Skill gaming a constitutional right: Dream11 founders find partial relief in Karnataka

It’s a relief, or an extended version of it, for founders of the popular fantasy sports platform Dream11 after the Karnataka High Court instructed Bengaluru police to stop taking any coercive action against the company until the court has given out further orders.

Dream11 suspends operations in Karnataka In compliance with Karnataka’s new online gambling law, Dream11 suspended its operations in the Indian state on October 10. They follow the move of other real-money gaming firms Adda52, Mobile Premier League (MPL), Games24x7 (RummyCircle, My11Circle), Junglee Games (Junglee Rummy, Junglee Teen Patti, Howzat), and A23 (Ace2Three), which had earlier stopped offering its skill games products in Karnataka.

The Annapoorneshwari Nagar Police, however, filed a first information report (FIR) against Dream11 following a complaint from a state resident that the game operator was violating the new online gambling law. It prompted founders Harsh Jain and Bhavit Sheth to seek relief with the high court in fear that the police could arrest them any time.

The Karnataka Police (Amendment) Act 2021 took effect on October 5, covering online games with real money gaming components including online chess, fantasy sports, and even poker and bridge. This means that even real money online casino like 10Cric Casino are at risk of drawing the ire of law enforcement authorities and potentially face up to three years in jail as well as a penalty of up to Rs 1 lakh.

The state law stated, “Gaming means and includes online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of money paid before or after issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance.” Interestingly, the Karnataka law excluded lottery and betting on horse races.

With the Karnataka Police (Amendment) Act, 2021, officials seek to wean the state residents from the “vice of gambling”—but instead of regulating the industry, the state is pushing for the statewide ban that will effectively shut down all online real money games operations in their jurisdiction.

Karnataka, however, faces a similar future as the states that have moved to ban online gaming in the past. For instance, the Madras High Court has ordered Tamil Nadu to stand down and stop the online gaming ban because it goes against Article 19(1)(g) of the Constitution, which confers the right to practice any lawful profession, occupation, trade or business to all citizens.

Since the Supreme Court has already deemed it a constitutional right, it’s better for all states to regulate the skill gaming sector rather than outrightly banning it. And it may be a good idea for officials in India to review how mature markets around the world are regulating the online gambling industry, and in the process, harnessing the economic boost it brings to the country. India’s online gaming market has been thriving even during pandemic, as highlighted by a new ENV Media report licenses and regulated markets. But the country needs to discard its archaic laws in favor of a uniformed regulatory framework that allows the market to keep up with the rapidly changing technologies and give authorities better flexibility for potential updates as the market and times change.

“India is a particularly emblematic case of similarly impending regulatory needs. The prohibition of betting is widely seen to have been ineffective. In such contexts, certain authority recommendations cannot be overlooked,” ENV Media analysts explained. “Emerging markets (India in particular but not only) will benefit from creating their own Central regulatory framework, a Gambling oversight body, and a Consumer Data protection regulation.”