The regulatory discourse around online gaming and betting in India has often been marked by abrupt bans, legal challenges, and a lack of clarity, leaving both the industry and consumers in a state of uncertainty. Karnataka has been at the centre of this turbulence. However, in a significant development, the state has now announced its intention to draft a comprehensive law to regulate online gaming. This marks a notable shift from past approaches, signalling a more balanced and structured framework.
In 2021, Karnataka passed legislation that effectively prohibited all forms of online gaming involving monetary stakes. The law made no distinction between games of skill and games of chance, triggering widespread concern among gaming companies and legal experts. The state’s gaming ecosystem faced a substantial setback as several operators either exited the market or suspended services.
The Karnataka High Court subsequently struck down the legislation in 2022, stating that it infringed upon constitutional rights and failed to differentiate between skill-based games and gambling. Despite this judicial intervention, the absence of a clear regulatory framework left a vacuum, which has been exploited by illegal offshore betting platforms operating without oversight or consumer safeguards.
In a meeting chaired by the Hon’ble Home Minister Shri G. Parameshwara and the august presence of the Hon’ble IT minister Shri Priyank Kharge and various officers from the state, industry federation, and other stakeholders; this inclusive and holistic approach set the directions for a) progress & b) protection of the industry and citizens respectively.
The Government of Karnataka has announced the formation of a committee comprising senior officials, legal experts, and industry representatives to draft a new law. The forthcoming legislation is expected to -
The initiative represents a pivot from prohibition to regulation, aiming to foster innovation while addressing the risks associated with unregulated platforms.
The proposed law is expected to enhance player safety through regulatory oversight. Consumers would benefit from increased transparency, data privacy protections, and access to redressal mechanisms. More importantly, it would help curb the influence of illegal betting apps that often expose users to fraud, identity theft, and financial exploitation.
A well-defined law could provide the stability and legal certainty that legitimate operators require to scale responsibly. The introduction of a whitelisting process would allow businesses to operate within a recognised legal framework, encouraging investment, innovation, and compliance. It would also help weed out unregulated platforms, promoting fair competition.
Once enacted, it could set a precedent for other Indian states grappling with similar regulatory dilemmas. Karnataka’s approach, has the potential to serve as a model for balancing consumer protection with economic opportunity in the digital entertainment space.
Moreover, by recognising the legitimacy of online skill-based games and implementing a structured oversight mechanism, Karnataka could play a pivotal role in shaping India’s broader national strategy for online gaming regulation.
Karnataka’s decision to draft a new law regulating online gaming represents a progressive shift in public policy. By moving away from blanket bans towards a nuanced and enforceable framework, the state is taking a decisive step towards fostering a safe, responsible, and thriving gaming ecosystem.
As the digital economy continues to evolve, such measures are essential, not only to protect users and ensure fair play but also to support India’s ambition of becoming a global leader in the gaming and technology sectors.
