Gaming industry to move Karnataka HC against online gaming ban in state

The gaming industry, reeling under the ban on money-based online gaming in Karnataka that has come into effect this week, is set to take legal recourse to challenge the move.

Associations such as the All India Gaming Federation and The Online Rummy Federation are currently evaluating legal challenges including approaching the Karnataka High Court, representatives told CNBC-TV18.

This comes even as several gaming platforms, such as Mobile Premier League and Games 24x7 have shut down their money-based games in the state for users.

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"As the apex industry body, we have notified our member companies to block Karnataka in accordance with the law. Our legitimate online skill gaming businesses will be impacted. Several pro gamers livelihoods will also be negatively impacted. Needless to say, the industry will challenge this in court and seek legal recourse," said Roland Landers, head of the All India Gaming Federation (AIGF).

"We must remember that the Madras High Court had recently struck down a similar act that tried to stop online skill gaming in the state," Landers said.

Associations have cited recent favourable verdicts in Madras High Court and Kerala High Court against similar bans by the state governments.

Karnataka notified the Karnataka Police (Amendment) Act, 2021 on October 5, which is meant to ban wagering or betting in connection with any game of chance. However, the mention of a 'game of skill' in the notification is what has caused concern in the industry.

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According to the notification, the ban applies to online games, involving all forms of wagering or betting, including "in the form of tokens valued in terms of money paid before or after issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance."

The notification also cites "any act or risking money on the unknown result of an event including on a game of skill'.

According to AIGF, Karnataka constitutes at least 10 percent of revenues for the gaming sector in the country. Karnataka is the latest in the list of states which have similar bans in place, including Telangana, Andhra Pradesh and Odisha.