For industries such as “online gaming” and “cryptocurrency”, the word that best describes the current regulatory situation is “ambiguity.” Both industries are booming in India, but the government has its concerns about user safety. Recently, this dilemma has reappeared when Karnataka has notified a law prohibiting online gambling and gambling.
The law provides for a maximum sentence of three years’ imprisonment, or a fine of up to 100,000 rupees. This is the confusing part… Karnataka law stipulates that “games of chance” such as online casinos and betting sites should be prohibited. But in addition, it also stated that “games of skill” where players risk losing money should also be banned. Now, some Indian courts have previously called games such as poker, rummy paper and fantasy sports “games of skill” and considered them legal. The Supreme Court also supported Dream11’s online fantasy sports as a “game of skill.”
The ban has come into effect, and top gaming companies, such as Mobile Premier League, have begun to notify users in Karnataka that the laws of their state do not allow cash games. Nazara’s fantasy sports apps Halaplay, Paytm First Games, and online Rummy paper portals Ace2Three and RummyCulture have also stopped offering cash games to users in Karnataka. Dream11 did not suspend its cash game with everyone else, resulting in an FIR against the company. Dream11 claimed that the complaint was “motivated,” but it has now suspended its services in Karnataka.
A source close to the gaming company affected by the ban stated that the company is preventing Karnataka users from accessing their IP addresses and KYC information. The source added that the gaming company also has a VPN blocker to ensure that Karnataka users will not bypass the ban. Bangalore, the capital of Karnataka, has a complete online gaming ecosystem, and it is also the entrepreneurial center of India. According to media reports, the state has at least 91 Indian game companies and developers with approximately 4,000 employees. The industry supports the auxiliary AVGC ecosystem.
AVGC stands for animation, visual effects, games and comics. By 2024-25, the scale of online games in India is estimated to more than double to 29,000 crore rupees. According to a KPMG report, during this period, the number of gamers will grow to 659 million. The Federation of Indian Fantasy Sports (FIFS), led by Dream11, stated that the law appeared to be “misguided” because it punishes legitimate businesses by treating them as illegal online gambling, gambling, and betting platforms.
News Source : Business Standard
