AIGF, Gaming Startups File Writ Petition Challenging Karnataka’s Online Gaming Ban

The All India Gaming Federation (AIGF), an industry body of ‘skill-based online gaming’, and three online gaming companies have filed writ petitions in the Karnataka High Court on Tuesday challenging the constitutional validity of the Karnataka Police (Amendment) Act 2021. 

These companies include Head Digital Works Private Limited (A23), Play Games24x7 Private Limited (RummyCircle and My11Circle), and Gameskraft Technologies Private Limited (RummyCulture and Gamezy). 

With the Karnataka High court on Dussehra vacation until the 16th of October (Saturday), the petitions are unlikely to be listed for hearing before the court resumes functioning on the 18th (Monday).

Roland Landers, CEO of AIGF, said in a statement to Inc42, “We have no problem with the government tackling foreign gambling companies, in fact, we have taken a strong stand against that as an organisation and will continue to do so”.

“The problem with the amendment is the fact that it unilaterally declared games of skill as tantamount to gambling if buy-in is involved. This petition will harm the domestic online gaming industry, and we took this action to protect its interests”, he added.

according to a report by G2G News.

These petitions come just months after a landmark Madras High Court judgement struck down a similar Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021 that banned online games that were played with real money on stake. 

The first bench consisting of Chief Justice Sanjib Bannerjee and Justice Senthilkumar Ramamoorthy passed the order after online-gaming companies filed cases. The court held that the ban goes against Article 19(1)(g) which confers the right to practice any lawful profession, occupation, trade or business to all citizens. 

The state had informed the high court that it had put the ban in place because online betting games have led to many suicides. It argued that playing online games like rummy and poker are addictive.

The central conflict here is whether games like rummy and poker are ‘games of luck’ or ‘games of skill’. While the former is disapproved of, the latter is considered to be acceptable. 

In 1967, the Supreme Court of India held that the thirteen card game of rummy is not ‘a game entirely of chance’. This meant that the game may be allowed in clubs where the organisation does not profit from the game. 

Just two weeks ago, the Kerala High Court quashed the ban on online rummy imposed by the state government. The Kerala government had issued a notification which imposed a ban under the Kerala Gaming Act, 1960.

The bench of Justice TR Ravi held that the notification was against Article 19(1)(g). The court also stated that “playing for stakes or not playing for stakes can never be the criterion to find out whether the game is a game of skill and not of chance”. 

The online gaming market in India grew at a CAGR of 17.3% from $543 Mn in 2016 to $1.027 Bn in 2020. India also moved to the top global spot in mobile game downloads in the first nine months of 2020 with 7.3 Bn downloads. 

But this growth does not come without hurdles. Online gaming startups are forced to navigate a labyrinth of compliances as each state has different rules and regulations regarding the industry. With no centralised framework at the union level, lawyers are also game-testers for these companies.

Before release, each game has to be scrutinised by an army of lawyers who have to check the flow and user journey to ensure that they don’t violate any national or state laws. 

These are some of the reasons the gaming industry cites when pushing for self-regulation. The question as to whether self-regulation works in India, in either public or personal matters, is a question for another day.