Karnataka HC extends relief to owners of Dream11 app in ‘violation’ of police act case

The directions come over a month after Manjunath filed a complaint with the Annapoorneshwari Nagar police station on October 7 against the company for the alleged violation of the new act that was notified on October 5 by the state government.

The Karnataka high court on Tuesday extended the stay on any possible coercive action by law enforcement authorities against the founders of online gaming app, Dream 11, in connection with alleged violation of the state’s new online gaming and gambling law. Dream11 founders Bhavit and Harsh Jain had prayed to quash a petition seeking their arrest.

Dream11 founders Bhavit and Harsh Jain had prayed to quash a petition seeking their arrest. (File/Representative use)

Justice Sreenivas Harish Kumar observed that the investigation on the matter should continue, an advocate aware of the developments said on Tuesday. “Dream11 counsel noted that there is a Supreme Court judgment on the issue and amendments to the Karnataka Police Act will not apply to them. The judge said he will apply the SC judgment if it is applicable to them after hearing the matter and arguments,” the advocate cited above said requesting not to be named.

The directions come over a month after Manjunath filed a complaint with the Annapoorneshwari Nagar police station on October 7 against the company for the alleged violation of the new act that was notified on October 5 by the state government.

The Basavaraj Bommai-led Bharatiya Janata Party (BJP)-led state government had tabled and passed the bill despite opposition during the monsoon session of the legislature between September 13-24. Home minister Araga Jnanendra has defended the law despite concerns being raised over the financial impact of the same on the state as well as the dent of Bengaluru’s image as the tech and startup capital of the country.

The Karnataka Police (Amendment) Bill, 2021 which among other changes, has banned “any act or risking money, or otherwise on the unknown result of an event including on a game of skill,” which has added to apprehensions as it proposes to include skill in what was earlier only on a game of chance.

Forums like All India Gaming Federation (AIGF) and others have approached the court for securing a stay on the ban itself.

Another bench of the HC is hearing a bunch of petitions from companies and other stakeholders challenging the constitutional validity of the amendments made to the Karnataka Police (Amendment) Act 2021 that bans online gaming and gambling and imposes heavy fines of upto ₹1 lakh and maximum imprisonment of nearly three years. The counsel on record and the government advocate could not be reached for comment.

Police in Bengaluru and other places continue to crack down on such companies and service providers especially during the just concluded Indian Premier League (IPL) season. The police have booked 20 cases against 27 persons during the 2021 IPL season with most of them with the old laws that bans gambling.

There has been at least one case filed for violation of the new legislation, people aware of the developments said.

The online gaming industry, which gained significant traction during lockdown to battle Covid1-9, is slated to grow from 360 million gamers to 510 million by 2022, according to a 2021 report by AIGF and EY.

The report adds that 85% of these are mobile gamers. It also estimates that online real money game players are expected to grow from 80 million in 2020 to 150 million by 2023.

Estimates indicate that Karnataka, known for its prowess in technology, accounts for around 15% of the country’s market. According to the Internet and Mobile Association of India (IMAI) there are 92 gaming companies registered in Bengaluru which employ over 4,000 people and have, in the last three years alone, attracted ₹3000 crores in investments.