Karnataka proposes ban on online games involving betting and gambling

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The South Indian State Government – Karnataka, home to India’s Silicon Valley aka Banglore, has proposed a law banning online gambling and gambling activities involving elements of betting and gambling. with the aim of curbing the growing dependence on gambling among the rural youth population. .

The government of Karnataka has introduced a bill proposing an amendment to the “Karnataka Police Act” to include online gambling, seeking to prohibit “any act of risking money, or otherwise on the unknown outcome of ‘an event, including on a skill game,’ according to the bill seen by Reuters.

The bill was proposed for the sole purpose of “protecting” rural youth from becoming “habitual gamers”. Government officials say the state’s rural youth population is left inactive due to lockdowns induced by the coronavirus pandemic and stays at home most of the time. Although the bill seems surprising at first glance, Karnataka is not the only Indian state to ban online games involving cash prizes and gambling elements. It is the 4th state after Telangana, the Tamil Nadu and Andhra Pradesh to present such a bill.

Importantly, the bill will directly affect the major fantasy gaming platforms in India – Dream11 and Mobile Premier League (MPL), which offer fantastic cricket and soccer games with the prospect of making money. Some industry sources spoke to Reuters and said:

The business of MPL, Dream11 and everyone in the industry will suffer. These states are important – they account for about 20% of the (total) activity of these companies.

Due to the covid-induced lockdowns across the country, the online gambling industry in India has grown tremendously to the point that foreign investors are showing great interest in gaming startups and investment funds. According to a report by the All India Gaming Federation, India currently has more than 400 online gaming startups and will have 550 million online gamers by 2022, a staggering growth from 360 million online gamers in 2020. The gaming industry should be worth more. over $ 2 billion by 2023, making it the fourth largest gaming market after China, the United States and the European Union (EU).

While the Dream11 and MPL platforms have grown tremendously over the past few years, legislation like this will directly hurt their business model and make it incredibly difficult for them to make a profit. Dream11 is also looking to be listed in the US by early next year, which will become more difficult after losing 20% ​​of its total business due to said gaming bills.

Sandeep Chilana, a New Delhi-based lawyer, spoke to Reuters and said these laws have weak legal status as the Supreme Court has repeatedly ruled that games of skill – like fantasy cricket – are not like gambling which remains largely banned in India.

“Indian states are going too far and will face legal challenges in banning such games of skill,” said Chilana.

The potential ban of one of India’s biggest esports tournament sponsors will also hurt professional players, said the Esports Players Welfare Association, a non-profit organization for online gamers.

“Games and electronic sports are areas where skills can be developed, so it’s not a sinful activity,”The group said.

Businesses affected by such bills are likely to form a group and move to the Supreme Court of India in the hope that the court will overturn these laws and provide legal protection to businesses against such bills in the to come up.

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