Bengaluru: High Court of Karnataka earlier in the day, has ruled against the state’s recent online gambling law and has termed it as unconstitutional, providing a major relief to the skill-based gaming firms that had shut down operations in the state.
A division bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit delivered their verdict against the petitions filed by All India Gaming Federation and others challenging the validity of the amendment.
The state government had tabled and passed The Karnataka Police (Amendment) Bill, 2021, which, among other changes, has banned “any act of risking money, or otherwise on the unknown result of an event including on a game of skill.” While The petitioners contended that the inclusion of skill within the ambit of gaming is beyond the legislative competence of the state, which has no legislative competence to regulate online gaming.
The Govt of Karnataka defended its amendments, saying that the change is within the legislative competence of the state Legislature. Whether any game is ‘game of skill’ or ‘game of choice’ is a pure question of fact and can only be ascertained after examining the nature of the game, the state argued.
Reacting to the verdict of Karnataka High Court some of the key players in the online gaming sector welcomed the same while demanding a constructive regulation without affecting the scope of future growth of fantasy sports in the country.
Commenting on the Karnataka High court’s judgment, Mr. Roland Landers, CEO, All India Gaming Federation stated, “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.
Furthermore, with the Hon’ble FM’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.”
“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” from Puneet Singh, Co-founder and COO, Baazi Games
Bimal Julka, Chairman – FIFS said, “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.”
Mitesh Gangar, Co-Founder, PlayerzPot said, “It is a major relief by Karnataka High Court and will pave the way for all brands to start its operations in Karnataka. The state contributed to a sizable chunk of user base and revenue for us and this ban uplift will allow our users to come back to skill-based gaming. Gaming is growing day by day in India and such positive impact decisions will help the industry to grow at an accelerated rate. We believe that in drafting any regulations the stakeholder of the business should get a fair opportunity to put forward their point to avoid any similar bans ahead. The future of gaming in India is bright and this ruling is in favour of the anticipated growth trends of the industry. Lastly, we are keeping our firm footing for being a responsible gaming and will endeavor to maintain it.”
“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,” said Dinker Vashisht, Vice President Corporate and Regulatory Affairs, Games24x7
Welcoming the Karnataka High Court’s judgment, Ankur Singh, CEO & Founder of Witzeal Technologies Pvt. Ltd, 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.”