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Online gambling ban bill tabled in Karnataka, govt says want to ‘wean’ citizens from ‘vice’

Bill seeks to ban all forms of online games. Likely to affect popular online games from Mobile Premier League, RummyCircle, and Junglee Games among others.

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Bengaluru: The Karnataka government has tabled a bill in the legislative assembly to ban online gambling of all forms. The Karnataka Police (Amendment) Bill, 2021, tabled Friday, seeks to prohibit all wagering, betting, gambling of all nature and forms — except lottery and horse race — in the state.

With this bill, Karnataka looks to join the ranks of Tamil Nadu, Andhra Pradesh and Kerala, which have all attempted to curb online gambling via legislation. The Karnataka government’s bill too seeks to ban all forms of online games that involve profits, betting, wagering or exchange of currency in any form.

“Our intention is to ban all games that involve profiting, betting and stakes. We have taken lessons from the Madras High Court’s decision to strike down similar legislation in Tamil Nadu and have changed our bill accordingly,” Home Minister Araga Jnanendra told ThePrint Saturday. “The state has data on how many people have been affected by online betting and gambling during the pandemic and this bill hopes to put an end to it.”

With amendments to nine sections and multiple subsections to the Karnataka Police Act, 1963, the new bill seeks to prohibit online games that involve betting and wagering on mobile apps, mobile phones, computers and all other platforms.

While the bill does not name any games or gaming companies that will be affected, it is likely to affect popular online games from platforms such as Mobile Premier League, Rummycircle, and Junglee Games among others that involve wagering and betting or stakes.

Essentially, if the bill is passed by both Houses of Karnataka’s legislature all online games including Chess, Poker, Rummy, Bridge or any arcade games that involve money in some form will be prohibited.

The bill looks to make all aspects of gambling — with the exception of lottery and horse race — non-bailable and cognisable offence.

“To enhance the punishment for gaming for the orderly conduct of citizens and to wean them away from the vice of gambling,” is listed as one of the reasons to introduce this bill.

The Karnataka cabinet had earlier in September approved the proposed amendments to The Karnataka Police Act. The intent, the cabinet said, was to stop people from resorting to extreme steps after losing money on online gaming. 

The bill comes in the backdrop of the Madras High Court striking down a similar act passed by the Tamil Nadu assembly. Online gaming giant, Junglee Games, had challenged the Tamil Nadu government’s bill in court.

Also read: Temple demolition in BJP-ruled Karnataka sparks embarrassment, political frenzy, protests

Contentious bill has left industry leaders concerned

According to the gaming industry estimates, Karnataka has 91 gaming companies registered in Bengaluru that employ around 5,000 people. Investments of about Rs 3000 crore over the last three years are at stake, industry insiders have told ThePrint.

The biggest concern for the gaming industry is the bill’s aspect that removes the distinction between a ‘game of chance’, such as fantasy sports team matches, and a ‘game of skill’ like Chess.

While industry leaders agree that there is a need to regularise online gaming, there is concern over whether the state is distinguishing between the different categories of online games and their revenue models versus betting and wagering.

“There is clearly a need to bring more clarity in the bill. Karnataka is one of the major hubs for Indian startups and many in the online gaming space that includes online fantasy sports, online skill-based casual games and sports may involve small money but clearly do not tantamount to gambling and betting,” Rameesh Kailasam, Chief Executive Officer, IndiaTech.Org, told ThePrint.

He added that the government’s intent seems to be clearly to ban online gambling and betting that involve chance and hopes that necessary amendment and clarity is brought to the bill to exempt all online games that are skill predominant and those that do not construe gambling or betting.

Home Minister Araga Jnanendra, however, told The Print that the bill would only extend to all forms of games that involve wagering when asked if subscription fees will also be deemed as “for profit”. “More clarity will be given when we frame rules for the bill once it is passed,” Jnanendra said.

“The move by the Karnataka government in tabling the Karnataka Police (Amendment) Compliance Act, 2021, can be seen as a setback to the state’s reputation of being a tech-hub and start-up capital. Skill-based gaming cannot be compared with gambling, and banning is not a solution,” Roland Landers, CEO, All India Gaming Federation, said in a statement shared with ThePrint. Landers also added that the online gaming market in India is expected to generate revenues in the excess of $ 3 billion by 2025.

For the industry insiders, the concern is also whether the legislation will impact participation in eSports at the upcoming Asian games 2022. “Considering the Asian Games 2022 where eSports are being held, I hope the government brings in legislation that encourages participation. Especially since Bengaluru is an investment hub for sports tech in India. I hope the bill can differentiate between a game of skill and game of chance,” Shivani Jha, director of the eSports players welfare association, told ThePrint.

Components of the bill tabled in the assembly

The use of cyberspace, including computer resources or any communication device as defined in IT Act 2000 in the process of gaming will be prohibited, according to the bill, to curb “the menace of gaming through internet, mobile apps”.

The bill states that online games involving betting or wagering in all forms will be banned. The prohibition will extend to money, tokens in lieu of money paid in advance or later, whether by electronic means, virtual currency, electronic transfer of funds for betting or wagering.

All acts of risking money or otherwise on the unknown result of an event will be prohibited. This will also include wagering or betting directly or indirectly by the players playing any game or by any third parties.

The amendment bill has also redefined instruments of gaming to include computers, mobile apps, computer systems, internet, cyber space, virtual platform, computer network, computer resource, any communication device, electronic applications, software and accessories or means of online gaming, any document, register or record or evidence of any gaming in electronic or digital forms, the proceeds of any online gaming as or any winning or prizes in money or otherwise distributed or intended to be distributed in respect of any gaming

Games with stakes will be prohibited at individual homes as well as cybercafes, in virtual game rooms or on mobile apps and all devices covered under Information Technology Act, 2000.

Prison time for offences under the act has also been revised from one year to three years under various sub-sections. Opening gambling dens, online gambling rooms and keeping common gaming rooms and participating will attract three years of prison time and a fine of Rs 1 lakh.

The principle act’s section that allows wagering in games of skills has been omitted in the new bill. The bill is expected to come up for discussion next week in the legislative assembly.

(Edited by Arun Prashanth)

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