Karnataka High Court Quashes FIR Against Dream11 Co-Founders, Says State's Ban On Online Gaming With Stakes Struck Off

"Amendment to the Karnataka Police Act was the subject matter in several writ petitions – in W.P.No.18703/2021 and connected cases, the Division Bench of this Court, by its order dated 14.2.2022 has struck down Sections 2, 3, 6, 8 and 9 of the Karnataka Police (Amendment) Act, 2021 in its entirety, as ultra vires the Constitution of India. In the light of striking down of the aforesaid amendment, the petition deserves to succeed."

The Annapoorneshwari Nagar police station had registered the FIR under sections 79 and 80 of the Amendment Act based on a complaint made by one Manjunath, a resident of Nagarbhavi in Bengaluru filed on October 7.

Karnataka High Court Strikes Down Law Banning Online Gaming With Stakes

The petition stated that the case registered by the respondent police suffers from want of sanction of law and as such deserves to be quashed in limine. Senior Advocate C V Nagesh appearing for the petitioners had argued that, "The complaint makes out no offence against the accused. Rather the complainant has been chosen to make mere bald, omnibus and vague allegations to the effect that the petitioners being founder and directors of the company which has developed the Dream 11 platform."

The plea also stated that the activity of fantasy sports has been held as a game of skill and certainly not one in the nature of gambling, betting or wagering by various high courts.

The complainant had said the Karnataka government made amendments to the Karnataka Police Act, 1963, prohibiting the online games of chance and skill where money is risked. He had searched the Google Play Store to know how many online games are withdrawn. Many companies have blocked their mobile applications except 'Dream 11'. Despite this, the complaint said, they have continued betting on online games by promoting their online mobile gaming application called 'Dream 11'. The people are still putting and risking their money by creating their own fantasy cricket team and losing huge amounts of money giving a chance to the accused to earn unlawfully, the complaint added.

On February 14, the High Court had held certain provisions of the Karnataka Police (Amendment) Act 2021, by which the state government has banned online games with stakes to be ultra vires to the Constitution and struck them down. The Amendment Act provided maximum imprisonment of three years and penalty up to Rs. 1 lakh for violation of the provisions.

The Amendment Act had come into force on October 5, 2021 it included all forms of wagering or betting, including in the form of tokens valued in terms of money paid before or after the issue of it. It has banned electronic means and virtual currency, electronic transfer of funds in connection with any game of 'chance'. However, there is no ban on lottery, or betting on horse races on any racecourse within or outside Karnataka.

Case Title: Bhavith Sheth V. State Of Karnataka

Case No: Wp 19287/2021

Citation: 2022 Livelaw (Kar) 81

Date Of Order: March 4, 2022

Appearance: Senior Advocate C.V.Nagesh A/W Advocate Ajay Kadkol D For Petitioner

Advocate Shankar H.S For Respondent