Karnataka hearing set for Nov. 18 as legal tussles continue

Karnataka High Court

In the absence of a national framework, India’s legal system is continuing to arbitrate challenges to the legality of the online gambling sector, with a key case set to come back before the Karnataka High Court this week. 

Karnataka announced amendments to its laws in September that banned all forms of gambling for stakes, even if they are games of skill. The amended Karnataka Police Act, 1963, makes all forms of gambling, including online, a cognisable and non-bailable offence. It came into force on October 5th.

The law is being challenged by at least 10 different petitioners, including the All India Gaming Federation (AIGF) and major Indian gaming companies, such as Mobile Premier League and Junglee Games.

The High Court will hold its next hearing on the petitions to overturn the ban on Nov. 18. The AIGF has argued that the ban will harm state capital Bengaluru’s image as a start-up hub and will have huge economic repercussions. There are 92 online gaming companies registered in Bengalaru, employing more than 4,000 people, according to local media reports. 

The petitioners argue that games of skill, such as poker, rummy and fantasy sports, have been deemed as legal by a Supreme Court ruling. Therefore, individual state governments are acting against the constitution in seeking to ban the industry. 

Aside from the Supreme Court decision, there is no overarching federal laws in India to regulate gambling, with each state able to formulate its own legislation. 

This has led to a series of stops and starts for India’s nascent gaming industry, which industry insiders say has the potential to be one of the largest in the world with the right legal framework. 

“I sincerely believe that with the much-needed support of the relevant policymakers across the states and the center, India can become an i-gaming superpower in the near future,” AIGF CEO Roland Landers said in a recent interview with the Hindustan Times. 

In the meantime, the state-by-state legal tussles look set to continue. 

The Karnataka ban came hot on the heels of two victories for the industry. In September, the Kerala High Court struck down the government’s attempt to ban online rummy, holding that it is a skill-based game and thus protected under the Indian constitution.

The Kerala government had sought to ban online rummy by removing an exemption it enjoyed under the state’s gaming act.

Petitioners, including Junglee Games and Gameskraft Technologies, argued that this was a violation of their fundamental right to do business and therefore it was arbitrary and unreasonable. 

In August, a similar ban introduced by the Tamil Nadu government was struck down in the Madras High Court.

However, it appears that the Tamil Nadu government may challenge the High Court’s decision in the Supreme Court. 

According to G2G, an India gaming news service, the state has filed an appeal rather than issue another amendment to the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. The appeal was assigned a diary number and is pending the final registration number, the news outlet said.

Elsewhere, the Odisha government’s Prevention of Gambling Act, 1955 has also been challenged as unconstitutional.

According to G2G, a challenge to that ban was brought by Tictok Skill Games Private, which operates a social gaming platform under the brand name WinZO Games.

The petition was listed on November 15 for an admission hearing before a bench headed by Chief Justice Muralidhar. The next hearing is on February 14, 2022.

The difference in Odisha’s case is that the gambling ban has been in force for decades, whilst the Karnataka and Tamil Nadu legislation was passed recently.