Skill gaming industry body All India Gaming Federation along with real-money gaming firms Mobile Premier League (MPL), Games24x7, A23(Ace2Three), and Gameskraft have approached the Karnataka High Court appealing against the state's online gambling law that came into effect on October 5.
These firms have filed writ petitions in the Karnataka High Court on Thursday challenging the constitutional validity of amendments made to the Karnataka Police (Amendment) Act that was reportedly approved by governor Thawar Chand Gehlot earlier this week. The law had outlawed all forms of online gaming where transfer of money is involved.
The amendment came against the backdrop of public interest litigation filed in the Karnataka High Court to prohibit online gambling. However, it removed the distinction between the game of skill and game of chance, thereby bringing skill-based gaming startups under its purview.
Moneycontrol was the first to report on October 6 that several gaming platforms including MPL, Games24x7 (RummyCircle, My11Circle), Ace2Three, and RummyCulture among others had started blocking access to residents in Karnataka after the state government notified the online gambling law with immediate effect on October 5. Fantasy sports major Dream11 however continues to operate in the state.
The petitions by All India Gaming Federation, Games24x7, A23(Ace2Three), and Gameskraft were previously reported by G2G News but the petition by Mobile Premier League was previously unreported.
"The industry was very optimistic when there were some media reports about government officials wanting to seek two months to review the amendment. However, since it has now become a law, as the apex industry body, we had notified our member companies to block Karnataka from the day to become a law. Needless to say, at this juncture, the industry has no option and are forced to challenge this in court and seek legal recourse." All India Gaming Federation CEO Roland Landers told Moneycontrol in a statement.
Over the past year, several Indian states like Andhra Pradesh, Telangana, Tamil Nadu and Kerala have banned or tried to ban real-money games. Madras High Court had struck down the suspension order in August while Kerala High Court overturned the Kerala government’s order last month. The Supreme Court also upheld fantasy sports as a game of skill in July this year.
South India is a big market for games like Rummy which has a pretty good concentration in the southern states, Nazara Technologies chief executive Manish Agarwal had told Moneycontrol on October 7. He had also said more clarity is expected to emerge in the country's real-money gaming market in the forthcoming quarters.
"In the last two months, there have been more positives than negatives (in the sector). I'm seeing that state governments are losing battles in their respective high courts and judgements are becoming sharper and clearer where there are black and white rather than grey" Agarwal said "Given that the space is so large and new, there will be constant challenges but our view is that over the next four to eight quarters, things will start becoming more clear and firm"
India had around 80 million real money gamers in 2020, which is expected to grow to 150 million by 2023, according to an EY-All India Gaming Federation report. The industry will be worth $2 billion by 2023 in terms of rake fees earned, the report said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
