Karnataka proposes banning online games involving betting and gambling

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The state government of South India – Karnataka, home to India’s Silicon Valley aka Banglore, has proposed a law banning online gambling and gambling activities involving elements of betting and gambling in the aim of curbing the growing addiction to gambling among the young rural population. .

According to the invoice seen by Reuters.

The bill was proposed for the sole purpose of “protecting” rural youth from becoming “regular gamblers”. According to government officials, the state’s rural youth population is being left idle due to the coronavirus pandemic-induced lockdowns and staying at home most of the time. Although the bill seems surprising at first glance, Karnataka is not the only Indian state to ban online gambling involving cash prizes and gambling elements. It is the 4th state after Telangana, the Tamil Nadu and Andhra Pradesh to introduce such a bill.

It is important to note that the bill will directly affect India’s leading fantasy gaming platforms – Dream11 and Mobile Premier League (MPL), which offer fantasy cricket and football games with the prospect of money. to win. Some industry sources spoke to Reuters and said:

The business of MPL, Dream11 and everyone in the industry will suffer. These states are important – they represent around 20% of the (total) activity of these companies.

Due to the covid-induced lockdowns across the country, the online gambling industry in India has grown tremendously to the point where foreign investors are showing great interest in gambling startups and investment funds. According to a All India Gaming Federation reportIndia currently has over 400 online gaming startups and will have 550 million online gamers by 2022, a staggering growth from the 360 ​​million online gamers in 2020. The gaming industry is expected to be worth more than $2 billion by 2023, making it the fourth-largest gaming market after China, the United States, and the European Union (EU).

While the Dream11 and MPL platforms have grown significantly over the past few years, legislation like this will directly harm their business model and make it incredibly difficult for them to make a profit. Dream11 is also seeking a US listing early next year, which will become more difficult after losing 20% ​​of its total business due to said gambling bills.

Sandeep Chilana, a New Delhi-based lawyer, spoke to Reuters and said these laws have little legal standing given the Supreme Court has repeatedly said that skill-based games – like fantasy cricket – are not like gambling which remains largely banned across India.

“Indian states are going too far and will face legal challenges by banning such games of skill,” Chilana said.

The potential ban on one of India’s biggest esports tournament sponsors will also hurt professional gamers, said the Esports Players Welfare Association, a non-profit for online gamers.

“Gaming and esports are areas where skills can be developed following which it is not a sin activity,“, said the group.

Companies affected by these bills will likely form a class and go to the Supreme Court of India in the hope that the court will strike down these laws and legally protect companies from such bills in the future.

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