Karnataka Passes Bill Banning Online “Gambling”

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As the Karnataka Assembly passed amendments to the Karnataka Police Law severely affecting the online gambling industry, the industry is hoping for a clarification of the bill regarding the exclusion of “skill games”. “.

In accordance with the bill tabled and adopted in the Karnataka Assembly, the state plans to ban all online gaming formats involving an entry fee or registration fees.

IndiaTech, an industry body representing start-ups like Dream11, MPL, Zupee, among others, sent a letter to Karnataka Chief Minister Basavaraj Bommai, asking for clarification that the amendments to the bill will not apply to online skill-based games and sports.

“We have called on the Chief Minister and the Home Secretary to immediately issue the necessary statements to ensure that the right signals are sent to the startup and investor community. Multiple court orders have well established the legality of games of skill even when money is involved and therefore should not be interpreted as gambling or betting or betting, ”said Rameesh Kailasam, CEO of ‘IndiaTech.org at BusinessLine.

He added that the Karnataka government should issue guidelines in an appropriate manner, in consultation with the industry to ensure its goal is aligned with the industry on cracking down on gambling and betting.

The CEO of the All India Gaming Federation, Roland Landers, said: “First we need to see if there is any clarification on the bill. We will wait for the final notification, to see if there are any changes in the tone or language of the invoice. Based on this, we will strategize the way forward.

As a result of various state regulations, online games operating in formats such as Online Fantasy Sports (OFS) and Online Rummy have had to prove the dominance of skill in their respective formats. States like Telangana, Andhra Pradesh, Assam, Odisha, Nagaland and Sikkim have banned online rummy. However, a similar ban was not passed in Tamil Nadu, where the High Court has ruled that online rummy involves strong dominance of skills and therefore cannot be considered a game, even when played with it. issues.

Impact on players

“The state government’s decision to pass the Karnataka Police Compliance Act (Amendment) 2021 is a real setback for the large community of professional gamers who reside in the state. These players, who represent India in national and international tournaments such as the 2018 Asian Games and the World Series of Poker, see this globally accepted sector as a livelihood, which has already seen a severe impact due to the Covid-19 pandemic. “said PK Misra, president of the Players’ Association – AIGF (Ex-IAS).

The bill is expected to impact all gaming formats, including casual games, strategy games, and even electronic sports. “While the bill says it aims to ban online gambling, what actually happened is that it banned everything, including games of skill. So anyone who wanted to pay an entrance fee and play a game of fast paced, fantastic cricket on MPL would in fact not be allowed to do so, ”Landers said.

Impact on start-ups and jobs

According to the EY-All India Gaming Federation (AIGF) report, “Online Gaming in India – The GST Conundrum,” India’s online gaming industry hit around $ 1 billion in 2020 and is expected to reach $ 2 billion. of dollars by 2023 in terms of commission fees. won.

“Karnataka’s decision could have a negative effect on growth and investment in the industry. Currently, Karnataka is home to more than 91 game companies and developers, employing around 4,000 people. The bill, in its current form, will have a severe impact on these businesses, in the form of lost income and jobs, and stifle growth in this sector. said Kazim Rizvi, founder of a public policy think tank, The Dialogue.

Earlier this week, the Internet and Mobile Association of India (IAMAI) noted that international investors have invested around 3,000 crore in gaming and animation startups in Karnataka. The industry body added that such legislation could “create a cloud of confusion and regulatory uncertainty, which could unintentionally cause investors to recalibrate their investments and many existing companies could consider exiting the state.” .

The General Secretary of the Confederation of All Indian Traders (CAIT) Praveen Khandelwal also recently wrote to Basavaraj Bommai, the chief minister of Karnataka, saying that gambling is pure gambling and should be legitimately banned. “However, by including games of skill within the scope of the bill, this not only flies in the face of established case law, but threatens the thriving gaming startup industry in India,” he said. -he adds..


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