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No difference in game of skill and chance when money is involved, Karnataka govt tells HC

The Karnataka High Court is hearing a batch of petitions that challenge the state’s gambling ban on constitutional grounds.

Karnataka government argued that its new law on online gaming does not ban online “games of chance or skill” but steers people away from gambling money on an uncertain event, as per an Economic Times report. The arguments were part of the government’s objections to a batch of writ petitions filed in the Karnataka High Court against the ban on online gaming, the report added.

There is no difference between a game of chance or skill as consequences of betting money are the same in both which is why the government does not see a need to treat them differently, ET reported. The hearing began on Wednesday and arguments are set to continue on Thursday.

Karnataka’s law is not bogged down by the “crassness of clauses that afflicted ” the Tamil Nadu law struck down by the Madras High Court recently, the government affirmed.

In the absence of a uniform policy on online gaming by the Union government, the verdicts flowing down from India’s judiciary become vital in understanding the future of gaming in India. Courts might also be instrumental in distinguishing between games of chance and skill.

What were some of the other arguments?

The state of Karnataka put forth the following reasons to justify its case as per ET’s report:

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  • Gaming platforms fuel addiction among the youth which can result in suicide at times.
  • The aforementioned addiction is similar to alcohol or drug abuse
  • Online portals do not disclose the way they distribute prize money to their customers causing them to spend money to attract returns that are not there.

Summary of the case before the HC

The Karnataka High Court is hearing a batch of petitions filed by the All India Gaming Federation and individual companies challenging the new Karnataka law banning online betting games, according to The News Minute. Some of the companies include Galactus Funware, Play Games 24×7, Head Digital Works, Gamekraft, and Junglee Games. 

The petitioners pray for the law to be declared unconstitutional on the grounds that it violates the fundamental right enshrined under Article 19 of the Constitution, The Hindu reported.

They argue that the State cannot prohibit such activities as it is settled law that games of skill (involving risking of money or otherwise) do not amount to wagering or betting as interpreted by the apex court, and the federation contended that the amendments made to the Police Act “unlawfully prohibit the lawful and legitimate business of the members of the federation in providing games of skill.”

Justice Krishna S Dixit is hearing these writ petitions with senior advocates Abhishek Singhvi and Aravind Datar representing the petitioners and Advocate General Prabhulinga Navadgi appearing for the state, The Hindu wrote in its report. 

What does Karnataka’s gaming law dictate?

The amendment to the Karnataka Police Act, 1963, outlaws betting and gambling even when games of skill are concerned.

  • Inclusion of online gaming: The Police Act amendment expands the definition of “gaming” to include online games and games that use “electronic means and virtual currency, electronic transfer of funds in connection with any game of chance. Instruments of gaming also include digital devices, software, and even cyber cafes.
  • Games of skill banned: The amended act bans “any act or risking money, or otherwise on the unknown result of an event including on a game of skill” 
  • Fines increased: The amendment increases the fines and prison time to people caught under gambling prohibitions. A maximum term of one year has been made three years, and a Rs 1,000 fine has been increased to Rs 1,00,000. Minimums for these penalties have also been changed from one month to six months and from Rs 500 to Rs 10,000.

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