Karnataka High Court Seeks Centre's Reply on Challenge to New Online Gaming Act
The Karnataka High Court has asked the Union government to respond to a petition challenging the new Promotion and Regulation of Online Gaming Act, 2025. Petitioners argue the law was enacted without consultation and threatens the livelihoods of over two lakh employees in the sector. They contend that a blanket ban on skill-based games involving stakes is unconstitutional and violates the fundamental right to trade. The court will hear arguments for an interim stay on the Act's implementation.
Unpacked:
Petitioners argue that the Act's blanket ban on skill-based games involving stakes infringes on the constitutional right to trade and occupation. They also claim the law was enacted without stakeholder consultation, violating principles of due process and potentially overreaching legislative powers.
The Act exempts 'games of skill'—defined as those where outcomes depend on players' expertise, knowledge, or training—from the ban, while prohibiting 'games of chance,' where outcomes are primarily determined by luck or randomness. A state authority is empowered to decide which games qualify as skill-based.
If implemented, the Act could significantly restrict or shut down platforms offering games classified as chance-based, threatening the livelihoods of over 200,000 employees in the sector. Only licensed platforms offering skill-based games may continue operations, subject to strict regulations and compliance.
Tamil Nadu and Nagaland have enacted similar laws: Tamil Nadu's strict regulations are facing judicial scrutiny for potential overreach, while Nagaland's model allows licensed skill-based games but bans chance-based formats. Outcomes vary, with courts sometimes striking down blanket bans as unconstitutional.