BREAKING : Karnataka High Court Strikes Down Law Banning Online Gaming With Stakes

The Karnataka High Court on Monday 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 Act provides maximum imprisonment of three years and penalty up to Rs. 1 lakh for violation of the provisions.A division bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit said "In the above circumstances these writ petitions succeed. The Karnataka Police (Amendment) Act 2021 to the extent provisions we have said, not the entire act is struck down is declared to be ultra vires to the constitution and struck down." "A writ of mandamus is issued restraining the respondents from interfering with the online gaming business and allied activities of the petitions", the Court added.It added "The consequences of striking down the provisions shall follow. However, nothing in this judgement shall be construed to prevent an appropriate legislation from being brought about, concerning the subject of betting and gambling in accordance with the provisions of the Constitution." Detailed copy of the judgment is yet to be uploaded. Similar laws banning online gaming in Kerala and Tamil Nadu have been struck down by the Kerala and Madras High Courts respectively. The Kerala High Court had struck down a State law banning online rummy. Earlier, the Madras High Court had struck down a law passed by the Tamil Nadu assembly banning all kinds of online games, including skill-based games like poker and rummy, played for stakes.The Karnataka High Court on December 22, 2021 had reserved its order on a batch of petitions challenging the constitutional validity of the Karnataka Police (Amendment) Act 2021, by which the state government has banned online gaming and betting. The Act provides maximum imprisonment of three years and penalty up to Rs. 1 lakh for violation of the provisions. The hearing of the petitions before the division bench began on November 12, 2021. Initially, the matter was being heard for grant of interim relief but on consent of all the counsels, the matter was finally heard by the court. Dr Abhishek Manu Singhvi appearing for one of the petitioners had argued that there is a distinction between Game of chance and game of skill. "Game of chance alone can be regulated to the point of banning by state authorities. Conversely to this, state governments have no jurisdiction to ban games of skill. This distinction has been in existence for years," he said. Reliance was placed on Supreme Court judgements in the case of R. M. D. Chamarbaugwalla vs The Union Of India, Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr and others. Senior Advocate Mukul Rohatgi, appearing for another petitioner, argued that the object of the Amendment Act was to stop game of chance and gambling. However, in that process, treating a game of skill under the same head is arbitrary and the legislature is in overreach of the judgments of the Supreme Court, which have allowed games of skill. He also contended that, "If I take this Amendment Act as it stands today, if I am playing a game of chess online and we say the winner will take away an amount, it will amount to an offence. The Act takes into its compass acts which are not gambling." Senior Advocate C Aryama Sundaram appearing for the All India Gaming Federation contended that, "All my members do not offer third party viewership. These online games are only available to the actual players. He (player) is not wagering on somebody else's skill. I (player) have to personally participate in a game which is a game of skill and then wagering thereon. The question is whether this will amount to gambling and fall under Entry 34 of List 2 of the Constitution." Relying on Supreme Court judgments and that of Madras High Court and Kerala High Court which have struck down similar laws, he argued, "The status quo which has been in force for 40 years and has not been altered in respect to game of skills, especially when the games are regulated by the Federation itself should continue." Further, "Prima facie case of balance of convenience is made out and in the absence of stay, all these people (companies) are going to go out of business. It is not that we are in an irreversible condition, if the court holds that act is valid then let the ban take effect from that day." Senior Advocate DLN Rao appearing for another petitioner also attacked the Amendment Act on the grounds of legislative competence and it being in violation of Article 19(1)(g) of the Constitution. He said, "Prima facie case is made out and the whole amendment is without authority of law." Senior Advocate Sajan Poovayya appearing for three petitioners had submitted that when the legislative competence is challenged, presumption of constitutionality will not come in way. State Government Opposed the petitions: ...

BREAKING : Karnataka High Court Strikes Down Law Banning Online Gaming With Stakes

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