In two recent letters addressed to the Ministry of Electronics and IT (MeiTY), IndiaTech has expressed concerns and asked for clarification over the bill to ban online gambling by the Karnataka government.
The association has recommended that instead of an outright ban on online gambling, the government should come up with a framework to guide responsible online gambling. The letters suggest that the code for gaming online should include policies that will govern genre or age-based classifications. It also recommended that AI-based technology should be used to monitor and control possible problem gambling and addictions. There should also be limits for winnings and money spent on games.
The association in its letter noted that banning online gambling is not the solution. Rather, the government and the industry needs to engage better with stakeholders and mental health professionals to develop a “CROG (Code for Responsible Online Gaming)”.
According to onlinecasinoguide.in, it’s legal to play online casino games based on skill. The federal law permits games of skills. However, Karnataka’s legislative assembly recently passed a bill for the amendment of the Karnataka Police Act, after considering it since September 17 when it was first tabled. This bill seeks to prohibit all types of online gaming that involves the transfer of money. It proposes a jail term of up to 3 years and a Rs 1 lakh penalty for offenders.
The bill comes after recent public interest litigation filed in the High Court to ban online gambling. However, the bill erroneously removes the distinction between chance games and skill-based games. Hence, IndiaTech is seeking a review of the bill.
What this bill does is put at risk startups that deal with skilled-based casino games. In the long run, it could eventually discourage others from venturing into other profitable areas.
Nevertheless, according to Basavaraj Bommai, Karnataka Chief Minister, the law doesn’t ban games of skills. “The proposed law does not prohibit online games that strictly comply with games of skill features. The government, however, will deal with operators and abettors who run games of chance camouflaged as games of skill. Skill games that involve risks of the player losing money would also invite action,” he said.
IndiaTech, however, argues that the law needs clarification to properly differentiate games of skill from chance games. It also argues that “The mere involvement of money does not make any game into an addictive or gambling genre”.
Other states that have prohibited online gambling include Tamil Nadu and Telangana. However, In August 2021, the High Court struck down the ordinance banning online gambling. The Madras High Court described the amendments as pernicious, arbitrary, and overbearing, and is believed to be working on providing a framework that will benefit stakeholders and the government. Jayesh Ranjan, the Telangana Principal Secretary for IT, electronics, and communications also recently stated that blanket banning of online gaming is not a solution, rather, there’s a need to have a distinction between skill games and chance games.
CEO of All India Gaming Federation, Roland Landers said, “The sector has been a strong financial contributor to the Indian economy even during an unprecedented period of slowdown and is further expected to generate revenues over $3 billion by 2025. The move by the Karnataka government is a setback to the state’s reputation of being a tech-hub and startup capital”.
IndiaTech is an industry association that represents India’s technology startups, investors, and unicorns. It aims to expand India's tech ecosystem, improve innovation, and make it globally competitive.