Bangalore, February 14, 2022: The Karnataka High Court today held certain provisions of the Karnataka Police (Amendment) Act 2021, by which the state government has banned online games with stakes to be ultra vires to the Constitution and struck them down.
The Act provides maximum imprisonment of three years and penalty up to Rs. 1 lakh for violation of the provisions. A division bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit said:
"In the above circumstances these writ petitions succeed. The Karnataka Police (Amendment) Act 2021 to the extent provisions we have said, not the entire act is struck down is declared to be ultra vires to the constitution.”
"A writ of mandamus is issued restraining the respondents from interfering with the online gaming business and allied activities of the petitions.”
Similar laws banning online gaming in Kerala and Tamil Nadu have been struck down by the Kerala and Madras High Courts respectively. (Courtesy LiveLaw.in)
We bring you some early reactions from the online gaming industry:
Zupee skill based gaming platform):The recent Hon’ble High Court of Karnataka order striking down the ban against online gaming and for restraining action against online gaming businesses and allied activities sets a positive atmosphere for business growth and would help in creating made in India for the world products. The judgment makes clear the intent of new India where, misgivings, misinformation or personal reservations should not get in the way of innovation, growth, and rule of law. At Zupee we strongly believe that this verdict by the Hon’ble High Court provides the gaming industry a much need secure environment to accelerate its growth and expansion in the southern states. As most gaming enterprises in India are start-ups, it will encourage entrepreneurial spirit and reassure investor confidence in the Indian market.
India is at the forefront of gaming innovation and we have a chance to become a global gaming hub, and a secure and facilitative policy ecosystem is crucial to achieving that. Prior to Karnataka, the Kerala and Madras High Courts also struck down the bans against online gaming, providing hope to what is now considered the “sunrise sector” in India to commit fully to helping India achieve the 1-trillion-dollar digital economy dream by 2025. This judgment also reasserts the Hon’ble Supreme Court’s view that online skill-based games are perfectly legal businesses and should be allowed to run, grow and expand as would any other legitimate business.
It is important to note that most of the online Skill gaming companies are already complying with all national and state laws and regulations and will continue to do so. We would like to thank the Hon’ble High Court for providing much-needed legal clarity on the issue and look forward to resuming services in the start-up capital soon and ensuring that people there can also enjoy our games.
Bimal Julka, Chairman, FIFS ( parent company of Dream11): While we wait for the detailed judgement copy to analyse it minutely, on behalf of India's Fantasy Sports ecosystem, I would like to thank the Hon'ble High Court of Karnataka for its positive judgement on India’s Fantasy Sports industry today. The verdict is a welcome news for all the sports fans in India, the biggest market for Fantasy Sports globally, with 13 Crore+ users playing across 200+ platforms. This judgement follows other positive judgements given by Hon’ble High Court’s of states such as Punjab & Haryana, Rajasthan, Bombay that recognised Fantasy Sports as games of skill and a legitimate business activity protected under Article 19(1)(g) of the Constitution of India. The view has been further upheld by the Hon'ble Supreme Court multiple times.
In light of the above, we look forward to working with the government of Karnataka in line with the recent budget announcement and the Central Government's vision to set up an AVGC task force to encourage Indian entrepreneurs in the Fantasy Sports sector. As FIFS, we will continue to ensure a safe experience for sports fans in Karnataka and India, and enable responsible growth of the industry.
Manish Mishra , Partner, J Sagar Associates (JSA): Amidst the controversy surrounding the legality of fantasy gaming in India, the High Court judgement comes in as a big relief. The issue as to what constitutes a game of chance or a game of skill is a debatable one and has been under judicial scrutiny for a while. This judgement may also have a persuasive value for similar disputes in other States and one hopes that certainty in this regard is achieved soon. However, it may be required for the State and Union Government to draw out detailed guidelines with regard to the online gaming and gambling sector on consultation with the stakeholders and provide a legal and regulatory framework for the sector, so that such disputes can be avoided in the future and also the undesired elements of gambling can be filtered out appropriately.
Puneet Singh, Co-founder and COO, Baazi Games: It’s a great day for the RMG industry. This segment is being recognised again and again specially from top judicial institutions of the country. Even the central government has been showing support to the gaming industry as seen in the recent budget presented by the Hon’ble FM. I am sure all state governments will also support the industry to realize its true potential, both for employment opportunities and revenue generation which can also be a big contributor to the GDP. This will also boost the investor sentiment towards the segment.”