In a bid to end all forms of gambling and betting in the state, the Karnataka legislative assembly passed a bill to amend the Karnataka Police Act, 1963 earlier today. Introducing the new Karnataka Police (Amendment) Bill, 2021, the state’s home minister, Araga Jnanendra said that the amendment to the existing law was necessary to help the police tackle gambling and betting more efficiently. Stating that it will prohibit all wagering, betting and all types of gambling except lottery and horse races, the Jnanendra told the legislative assembly that there is a dire need to control the rampant gambling happening using electronic devices.
The amendment comes in the backdrop of a recent Karnataka High Court order that barred the police from carrying out raids at gambling dens. “Despite police booking cases and arresting people involved in such activities, the latter used to get bail with ease and restart their activities. The new bill will address these shortcomings and make the offence cognizable. The bill also provides for higher punishment and penalty,” said Jnanendra, according to the Times of India.
The bill further seeks to “include the use of cyberspace including computer resources or any communication device as defined in the Information Technology Act, 2000 in the process of gaming to curb the menace of gaming through the internet, mobile apps”.
Karnataka Chief Minister Basavaraj Bommai said that major gambling in the state continues in an organised manner at many places. Asserting that the new bill will enable the police to curb online gaming, Bommai said, “As of now, there is no effective law to curb these activities. Under the current legislation, police had to take court’s permission even to raid gambling center.”
However, opposition leaders and industry experts have expressed skepticism on how the bill will be effective in tackling the online gaming menace. Congress leader Ramesh Kumar said that since the people who handle online gaming platforms are sitting in remote locations, the bill could be least effective in managing the crimes.
The bill could also have a considerable impact on the Indian skill-based gaming startups. Industry experts have raised concerns that the bill will remove the distinction between a game of skill and game of chance. The Federation of Indian Fantasy Sports (FIFS) noted that the bill will be levying penalties and punishments on legitimate gaming start-ups too by treating them at par with illegal online gaming, betting and wagering platforms.
The FIFS, which counts Dream11 as its founding member, released a statement saying, “We request the Karnataka government to remove any ambiguity or uncertainty in the bill to ensure continuity and growth of the fantasy sports sector in the State. FIFS and its members strongly believe that certainty is integral to the rule of law and hence the bill needs to provide certainty and clarity to businesses, the investor community as well as consumers for the orderly growth and development of the industry.”
Noteworthy, the Madras High Court has recently struck down a similar law on online gaming passed by the Tamil Nadu legislative assembly. Even the Supreme Court has earlier recognised the difference between game of skill and game of chance.
Urging the government to relook the bill, the secretary general of the Confederation of All India Traders (CAIT), Praveen Khandelwal wrote to the Chief Minister of Karnataka, saying, “A game of chance is pure gambling and should rightfully be 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.”
Stating that the bill will have a huge negative impact on the Indian startups, gaming and animation industry and millions of its users, Khandelwal added, “The bill to ostensibly ban online gambling or betting makes all online games of skill, which charge a small entry or registration fee, illegal. The bill only affects the Indian companies, which mostly charge a small registration fee to play their games, and will not affect other foreign games, where children spend thousands of rupees on in-app purchases. The bill will also prohibit Indian games like Chess, Carrom, Archery, Hockey and digital versions of traditional sports.”
The Internet and Mobile Association of India (IAMAI) said that the bill has been passed overlooking several legal and constitutional positions. “IAMAI is hopeful that the state government will continue to take a progressive stand and relook at the bill to bring it in line with the Supreme Court and various High Courts’ judgments and help create a vibrant, inclusive, globally competitive, and sustainable startup ecosystem in Karnataka. There are 92 gaming companies registered in Bengaluru which employ over 4,000 people. In the past three years, international investors have invested around Rs 3,000 crores in gaming and animation startups in the state,” said the organisation in a statement.
According to a report by Digital Journal, the online gambling market in India is expected to grow over a significant CGAR of 21.93 percent to reach $9164.42 million. The growth is mostly attributed to the high internet penetration in the country, the growing use of tablets and mobile phones, and the escalating awareness on latest technologies.