Mumbai: The Karnataka high court on Monday struck down the amendments to the Karnataka Police Amendment Act in 2021 that prohibited certain online gaming activities in the state.
The judgement comes as a relief for online fantasy sports and online gaming companies such as Dream11, Mobile Premier League, Games24X7 and Ace2Three who had suspended operations in the state after the ban came into effect on 5 October last year.
In October, the state government had prohibited and criminalised playing of games of skill including online games by risking money or otherwise by amending the Karnataka Police Act, 1963.
The provision was challenged by Skill-gaming industry body All India Gaming Federation, fantasy sports industry body Federation of Indian Fantasy Sports and real money gaming firms such as Mobile Premier League, Games24X7, A23, Junglee Games, Gameskraft and Pacific Games who moved the high court against the law.
The high court on 22 December reserved its judgement in the case after concluding the hearings from a series of petitioners that included industry associations, gaming companies and individuals who had challenged the constitutional validity of the state’s new online gambling law that came into effect on 5 October.
On Monday, the division bench comprising chief justice Ritu Raj Awasthi and justice Krishna S Dixit declared certain provisions of the Karnataka Act number 28/2021, to the extent the provisions pertaining to regulate online gaming activities, "to be ultra vires to the Constitution of India."
All India Gaming Federation CEO Roland Landers welcomed the judgment that comes in succession of the positive judgements for online skill gaming by the Kerala and Madras HC in 2021. "With the FM’s announcement of AVGC task force that will give a major boost to the game development sector, we look forward to bringing in massive employment, through direct and indirect jobs and becoming a meaningful contributor," he said.
Games24X7 vice president corporate and regulatory affairs Dinker Vashisht, said he hopes that these judgements nudge state governments to frame progressive policy and regulatory structure for this sunrise sector.
Witzeal founder and CEO Ankur Singh too welcomed the order enabling the industry to resume business in Karnataka and provide gaming platform to users. "This move is in line with the initiatives proposed by the FM in the Union budget to set up an AVGC task force and will further help in giving a much-needed push to gaming companies and developers," he added.
“I am sure all state governments will also support the industry to realise its true potential, both for employment opportunities and revenue generation which can also be a big contributor to the GDP,” said Baazi Games co-founder and COO Puneet Singh. “This will also boost the investor sentiment towards the segment.”
PlayerzPot co-founder Mitesh Gangar said it will pave the way for all brands to start its operations in Karnataka. "The state contributed to a sizable chunk of user base and revenue for us and this ban uplift will allow our users to come back to skill-based gaming," he added.
India is the fifth largest online gaming market globally with 80 million skill-based gamers in 2020 which is expected to grow to 150 million by 2023 according to an EY-All India Gaming Federation report. The sector is expected to generate revenues in excess of $3 billion by 2025.
