This story is from September 22, 2021

Karnataka: Bill banning online gambling likely to face legal hurdles

Experts say the Karnataka Police (Amendment) Bill, 2021, which seeks to ban online gambling and betting, lacks clarity and may face legal challenges, particularly over how authorities identify an activity, website or app as problematic.
Karnataka: Bill banning online gambling likely to face legal hurdles
Karnataka Police (Amendment) Bill, which seeks to stop online gambling and betting, was passed on Tuesday
BENGALURU: Experts say the Karnataka Police (Amendment) Bill, 2021, which seeks to ban online gambling and betting, lacks clarity and may face legal challenges, particularly over how authorities identify an activity, website or app as problematic.
The bill, passed in the assembly on Tuesday, does not specify which games or entities with gambling/betting elements will be banned.
But officials of the law department said that the new norms were likely to affect some prominent platforms’ games related to cricket and cards.
“The bill has defined online games as those involving all forms of wagering, gambling or betting, including in the form of tokens valued in terms of money paid before or after the issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance,” explained gaming expert Deepak Vyas.
This, he added, does not seem to be an intelligible move, considering that similar measures in the past were questioned in court.
The Federation of Indian Fantasy Sports (FIFS), a selfregulatory industry body, said that though well-intentioned, the bill had created confusion and uncertainty among legitimate businesses in the segment.
While the government’s concerns — protecting people from online frauds and addictive components — may be valid, the bill appears to be misguided as it fails to distinguish between firms with legal operations and platforms encouraging gambling and betting. Citing legal opinion, industry voices claim the bill runs contrary to judgments delivered by courts.

“Skill-based gaming cannot be compared with gambling, and banning is not a solution. The Indian regulatory framework has clearly differentiated between games of skill and games of chance. Just because games of skills may involve an entry fee or registration fee, they cannot be compared to gambling. Moreover, all the online skill gaming platforms have stateof-the-art technology in place to ensure responsible gaming practices,” said Roland Landers, CEO of All India Gaming Federation.
Industry experts suggest that instead of a ban, the government should issue norms to regulate online gaming. They add that the sector can generate jobs and help the government earn revenue.
Landers said the bill might dent Karnataka’s reputation of being the tech and startup capital. “India is the fifth-largest online gaming market in the world. Skill-based gaming, the sunrise sector, has been a strong contributor to the Indian economy, especially Karnataka’s, even during an unprecedented period of economic slowdown and it is expected to generate revenue of $2 billion by 2023,” he added.
In a letter addressed to chief minister Basavaraj Bommai, Praveen Khandelwal, national secretary general of the Confederation of All India Traders (CAIT), said that the ban would affect startups such as Dream11, Nazara, MPL, Games 24x7 and Paytm First Games. According to the CAIT, there are 623 gaming startups in the country.
Earlier this year, Tamil Nadu banned online betting and wagering along with games of skill if played for a bet, money or other stakes. A court struck down parts of this law, stating that a game cannot be considered gambling if the outcome is in one’s control.
“We will provide clarity when we frame the rules after getting the governor’s consent. We have drafted the bill after studying the Madras high court’s decision and brought in amendments to nine sections and multiple subsections,” said home minister Araga Jnanendra.
He added that the government decided to ban online games with betting and gambling elements as many families had suffered because of their addictive nature.
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