Karnataka passes bill to ban online 'games of chance'; CAIT calls it ‘setback to startups’

In order to ban virtual gaming and curb online gambling, Karnataka Assembly has passed the Karnataka Police (Amendment) Bill, 2021. The bill, introduced by state Home Minister Araga Jnanendra, comes after several complaints regarding cyber fraud.

The bill states that “games mean and include online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of the money paid before or after the issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance.” The bill to amend Karnataka Police Act of 1963 does not include lottery, wagering, betting on horse races on any race course inside or outside the state.

The newly passed bill in the Karnataka Assembly includes using cyberspace (computer resources or any other communication device) as defined in the Information Technology Act, 2000 in the process of gaming to curb online gaming and gambling through internet and mobile apps. The Bill also provides for enhancing punishment extending to three years of punishment and fine up to Rs 1 lakh.

As per this bill, punishment for the first offence will be 6 months imprisonment and fine of Rs 10,000 and one year of imprisonment and fine of Rs 15,000 for the second one. In case of the third offence, punishment will be 18 months imprisonment and fine of Rs 20,000. Those found aiding such online gambling will also be punished.

Karnataka government’s push against online gaming and gambling can impact indigenously developed online gaming platforms such Dream 11, Mobile Premium League, Games 24x7 and several others. Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal has urged the Karnataka Chief Minister Basavaraj Bommai to reconsider this decision as it can prove to be a “setback to Indian startups”.

“Sir, the bill, will hurt the Indian startups sector, the Indian gaming and animation industry and millions of Indian gamers and esports players across the country. It will lead to massive job losses in Bengaluru where more than 90 small and bid Indian gaming companies are registered which employ over 4,000 people, and will also have an effect on various other developers and animation studios,” Khandelwal said in his letter to the Karnataka CM.

The letter further read, “Unfortunately, the Karnataka bill does not distinguish between a game of skill and a game of chance. Game of chance is pure gambling and should be rightfully banned. However, by including games of skill in the ambit of the bill, it has not only gone against established jurisprudence by the Honorable Supreme Court and Karnataka High Court but threatens the thriving Indian gaming startup sector.”

Edited by Mehak Agarwal; with agency inputs

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