Karnataka statewide ban on online gaming sure to be thrown out: lawyer

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It’s only a matter of time before the statewide ban on online gaming will be overturned by high courts, according to lawyer Vaibhav Kakkar of Sharaf & Partners.

No e-gaming in Karnataka, but why is lottery allowed?

The Karnataka Police (Amendment) Bill, 2021, was proposed before the State Legislative Assembly in September, seeking to ban online gaming or betting by amending the Karnataka Police Act of 1963. Under the proposal, those found guilty of playing online games with real money stakes involved will face up to three years in jail and a penalty of up to Rs 1 lakh.

If approved, the state ban will cover online chess, fantasy sports, poker, and bridge, among other online games with real money gaming involved—and the chief minister warns that those who run games of chance camouflaged as games of skill also run the risk of being punished. Unsurprisingly, the proposed amendment has stirred confusion among the stakeholders who are left guessing what will be and won’t be allowed.

The proposed amendment has made a 180-degree turnaround from initially regulating skill-based games to completely outlawing the vertical, according to Kakkar. In an interview with ON StartUp Central, the lawyer explained: “It’s somewhat surprising because the earlier version of the bill was Karnataka was going to be ahead of all the other states by laying down strong precedent by action—not banning but regulating games of skill but the current version seems to also prohibit games of skill and any monies that are put for casino games of skill, therefore it will tantamount to a complete ban on all of those games on the state of Karnataka assuming the bill gets enacted in its current form.”

Adding to the confusion is the fact that the sweeping ban is skirting around the lottery, which is considered to be a game of chance. Interestingly, an ENV Media report noted that Karnataka is the fourth among states with the highest acquisition rate for Indian lottery online players even though it doesn’t have its own legal lottery, with 8.88 percent (users) and 9.14 percent (sessions). The report aggregated user data for 58,000 users that accessed OnlineLotteries.in in the first seven months of 2021.

Games of skill a constitutional right, Supreme Court says

Kakkar is confident that it’s only a matter of time before the courts will step in and overthrow the ban. After all, the Supreme Court has already ruled that online games of skill are protected under Article 19(1)(g) of the Constitution.

“Each individual game generally has to be the dominant factual basis whether that game has skill more or chance more but in so far as the Karnataka legislation and Karnataka’s current version of bill is concerned, it will be irrelevant whether there is game of skill or whether it’s a game of chance because they seek to outlaw everything, which I daresay is constitutionally suspect and is unlikely to sustain if challenged in a court of law,” the lawyer said.

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