Karnataka High Court overturns ban on online games of skill

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In 2021, the Karnataka government introduced amendments to the Karnataka Police Act 1963, which has come under constant criticism and scrutiny. The amendment prohibited and penalized betting, gambling and online games (without distinguishing between games of chance and games of skill).

Interestingly, Section 176 of the Karnataka Police Act 1963 (which provided an exception to “games of skill”) read as follows: “For the avoidance of doubt, it is hereby declared that the provisions of Articles 79 and 80 do not apply to the practice of a game of pure skill and to betting by persons taking part in such a game of address.” It seems surprising that the amendment seeks to omit the phrase “and wagering by persons taking part in such a game of skill”thus partially removing the exception granted to games of skill.

The Petitioner (All India Gaming Federation) has filed a Brief Petition[1] challenging the constitutional validity of the provisions introduced by the amendment. The main reasons invoked by the applicant were the following:

1. The Government of Karnataka has no legislative competence to introduce such an amendment as it does not fall under Entry 34, List II, Schedule VII of the Constitution of India;

2. Violation of the “right to life and liberty” under Article 21 of the Indian Constitution, which includes the right to play games and sports;

3. Violation of the fundamental right to freedom of speech and expression under Article 19(1)(a) as playing a game of skill is a facet of speech and expression;

4. Violation of the fundamental right “to practice a profession or engage in any profession, trade or business” under Article 19(1)(g) of the Indian Constitution;

5. Non-recognition of the difference between a “game of skill” and a “game of chance” which has been settled by many Indian judicial bodies (including the Supreme Court of India).

On the other hand, the defendant claimed that the proliferation of online gaming platforms that allegedly engage in “betting and betting” has proven to be detrimental to the public interest and public order. The Respondent further mentioned that if people were content to play a game of chance or a game of skill without risking money or nature, they would not be subject to the criminal provisions of the law. However, counsel for the respondent did not dispute that online games of skill, when played with monetary stakes, would be prohibited under the amended law.

The Karnataka High Court (see its judgment of February 14, 2022) issued a writ of mandamus restraining the government of Karnataka from ‘interfere with the online gambling activity and related activities of petitioners and further reversed various provisions introduced by the amendment. The Court concluded that “The amendment does not critically adjust the boundaries of the existing category of protected activities, i.e. games of skill with unprotected acts of gambling. Instead, the state has created an entirely new category of medium-based regulation where the change of medium in itself does not alter the true nature and content of the games. Accordingly, the Court recognized that the parallel prohibition of online games and the exclusion of games of skill through the amendment of the law were unreasonable and unjustified.

The Court further clarified that “Nothing in this judgment shall be construed as preventing the passing of appropriate legislation relating to the subject of ‘betting and gambling in accordance with the provisions of the Constitution’. In light of this, it will be interesting to see if the Karnataka government comes up with any specific legislation to regulate the online gambling industry.

This judgment is in line with recent court decisions from the Madras High Court as well as the Kerala High Court which struck down the provisions of the respective state laws which sought to prohibit online gambling (without providing any specific exception for ” games of skill”). This ruling brings major relief to India’s burgeoning online gaming industry, as it indicates that the intention of the law is not to impose a ban on online games of skill.

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