The state government of Karnataka has passed a bill amending the Karnataka Police Act, 1963. The ruling aims to ban “games of chance” and does not affect the games that are “games of skill”.
According to the prime minister of the state, this measure is intended to restrict operators and instigators who organize games of chance, disguised as games of skill. However, as there was no clear definition to differentiate between the two, it could have a negative effect on online gaming in India.
The ruling further states that the games of skill that could cause players to lose money fall under the jurisdiction of this now-amended law.
However, the move is likely to affect a large number of startups and gaming platforms such as Dream11, My11Circle, MPL Pro, Bet365, Gamezy Nazara, Games 24*7, Paytm First Games and many other fantasy games. These games are currently experiencing peak volume thanks to the second leg of IPL underway in the Middle East.
Since the state government believes that gambling is nothing more than gambling, which is illegal in India, the new bill makes these online games both known and non-guaranteable violations. If found guilty, there is a jail term of up to three years and a fine of Rs. 1 lakh.
On the other hand, the Supreme Court and several other high courts have already ruled in favor of fantasy gaming and call it a “game of skill”. However, the government of Kerala had banned online rummy games under the Kerala Gaming Act.
Interestingly, even Google doesn’t allow such apps to be listed in the Play Store that’s why most of these applications have to be downloaded directly from their websites on the Android phones. Despite this, these games are thriving and Karnataka itself is a hub for such games/businesses with an investment of over Rs. 4000 crore and employs thousands of people.
Industry association opposes the decision
The decision to ban online gaming has not gone down well with the Confederation of All India Traders (CAIT) – the body that represents more than 8 crore traders and 40,000 trade associations, as it has spoken out strongly against the law. It says the decision could affect millions of gamers along with the entire Indian online gaming industry and startups that operate them.
According to the data, India currently has 623 gaming startups and the fact that the new law does not distinguish between a game of skill and a game of chance could greatly harm these companies.
The industry association also believed that this ruling could force users into offshore gambling apps that are not covered by Indian law and could be harmful to users.