The Karnataka Police (Amendment) Act, 2021, was passed by the state legislative assembly on Tuesday, banning all forms of wagering or betting in connection with any game of chance except horse racing and lottery. The amendment also prohibits risking money on the unknown result of an event including on a game of skill.
The bill, however, lacks clarity and the move would affect an industry that is estimated to generate revenues in excess of $3 billion by 2025, said Rolan Landers, CEO, All India Gaming Federation (AIGF), in a statement.
“India is the fifth-largest online gaming market globally and skill-based gaming, a sunrise sector, is giving birth to an increasing number of unicorns within the country, especially Karnataka. The sector has been a strong financial contributor to the Indian economy even during an unprecedented period of slowdown. The move by the Karnataka government in tabling the Karnataka Police (Amendment) Compliance Act, 2021 act is highly regressive in nature, and a huge setback to the state’s reputation of being a tech-hub and start-up capital,” said Landers.
Skill-based gaming cannot be compared with gambling, and banning is not a solution; the sector needs the support of state governments to promote initiatives towards responsible gaming, he added.
“Considering the support the online skill-based gaming sector has received in past rulings by both the Supreme Court, under article 19(1)(g) of the Indian Constitution, and various Karnataka High Court judgements, the move by the Karnataka government in tabling the Karnataka Police (Amendment) Compliance Act, 2021 comes as a real setback to the large professional players community that resides in the state. These players, who represent India in domestic and international level tournaments such as the 2018 Asian Games and World Series of Poker look to this globally accepted sector as a means to their livelihood, which has already witnessed a severe impact due to the Covid-19 pandemic,” said PK Misra, president, Players Association, AIGF.
The AIGF and its advisory members plan to engage stakeholders within the state government to make an industry representation on the matter and expect a clear distinction between gambling and skill-based gaming.
The bill has been sent to the upper house for it to be passed. While JC Madhu Swamy, minister for law and parliamentary affairs, stated that the details will be worked out when the law is out, Congress legislators raised objections to the contents of the bill.
In a series of tweets, Congress MLA Priyank Kharge said that the government needs to be more specific and identify games that encourage betting instead of a blanket ban for all online games.
“The Karnataka Police (Amendment) Bill, 2021 has not been thought out by the Govt. If it intends to ban gambling/betting it should distinguish between a game of skill and a game of chance, which is not reflected in the bill. K’taka is the gaming hub with investments of 4000 Cr employing 1000s. The Govt should have formed a committee with the stakeholders before drafting this bill to iron out issues that might affect the entire gaming industry,” he tweeted.
Kharge said that the “State hasn’t bothered looking at the most recent judgement of Junglee Games v/s State of TN which struck down TN Govt’s Police and Gaming Amendment which is on the same line. People pay registration fees to play or participate in online chess or sudoku. Is this also called wagering? There is no clarity in the bill. See Sec 78 sub clauses 1 (a) (vi) (vii) which includes ‘game of skills’.” He suggested that the government form a committee with industry stakeholders and come out with a law that curbs online betting instead of a “bill that won’t stand the test of law”.
The lack of clarity line is echoed by people across the industry.
“The bill as it is currently drafted includes risking money for a game of chance or skill in the ambit of wagering and registration fee payable at times for certain games must not be construed as a risk. At the same time there are comments from [legislative] assembly members that their intent is not to ban skill games, the wording of the bill has led to this lack of clarity,” said Shivani Jha, tech policy researcher and director, eSports Players Welfare Association. “This will heavily impact the sports tech industry which includes gamers, developers and publishers. India has around 600 gaming start-ups per annum and the industry India is worth Rs 10,000 crore as per government data.”
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