Bengaluru: The Karnataka government is planning a fresh ban on online betting, prohibiting the use of money, tokens, virtual currency or electronic funds, with the Karnataka Police (Amendment) Bill, 2025. However, the bill proposed by the state’s home department has sparked concern as it was drafted without consulting other departments, including information technology, ThePrint has learnt.
“There is yet to be any consultation on this bill with the IT department,” said one person aware of the developments, requesting anonymity.
The new bill proposes to set up a regulatory authority to oversee online gaming companies, while seeking that online gaming companies apply for a licence to operate such entities.
Karnataka IT minister Priyank Kharge told ThePrint that there was a proposal to bring in a bill, but it will be brought forward after consultations with stakeholders as well as the department.
The proposal comes even as the Supreme Court is scheduled to hear arguments on a similar bill tabled by the Basavaraj Bommai-led government in 2021.
In less than two weeks, the Karnataka government has proposed at least three draft bills—for regulation of fake news, hate speech and a ban on online betting—that had to be pulled back as they were prepared in haste, or pushed out even without consultations with its own key departments.
The rush to release a draft bill banning online gambling has added to the uncertainty among the stakeholders of an industry that is projected to reach $26 billion by FY2030.
Gaming industry professionals say that the state government has already banned ‘games of chance’ in Karnataka, and that more regulations are only likely to add to the sector’s challenges.
“Primarily, the thrust of the bill is making sure that illegal gaming and online betting platforms are abolished. But the problem there is that they are anyway offshore. So, how do you sort of regulate this law?” one gaming industry professional said, requesting anonymity.
Karnataka has a healthy 20 percent share in the Animation, Visual Effects, Gaming, Comics, and Extended Reality (AVGC-XR) sector, with a workforce of around 15,000 in this sector, according to the Karnataka AVGC-XR 3.0 Policy 2024-2029.
According to market research and data platform Tracxn, the number of gaming startups in Bengaluru has increased to 278 from about 100 four years ago, when the COVID-19 lockdown gave the industry significant traction.
While states like Andhra Pradesh and Telangana have banned all real-money online gaming, reports indicate that online betting or gambling appears to be thriving unchecked.
India has no unified law that either bans or regulates the online gaming industry, which has led to a higher compliance burden on companies since states make laws around regulations in this sector. Some states have banned online gaming, while several others have regulated it.
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‘Centre should come up with uniform rules’
The state government’s fresh push to introduce the new bill comes days after a 25-year-old man from Davangere allegedly died by suicide on 2 July after being duped by an online racket. But there is little to suggest that the incident expedited the proposal.
In an alleged suicide note found next to him, the victim said that he put in about Rs 18 lakh in an online game, and was duped with the promise of winning a much higher sum. “In his note, he had written that he put money in and lost it all. He had also requested the government to ban online gaming,” police said.
Though the Karnataka High Court struck down several provisions of a 2021 online gaming ban, it retained sections on the restriction of online gambling. In 2021, the Bommai-led government had banned online gambling and gaming, impacting an industry that was thriving in Bengaluru.
The industry said that the blanket ban does not distinguish between ‘game of skill’ and ‘game of chance’.
In the new proposal, game of chance has been defined as any game or activity where the “outcome is predominantly determined by luck, randomness, or uncertainty, and includes online gambling, betting, and wagering activities”.
A game of skill has been defined as any activity where the outcome is predominantly “determined by the skill, knowledge, training, or expertise of the participant, as recognized by judicial precedents”.
“While we applaud the state government’s initiative, we also believe that state-level laws alone may not be sufficient to curb the growing menace of offshore gambling platforms, which operate beyond India’s jurisdiction, offer no consumer recourse and are emerging as one of the biggest national security threat,” Roland Landers, CEO of the All India Gaming Federation, said in a statement.
He added that breaking the online gambling network required a strong national framework that brings together all relevant stakeholders to effectively regulate and monitor the ecosystem.
(Edited by Sugita Katyal)