Government officials in the state of Karnataka have a word of warning for online gambling operators: no one is spared.
No discrimination when it comes to law breakers, minister says
In an interview with Economic Times, Home Minister Araga Jnanendra confirmed that the “law applies to all,” meaning that all players and operators of real money games India fall under the ambit of the state law regardless of whether they’re from India or from a foreign country.
“The law applies to all. We will not discriminate whether the law breaker is an Indian or a foreign gaming company,” the home minister told the news outlet.
The Karnataka Police (Amendment) Act 2021 took effect on October 5, effectively banning all forms of online games with real money gaming involved, including online chess, fantasy sports, as well as poker and bridge. Under the amendment act, even operators of real money online gaming platforms run the risk of receiving the punishment of up to three years in jail along with a penalty of up to Rs 1 lakh.
According to the state government, the goal is to wean away people of Karnataka from the vice of gambling. The ban, however, succeeded only in sowing even greater confusion particularly among operators who have already sought the help of high courts to provide a clear guidance on what really is and isn’t allowed to operate in the state.
For its part, All India Gaming Federation (AIGF) already had its members geo-block Karnataka in compliance with the law, but as CEO Roland Landers has lamented, will the minister’s words have any impact among foreign operators?
“As an industry, we had pointed out earlier that such operators will not stop their illegal gambling platforms nor stop users from accessing services from the grey market. Tax paying, homegrown online skill gaming companies including many online gaming startups have been most impacted in the end,” Landers said.
Karnataka among top India states with biggest online gambling presence
Although the Karnataka gambling laws prohibit any form of gambling or betting, the state remains to be one of the top 4 states with the biggest online gambling penetration and presence.
According to an ENV Media report on India’s richest cities and large online gambling communities, Maharashtra leads with 17.4 percent in traffic generation, followed by Telangana with 9.9 percent, while Karnataka and West Bengal each has 9.3 percent share when it comes to traffic generation.
This is an important factor as to why the country, not just state governments, need to regulate—not ban—the online gaming industry. The popularity of online gaming in India is growing, and the government needs to harness this growth by developing an updated, uniform regulation that covers all verticals.
“The problem with the [Karnataka] amendment is the fact that it unilaterally declared games of skill as tantamount to gambling if buy-in is involved. This petition will harm the domestic online gaming industry, and we took this action to protect its interests,” AIGF CEO Roland Landers told Inc42.
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