The Karnataka High Court on Monday struck down provisions of the Karnataka Police (Amendment) Act, 2021, which prohibit and criminalise betting on and playing games of skill, including online games in the case All India Gaming Federation v. State of Karnataka.
A Division Bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S Dixit pronounced the judgment.
"The writ petitions succeed. The provisions are ultra vires of the Constitution and struck down," the Court said.
The Court said that the entire Act is not struck down but only the offending provisions.
However, the Bench made it clear that the judgment will not stand in the way of legislature bringing in new law in consonance with the Constitution against gambling.
The Amendment Act enacted on October 5, 2021 bans wagering or betting, including in the form of tokens valued in terms of money paid before or after the issue of the same. It also ban virtual currency and electronic transfer of funds in connection with any game of chance.
The maximum punishment for violations under the Amendment Act is imprisonment for three years and a penalty up to 1 lakh.
The petitions challenging the Act claimed that games of skill, irrespective of whether they involve the risk of losing money, do not amount to wagering or betting and thus, cannot be prohibited.
It was argued that the State lacked legislative authority to pass the Act, which was contrary to precedent laid down by the apex court and was violative of Articles 14, 19(1)(g), 21 and 301 of the Constitution.
Constitutional Courts have repeatedly held that games of skill (involving risking of money or otherwise) do not amount to wagering or betting, and therefore are protected under Article 19 of the Constitution, one of the pleas stated.
On the other hand, the State government through Advocate General Prabhuling K Navadgi contended that the petitioner had no cause of action had arisen as no steps were taken against the petitioners. In absence of any proceedings against them, such a petition could not lie.
Navadgi also argued that such game did not require great skill and was in fact, predominantly a game of chance.
You are placing money over performance of players over which you have no role or control whatsoever. Once you establish this, how is it a game of skill? he had asked during the hearing.
Senior Advocate Sajan Poovayya appeared for Play Games 247, Head Digital and Junglee Games.
Keystone Partners Managing Partner Pradeep Nayak represented the lead petitioner, All India Gaming Federation.
