Industry bodies urge Karnataka to reconsider gambling ban

Less than a week after the Karnataka government tabled a bill to ban online gambling in the state, two industry bodies have opposed the move. In a statement yesterday, the Internet and Mobile Association of India (IAMAI) said the new bill “appears to have been drafted without considering the various legal and constitutional positions” and has a “wide definition” of the term gaming.

“IAMAI is of the view that 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 INR 3,000 crores in gaming and animation startups in the state,” the industry body, which counts several gaming companies among its members, said.

Further, trader’s association CAIT (Confederation of All India Traders) also wrote a letter to the state government of Karnataka urging it to reconsider the bill. The industry body said that the new bill doesn’t make distinctions between games of skill and games of chance. The Supreme Court has ruled in the past that games of skill should be legal in India even if they involve betting.

The bill tabled in Karnataka is titled Karnataka Police (Amendment) Act, 2021 and seeks to ban all forms of wagering and betting, and provides for imprisonment of three years and a penalty of up to Rs. 1 lakh. 

Karnataka’s Home Minister, Araga Jnanendra, told ThePrint that the state wants to “ban all games” that will involve “profiting, betting and stakes”. It was tabled on September 18. 

Jnanendra said that Karnataka had taken cures from the Madras High Court’s decision last month. The court had struck down a similar legislation in Tamil Nadu last month, calling it unconstitutional. “We welcome the forward-looking judgment. We sincerely hope that this will set the tone to establish a robust regulatory framework for the online gaming sector," Sameer Barde, chief executive of The Online Rummy Federation told Mint at the time. “We will be keen to collaborate and support the government of Tamil Nadu in developing a comprehensive regulation, which will address all issues of the state, citizens and the sector alike," he added.

Gambling in India is a state subject, which means that states can choose to make it illegal within their borders. However, industry bodies like The Rummy Federation, Federation of Indian Fantasy Sports (FIFS) and even the IAMAI have urged state governments to regulate games like rummy, poker and fantasy sports instead of outright bans.