The law applies to all. That was the conviction made by Karnataka Home Minister Araga Jnanendra, in his warning that all online gambling operators—local players and even foreign companies—will not be spared in the state’s crackdown on the sector.
No one is spared in Karnataka, even foreign companies
It can be recalled that the Karnataka Police (Amendment) Act 2021 took effect on October 5, giving the state government the power to ban all types of online games with betting involved. The ban covers even online chess, fantasy sports, poker, and bridge, among other online games with real money gaming involved—and state officials warn that those who run games of chance camouflaged as games of skill also run the risk of getting up to three years in jail along with a penalty of up to Rs 1 lakh.
Now, Jnanendra is making it clear that the “law applies to all,” which means that even real money online casino operators will face the might of law enforcement even if they’re a company from a foreign country.
“The law applies to all. We will not discriminate whether the lawbreaker is an Indian or a foreign gaming company,” the home minister told the Economic Times.
The All India Gaming Federation (AIGF), a group of skill-based gaming companies operating in India, said its members have already geo-blocked Karnataka in compliance with the law—although they are still waiting for the state high court to rule on their petition seeking clear guidance on the Karnataka ban. According to AIGF CEO Roland Landers, they had already pointed out the prevalence of “illegal foreign gambling apps functioning unfettered in the state” since 2018.
“As an industry, we had pointed out earlier that such operators will not stop their illegal gambling platforms nor stop users from accessing services from the grey market. Tax-paying, homegrown online skill gaming companies including many online gaming startups have been most impacted in the end,” Landers said.
Stakeholders waiting for the high court to rule in their petition
The state government said the ban aims to wean people away from the vice of gambling. away people of Karnataka from the vice of gambling. The ban, however, succeeded only in sowing even greater confusion, particularly among operators who have already sought the help of high courts to provide clear guidance on what is and isn’t allowed to operate in the state.
To date, six petitioners have already approached the state high court to appeal against the Karnataka gambling laws. Aside from AIGF, Junglee Games, three real money gaming companies, and gaming unicorn Mobile Premier League are challenging the constitutional validity of the Karnataka Police (Amendment) Act 2021.
In its petition, the AIGF noted: “The playing of games of skill is also a form of speech and expression. The Amending Act, by imposing unreasonable fetters on this freedom of speech and expression is violative of Article 19(1)(a) of the Constitution and is not protected under Article 19(2).”
The petitioners are bolstered by the fact that there are precedents they can use in the fight to end the state gambling ban. For example, the Madras High Court has ordered Tamil Nadu to cease its ban on online gaming in the state, ruling that the ban goes against Article 19(1)(g) of the Constitution which confers the right to practice any lawful profession, occupation, trade or business to all citizens.
“The problem with the amendment is the fact that it unilaterally declared games of skill as tantamount to gambling if the buy-in is involved. This petition will harm the domestic online gaming industry, and we took this action to protect its interests,” AIGF CEO Roland Landers told Inc42.
