No Arrests To Be Made Under New Gambling Law, Says Karnataka High Court
$5,000 Welcome Bonus
The court also agreed to bunch together petitions challenging the law that outlaws all forms of online gaming where a transfer of money is involved
October 22, 2021 / 02:25 PM IST
The Karnataka High Court on October 22 told the Advocate General appearing on behalf of the state government not to make arrests under the new online gambling law that faces legal challenges from several gaming firms.
Appearing for All India Gaming Federation, a skill gaming industry body that has challenged the law, advocate Arvind P Datar requested the court that no arrests be made as the new law had provision for arrests and FIRs.
Earlier this month, the Karnataka Police filed an FIR against Dream11 cofounders Harsh Jain and Bhavit Sheth for continuing operations on its platform, the first such case under the new law.
Subsequently, a case was also filed against online rummy portal SilkRummy, media reports said.
A single-judge bench of Justice Krishna S Dixit also accepted Datar’s request to bunch together petitions challenging the law that came into effect on October 5. The case will next be heard on October 27.
Real-money gaming firms Mobile Premier League (MPL), Games24x7, A23(Ace2Three), Junglee Games and Gameskraft, apart from AIGF, are among the six petitioners who have moved the high court against the law.
These petitions challenge the constitutional validity of amendments made to the Karnataka Police (Amendment) Act. The law had outlawed all forms of online gaming where transfer of money is involved.
The amendment came after a public interest litigation was filed in the high court seeking a ban on online gambling. It removed the distinction between the game of skill and game of chance, thereby bringing skill-based gaming startups under its purview.
Datar argued that a similar amendment made in neighbouring Tamil Nadu was struck down by the Madras High Court, which said a game of skill can’t be banned as a game of wager.
The law was outside the scope of “gambling and betting” under Entry 34 of the state list and states didn’t have the power to ban online skill-based games.
With growing internet penetration and a young population, gaming is growing popular in India. The country had around 80 million real money gamers in 2020, a number expected to grow to 150 million by 2023, according to an EY-All India Gaming Federation report.
The industry will be worth $2 billion by 2023 in terms of rake fees earned, the report said.
However, several states like Andhra Pradesh, Telangana, Tamil Nadu and Kerala have banned or tried to ban real-money games over the past year.
The Kerala High Court recently overturned a similar order by the state government. The Supreme Court in July upheld fantasy sports as a game of skill.
Moneycontrol was the first to report on October 6 that gaming platforms, including MPL, Games24x7 (RummyCircle, My11Circle), Ace2Three, and RummyCulture, had started blocking access to residents in Karnataka.
Fantasy sports major Dream11 also suspended operations on October 10.
