Karnataka to Curb Online Gambling with New Law
The government of Karnataka has announced plans to regulate online betting and gambling with a new legislation.
LISTEN TO THIS ARTICLE:The fresh initiative will focus on banning games of chance while allowing skill-based gaming under strict oversight. It seeks to replicate Chhattisgarh's approach to regulating online gaming, which prioritizes both consumer safety and industry growth.
IT minister (Priyank Kharge) and I had a meeting on regulating online betting and gambling yesterday (Tuesday). Representatives from the industry were present. They have agreed to the introduction of a license system and a regulation as per law.
According to Priyank Kharge, the proposed legislation will curb online gambling, betting, and games of chance while safeguarding users from fraud and promoting sustainable growth in the skill-based gaming sector.
Kharge noted that India's online skill-based gaming market is valued at $4 billion and contributes Rs 12,000 crore in taxes, with over 1.5 lakh jobs. Of this total, Karnataka accounts for 25% of the market share and generates Rs 1,350 crore annually in taxes.
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Market Concerns and Code of Ethics
However, the IT minister expressed concerns about the rise of illegal gambling platforms in the jurisdiction. He said: "Alongside the legitimate sector, there is a parallel underground market that is expanding rapidly, posing risks such as predatory money collection practices, dubious shell companies, financial fraud, data breaches, and cybercrimes."
As part of the process for the new bill, Kharge stated that he has met industry associations, including the All India Gaming Federation and the Federation of Indian Fantasy Sports, which have jointly introduced a "Code of Ethics" for their member platforms.
The new code will prioritize user safety and responsible gaming practices, aiming to protect the interests of over 500 million Indian gamers.
A committee comprising senior officials and industry representatives has been formed to draft the new bill. They have been given a month to submit their draft proposal.
Karnataka’s First Try
This latest development marks the second time the southwest Indian state has attempted to restrict online casino games in its jurisdiction. The first move was in 2021 when the previous BJP government amended the Karnataka Police Act 2021 to prohibit all games, including online skill games, played for stakes.
The law forced online skill gaming platforms offering games like rummy, poker, and fantasy sports to suspend real-money contests in the state. The amendment was resisted and challenged in court by industry associations. In February 2022, the Karnataka High Court quashed the legislation, declaring it unconstitutional.
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