“We had changed the law with great ambition because reports showed that the use of money for betting in online games had ruined a large number of young people and their families. We decided to impose restrictions to eliminate the use of cash and have responded with legislation,” Karnataka Home Minister Araga Jnanendra told ET.
“But the court invalidated the amendments. We still think our answer was right, as many families said the threat of online betting had destroyed them financially. This is why we have decided to move the Supreme Court”, added the Minister of the Interior.
In a judgment on February 14, a divisional bench consisting of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit ruled that sections of the amendments were ultra vires the Constitution. The court, however, said it did not strike down the entire law, but only certain contentious provisions.
The ruling followed written petitions from several gaming companies and the All India Gaming Federation (AIGF) challenging the law, which they said allowed games of skill but prohibited the use of money in any form of games.
In its Special Permit Application (SLP) to the Supreme Court, the Karnataka government said the state requires the law to protect people from online gambling and loss of money. Explaining the sequence of events, the State said it was during the hearing of a PIL seeking a ban on online gambling last year that the High Court asked the government to clarify its position on the online games. The government in July informed the court that it had decided to amend the Police Act to provide for a ban on online gambling involving money.
In its February judgment, the High Court also barred the state from interfering with the online gambling industry and the related activities of gambling companies. The petitioners had argued that Karnataka law also restricted online games of skill, which had been authorized by the Supreme Court.
The court, however, left it to the legislator to consider a new law on betting and gambling in accordance with the Constitution.
The Karnataka government notified the law banning betting and betting in online games on October 5 after the legislature passed the bill in September last year. The Karnataka Legislature passed amendments to the Karnataka Police Act 1963 during its recent session. The state has always asserted that its amendments do not prohibit “gambling” or “games of skill” online, but only prevent people from risking money “in the event of an uncertain event” and that “online platforms are prohibited from enticing a gullible public with the lure of unattainable prizes”.
Tamil Nadu had last year enacted an ordinance amending its Gambling and Police Laws Act 2021, which banned online gambling. The Madras High Court, however, struck down the amendments deeming the law unconstitutional. Kerala had also banned online rummy games last year under the Kerala Gaming Act. It was also set aside.