On Friday, the Karnataka High Court ordered the state government to refrain from pursuing any action under the Karnataka Police (Amendment) Act 2021, which prohibits all forms of online gambling and betting in the state in the case of all India Gaming Federation V. State Of Karnataka.
On October 5, the Amendment Act was signed into law. It prohibits wagering or betting in any form, including tokens valued in terms of money paid before or after their issuance. Virtual currency and electronic fund transfers in connection with any game of chance are also prohibited. The maximum penalty for violating the Amendment Act is three years in prison and a fine of up to one lakh rupees.
The Court was considering a petition filed by the All Indian Gaming Federation and others challenging the Amendment Act’s legitimacy. The new amendment has also been challenged in the High Court by Junglee Games India Private Limited, Head Digital Works Private Limited, and Play Games 24×7 Private Limited.
On October 27, Justice Krishna S Dixit announced that he would hear all of the applications challenging the Amendment Act. When the case was heard on Friday, Senior Advocate Arvind Datar, who was representing the petitioners, contended that the Supreme Court had ruled that if there is any degree of skill involved, it is not a gamble. It enters the area of contract law. The Court was advised that if it is solely based on chance, it falls under the category of gambling and betting.
According to the petition, the amendment has imposed a blanket ban on all forms of skill games involving wagering and betting. According to the plea, the Amendment Act broadened the scope of the illegality of online games involving virtual currency and electronic cash transfers. The petitioners claimed that it had harmed their fundamental right to freedom to practice any profession or engage in any occupation, trade, or business.
Furthermore, it is claimed that the Act treats ‘online games of skill,’ such as chess and bridge, as illegal gambling. The petitioners allege that the Amendment Act groups activities that are addressed differently and apart from gambling. The petitioners urged the Court to declare the Act unconstitutional because it restricts legitimate economic activities in the same way as “illegal gaming activities” are restricted.
