The recent Karnataka Police Act has put many skill-based online gaming companies into a dilemma. Amid the state government’s move to ban gambling, both startups and players seek clarity over the new bill.
Many Indian gaming startups and associations have expressed their concern about the Karnataka Police Act, 2021. As Karnataka is a major hub in the startup ecosystem, companies are seeking clarification over the ban on skill-based games.
Karnataka Police Act, 2021 Bans Gambling in the State
In order to ban all forms of online gambling, the Karnataka government has passed a bill to amend the Karnataka Police Act, 1963. The new bill aims to make gambling a non-bailable offence. These online games include all forms of wagering and betting games.
As per the bill, first-time offenders will be punished with a fine of INR 10,000 and imprisonment of six months. Second-time offenders will be punished with an imprisonment of one year and a fine of INR 15,000.
Experts in the industry are criticizing the law and saying the move by the Karnataka government is highly regressive. The law is a huge setback to Karnataka’s reputation of being a start-up capital.
The Indian online gaming market is the fourth largest in the world. The recent move by the Karnataka government is likely to cause a setback in the Indian online gaming industry worth $1 billion.
Gaming Companies Seeking Clarification Over New Law
Karnataka is a hub of skill-gaming startups, and banning these games in the state has caused tension among the companies. Now, the Karnataka Police Act has imposed a ban on games that involve risking money that may also include skill-based online games.
Following the bill, gaming companies like Dream11 and Mobile Premier League (MPL) have blocked access to players in Karnataka. Players opening the MPL app are reading the messages that the law in their state does not permit them to play Fantasy sports, or the cash games are locked.
The chief executive of the All India Gaming Federation. Ronald Landers has said that the industry will challenge the law in the court to seek legal recourse. Gaming companies are claiming that banning these games may lead residents to illegal online gambling platforms.
The gaming companies are worried as the law might end up shifting their base from Karnataka to somewhere else. As per the Startup Business Academy, Karnataka has over 90 gaming companies that employ thousands of people. According to the experts in the industry, it is unfair to ban the online gaming industry that has created many unicorns and has the potential to become a significant contributor to the economy.
