Karnataka High Court has directed the state government not to take any coercive action against Dream11 founders until November 9 over the state's online gambling law that came into effect on October 5.
Last week, Dream11 co-founders Bhavit Sheth and Harsh Jain had moved to the Karnataka High Court, seeking to quash an FIR filed by Karnataka Police, which was the first such case under the new law.
The case was registered by Annapoorneshwarinagar Police in West Bengaluru under Section 79 (keeping common gaming house) and 80 (gaming in common gaming-house) of the Karnataka Police Act, 1963, based on a complaint by 42-year-old cab driver Manjunatha.
Dream11 co-founders had alleged in their petition that the case was registered on the basis of "bald and vague allegations" made by the complainant, at the behest of its business competitors with a "mala fide intention of brushing the colour of gambling, betting and wagering to the activities of fantasy sports carried on the Dream11 platform."
Dream11 had continued operations in Karnataka even after the law had come into effect, while several platforms had immediately started blocking access to residents in Karnataka.
The fantasy sports major had said the law does not apply to members of the Federation of Indian Fantasy Sports (FIFS), a self-regulatory industry body for fantasy sports, since the format "has been upheld by the Courts of India as not amounting to gambling, betting or wagering".
That said, it had announced a suspension of operations in Karnataka from October 10 to allay "deep concerns and anxiety" from its users in the state and said this move "is without prejudice to our rights and contentions under law".
Moneycontrol had reported on October 24 that Dream11 has stopped allowing only those users in Karnataka who have a bank account within the state, from entering paid contests on the platform. Meanwhile, other platforms such as Mobile Premier League, Junglee Games, Adda52 and Games24x7-owned My11Circle have placed geoblocking restrictions on users within the state.
Karnataka High Court is also hearing petitions filed by skill gaming industry body All India Gaming Federation and real-money gaming firms such as Mobile Premier League (MPL), Games24x7, A23(Ace2Three), Junglee Games, Gameskraft and Pacific Games. These petitions challenge the constitutional validity of amendments made to the Karnataka Police (Amendment) Act.
Advocate Arvind P Datar, appearing for All India Gaming Federation, had argued that Karnataka's recent amendment makes no distinction between the game of chance and game of skill. However, the government had submitted to the high court the law was aimed at saving the youngsters from gaming addiction and falling into deep debts.
On October 22, a single-judge bench of Justice Krishna S Dixit had told the Advocate General
appearing on behalf of the state government not to make any arrests under the new law.