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Karnataka High Court Quashes Law Banning Online Games

The Karnataka High Court (HC) has struck down a law which banned online games in the state. This decision by the HC comes at a time when the Supreme Court is scheduled to hear an appeal made by the Tamil Nadu government which challenges a similar decision made by the Madras High Court. In its latest decision, the Karnataka HC has struck down the amendments to the Karnataka Police Act, 1963 which banned games like online poker and online rummy when played with stakes. 

Justice Krishna S. Dixit was quoted saying, “The writ petitions succeed. The provisions are ultra vires of the Constitution and struck down.”  The HC further stated that the entire Act is not quashed, only the offending provisions were struck down. Further, the bench clarified on the matter by saying, the decision by the HC will not stand in the way of creating a new legislation which will uphold the provisions of the Indian Constitution against gambling.

The petitioners who challenged the amendments to the Karnataka Police Act, 1963 argued that banning online skill-based games is in violation of the fundamental rights of the business operators. The petitioners further added that the law to curb any harm caused has to be proportionate and a blanket ban could only be used as a last last resort if no other options look viable to implement.

Senior advocates like Dr. Abhishek Singhvi, Mukul Rohatgi, Gopal Jain, Sajan Poovayya, DLN Rao, Arvind Datar, and CA Sundaram had also appeared before the HC for this case. The matter was transferred from a single bench to a division bench comprising Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit

ALSO READ: Madras High Court Calls Tamil Nadu Online Gaming Ban ‘Invalid’

While appearing for one of the petitioners Dr. Singhvi argued that ban on online games for people above 18 years of gae is ‘unreasonable, external, paternalistic value judgment’ which cannot be implemented, and it also violates Articles 14, 19 (1)(g) and 21 of the Constitution. Singhvi had in the past made similar arguments when agruing in the Madras HC. 

The petitioners concluded their arguements against banning online games in Karnataka on 22nd December 2021. Gaming brands like Mobile Premier League (MPL), Games24x7, Gameskraft, Head Digital Works Private Ltd., and Junglee Games along with All India Gaming Federation (AIGF) and Federation of Indian Fantasy Sports (FIFS) together formed a group of petitioners who challeneged the amendments to the Karnataka Police Act, 1963. On 5th October, Karnataka Police (Amendment) Act 2021 notified that gaming of all kind (including online games) with stakes is cognizable and non-bailable offence.

The petitioners arguing in the Karnataka HC relied on the judgments made by the Madras and Kerala HC and also on cases like RMB Chamarbaugwala, State of Andhra Pradesh vs. K. Satyanarayana which are decade old. The Advocate General (AG) who appeared for the government argued about the differentiations between the earlier cases and the current facts presented before the Karnataka HC. The AG stated that games of skill can lose their nature when the general public at large is involved.

Industry Reactions

Sharing his views on the Karnataka HC’s judgment, Roland Landers, CEO, All India Gaming Federation said, “India is the fifth largest online gaming market globally and skill-based gaming, a sunrise sector, is giving birth to an increasing number of unicorns within the country, especially Karnataka. The sector has been a strong financial contributor to the Indian economy even during an unprecedented period of slowdown and is further expected to generate revenues in excess of $ 3 billion by 2025.

As the apex industry body for online skill gaming, AIGF welcomes the judgment passed by the court that strikes down the Law banning Online Games. Coming in succession of the positive judgments for online skill gaming by the Kerala and Madras HC in 2021, this is a step in the right direction to grow the burgeoning gaming industry.

With the Finance Minister’s announcement of AVGC task force that will give a major boost to the game development sector, we look forward to bringing in massive employment, through direct and indirect jobs and becoming a meaningful contributor. AIGF and the skill games council of domain experts will be happy to assist various stakeholders in playing a consultative role in the formation of a regulatory framework for the industry.”

ALSO READ: Fantasy Sports Body Files Petition Against Karnataka’s Ban On Online Games

Dinker Vashisht, Vice President Corporate and Regulatory Affairs at Games24x7 said, “The verdict by Honourable High Court of Karnataka, is yet another validation of what the online skill gaming industry has always maintained that we are legitimate business activity protected under the Constitution of India. This is the third High Court judgment, Tamil Nadu and Kerala verdicts, being the earlier ones, in the last seven months that has held a ban on skill gaming as Ultra Vires the constitution. We hope that these judgments can nudge state governments to frame progressive policy and regulatory structure for this sunrise sector.

Ankur Singh, CEO and Founder of Witzeal Technologies Pvt. Ltd., also shared his views on the matter. He said, “We are excited to hear the judgment of the Hon’ble Court enabling us to resume business in Karnataka and provide our gaming platform to our users. This move is in line with the initiatives proposed by the FM in the Union budget to set up an AVGC task force and will further help in giving a much-needed push to gaming companies and developers. Moreover, the move will provide immense opportunity for the employment of youth by building internal capabilities to cater to domestic and international demands.”

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