November 18, 2021
The Karnataka Legislative Assembly has passed the Karnataka Police (Amendment) Bill, 2021, to ban online gambling and betting involving all forms of wagering, including in the form of tokens valued in terms of money paid before or after their issue.
The act seeks to ban all gambling using electronic means and virtual currency, and electronic transfer of funds in connection with any game of chance.
The act seeks to amend the Karnataka Police Act, 1963, to make online gambling punishable with imprisonment of three years and a penalty of up to INR100,000 (USD1,330).
The law will be a setback for India’s fledgling online gaming industry, which had received a shot in the arm from several high court judgments and a recent Supreme Court judgment that all drew a distinction between games of skill and games of chance.
In the most recent judgment, the Supreme Court upheld Dream11’s fantasy sports format as a “game of skill”. The Supreme Court dismissed a special leave petition that alleged that the online format offered by Dream11 amounted to gambling, wagering and betting, and was not a game of skill.