Online gaming: Karnataka high court to hear case today for disposal. All you need to know

Earlier this month, Rajya Sabha member and senior Bharatiya Janata Party leader Sushil Kumar Modi demanded on the floor of the House that the government should regulate the online gaming industry and impose a uniform tax on it.
According to the All-India Gaming Federation Report, the online gaming sector touched $1 billion in 2020.(Representative Photo)
According to the All-India Gaming Federation Report, the online gaming sector touched $1 billion in 2020.(Representative Photo)
Published on Dec 22, 2021 05:20 AM IST
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By | Written by Amit Chaturvedi, Hindustan Times, New Delhi

The Karnataka high court on Wednesday is expected to dispose of the petitions filed against the state’s new law, which seeks to regulate all formats of online gaming. Six companies and industry bodies have moved the high court against the Karnataka Police (Amendment) Compliance Act, 2021, which makes all forms of gambling, including online, a cognisable and non-bailable offence

The petitioners are: All Indian Gaming Federation (AIGF), Mobile Premier League, Games24x7, Gameskraft, Head Digital Works Private Ltd, and Junglee Games.

The case will be heard by a bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit.

What is the issue?

A number of companies, which hold online fantasy sports and rummy, argue that the games which require skills have been clubbed along with games of chance in the definition of gaming.

Their arguments have been successfully accepted by the high courts in Tamil Nadu and Kerala, where the companies cited a law laid down by the Supreme Court in 1957 that competitive games of skill are business activities protected under the sub-sections of Article 19 of the Constitution.

When was the law passed by Karnataka?

The Karnataka Police (Amendment) Compliance Act, 2021, was passed by the state legislature in September this year and notified on October 5.

Which other states have banned online gaming?

Telangana, Andhra Pradesh, Assam, Odisha, Nagaland and Sikkim have banned online rummy. However, the Madras high court, in August this year, quashed the state government’s ban on online rummy, holding that it requires skills and cannot be considered as gambling.

The Kerala high court too, in September, struck down an amendment which imposed a ban on online rummy.

How big is the online gaming industry?

According to the All-India Gaming Federation Report, the sector touched $1 billion in 2020. The report was prepared along with Ernst and Young.

It is expected to reach $2 billion by 2023, the report further said.

Concerns around online gaming

Earlier this month, Rajya Sabha member and senior Bharatiya Janata Party (BJP) leader Sushil Kumar Modi demanded on the floor of the House that the government should regulate the online gaming industry and impose a uniform tax on it.

Raising the issue during the Zero Hour, Modi said that these online games have now given way to gambling and betting.

During the pre-Covid period, the BJP leader said, the weekly time spent on mobile gaming was 2.5 hours, while 11 per cent of total smartphone time was spent on gaming. However, during lockdown, the gaming time has increased to four hours.

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