Karnataka assembly passes bill to ban online gaming for stakes

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Karnataka’s legislative assembly on Tuesday passed the Karnataka Police (Amendment) Bill, 2021 to ban all forms of online gaming for stakes in the state. The bill tabled on September 17, advocates maximum imprisonment of three years and a penalty up to Rs 1 lakh for those indulging in online gaming or betting in the state.

Home Minister Araga Jnanendra introduced the Bill, which aims to ‘ban 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’. It intends to ban electronic means and virtual currency, electronic transfer of funds in connection with any game of chance’.

The legal jurisprudence emanating from Supreme Court for over the past 60 years is very clear, that games of skill are not gambling, and offering of games of skill is a legitimate activity protected under the Indian Constitution. This has been reiterated multiple times by various high courts, including the Karnataka High Court.

Despite the clear law and the judgments, multiple states including Tamil Nadu have tried to ban skill-based online games. The Tamil Nadu High Court last month gave a detailed judgment striking down the Tamil Nadu law which prohibited online games of skill, as unconstitutional. The Court clarified that any restriction on games of skills, whether online or offline needs to be narrow, and the state should try and regulate, instead of a ban.

The Court also came down heavily on the State government for passing the law as a populist measure in the lead-up to state elections, without following the established law. The Court also stated that Entry 34 of the State List under the Constitution, from where the Karnataka amendment traces its power, cannot be used to regulate games of skill, and can only be used to ban/ regulate games of chance.

The Karnataka Police Act, in line with the laid down law, prohibited games of chance. However, now in the garb of including online gambling within its ambit, the government is also trying to slide in games of skill.

In a letter addressed to Basavaraj Bommai, the Chief Minister of Karnataka, the National Secretary General of CAIT, Praveen Khandelwal has stated: “Unfortunately, the Karnataka bill does not distinguish between a game of skill and a game of chance. Game of chance is pure gambling and should be rightfully banned. However, by including games of skill in the ambit of the bill, it has not only gone against established jurisprudence but threatens the thriving Indian gaming startup sector.   

More to follow…