Industry bodies, trade assoc flag risks of Karnataka Bill banning online gambling
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Industry and trade bodies say that the bill, tabled in the Karnataka Assembly, to ban online gaming and betting in the state also bars game of skill and will lead to loss of livelihood.
A number of industry and trade bodies have appealed against a bill tabled in the Karnataka Assembly that will ban online gambling or betting in the state and provide for a maximum imprisonment of three years or a fine of up to Rs 1 lakh for any violation. The Karnataka Police (Amendment) Bill, 2021 seeks to amend the Karnataka Police Act of 1963 to state — "games means and includes online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of the money paid before or after the issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance."
The bill does not include lottery or wagering or betting on horse races run on any racecourse within or outside the state. However, industry associations say this brings games based on skill under its ambit, which will lead to loss of jobs and livelihood.
The All Indian Gaming Federation said that Bengaluru is the country’s start-up capital and that this may hamper its image. Maintaining that legal jurisprudence on the matter is clear and that courts have said that Entry 34 (under which Betting and Gaming come) of the State List under the Constitution, from where the Karnataka amendment traces its power, “cannot be used to regulate games of skill, and can only be used to ban/ regulate games of chance.”
Roland Landers, CEO, All India Gaming Federation (AIGF) said that skill-based gaming is a sunrise sector and is giving birth to an increasing number of unicorns within the country, especially in Karnataka. ”The sector has been a strong financial contributor to the Indian economy even during an unprecedented period of slowdown and is further expected to generate revenues in excess of $3 billion by 2025. The move by the Karnataka government in tabling the Karnataka Police (Amendment) Compliance Act, 2021 act can be seen as a setback to the state’s reputation of being a tech-hub and start-up capital,” he said.
AIGF added that in the garb of including online gambling, the government is also trying to slide in games of skill. It added that in its current form, the law can affect livelihoods.
“The draft bill will also prohibit games like online chess, archery, online quiz games, other Indian games, all digital versions of traditional sports, including games included in Asian Games and Olympic Virtual Series. In the backdrop of Asian Games announcing that 24 medals will be awarded for eSports at the next year’s edition, this law can be very problematic for the professional gaming players as this may affect the livelihoods and income of these gamers living in that state,” it states.
The Internet and Mobile Association of India (IAMAI) said that the bill appears to have been drafted “without considering the various legal and constitutional positions by including a wide definition of 'gaming' in amendments against various Supreme Court and High Court judgments.”
IAMAI also echoed the views of AIGF and said the bill may hurt Karnataka’s position as the country's startup hub and lead to the loss of jobs and revenue for the state.
“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 crore in gaming and animation startups in the state,” it said.
It added the state usually develops futuristic policies to support new and disruptive technologies and has a regulatory framework conducive to startups working in emerging technologies, and that it is hopeful that the government will relook at the bill.
“Legislative actions such as this, may create a cloud of confusion and create regulatory uncertainty, which may unintentionally result in investors recalibrating their investments in the state and many existing companies may consider shifting base from the state,” it added.
The Confederation of All India Traders (CAIT), too, in a letter to Karnataka Chief Minister Basavaraj Bommai, said it has received multiple representations and appeals from Indian companies and developers, industry and trade bodies regarding the same, and how this will lead to job and industry loss “of great magnitude” and push the Indian gaming sector back by many years.
“Online gaming is now one of the most popular pastimes and sports across the globe and in India. Millions of people in India play online games like chess, archery, quiz, etc. More importantly, there is a large ecosystem of game designers, developers, content creators, broadcasters, marketers, animators. Over a million people's livelihood depends on this sector in India,” CAIT National General Secretary Praveen Khandelwal said.
He too said that while gambling should be banned, games of skill should not. “Once the bill bans online skill games, the law-abiding Indian companies will exit the market and the users will turn to harmful offshore and betting apps, which is harmful and dangerous,” he added.
The bill was introduced after the state government had informed the High Court in July that it had drafted it during a hearing on a petition seeking a ban on all forms of online betting and gambling. Last November, Tamil Nadu had promulgated an ordinance banning online gambling, and earlier this year, Kerala imposed a ban on online rummy games.
