor. AIGF and the skill games council of domain experts will be happy to assist various stakeholders in playing a consultative role in the formation of a regulatory framework for the industry.

Dinker Vashisht, Vice President Corporate and Regulatory Affairs, Games24x7, stated:

The verdict by Honourable High Court of Karnataka, is yet another validation of what the online skill gaming industry has always maintained that we are legitimate business activity protected under the Constitution of India. This is the third High Court judgement, Tamil Nadu and Kerala verdicts, being the earlier ones, in the last seven months that has held a ban on skill gaming as Ultra Vires the constitution. We hope that these judgments can nudge state governments to frame progressive policy and regulatory structure for this sunrise sector.” 

Welcoming the Karnataka High Court’s judgement, Mr. Ankur Singh, CEO & Founder of Witzeal Technologies Pvt. Ltd, commented:

We are excited to hear the judgement of the Hon’ble Court enabling us to resume business in Karnataka and provide our gaming platform to our users. This move is in line with the initiatives proposed by the FM in the Union budget to set up an AVGC task force and will further help in giving a much-needed push to gaming companies and developers. Moreover, the move will provide immense opportunity for the employment of youth by building internal capabilities to cater to domestic and international demands.

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