No action to be taken under new Online Gambling law: Karnataka High Court to State

The Karnataka High Court on Friday asked the State government to refrain from taking any action under the provisions of the Karnataka Police (Amendment) Act 2021, by which all online gambling and betting has been banned in the State [All India Gaming Federation V. State Of Karnataka].The Amendment Act was enacted on October 5. It bans wagering or betting, including in the form of tokens valued in terms of money paid before or after the issue of the same. Also banned is 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 upto ₹1 lakh. .The Court was hearing a petition moved by All Indian Gaming Federation and others which challenged the validity of the Amendment Act. Junglee Games India Private Limited, Head Digital Works Private Limited (www.a23.com) and Play Games 24x7 Private Limited have also moved the High Court challenging the new amendment. Justice Krishna S Dixit said he would hear all the petitions challenging the Amendment Act on October 27..When the matter came up for hearing on Friday, Senior Advocate Arvind Datar, appearing for the petitioners, argued that the Supreme Court had held that once there is some element of skill involved, then it is not a wagering. It goes into the realm of contract. When it is purely based on chance, then it comes in the realm of gambling and betting, the Court was told. .The petition filed in this regard stated that due to the amendment, a blanket ban has been imposed on all forms of game of skill involving wagering and betting. The Amendment Act also enlarged the scope of criminalization of online games involving virtual currency and electronic transfer of funds, the plea stated.It has affected the fundamental right of freedom of the petitioners to practise any profession or to carry on any occupation, trade or business, the petitioners contended..Further, it is said the Act has the effect of treating 'online games of skill' including chess and bridge games, also as illegal gambling. The Amendment Act club activities that were treated differently and severably from gambling, the petitioners argue. On these grounds, the petitioners asked the Court to set aside the Act as unconstitutional as it subjects permitted commercial activities to the same restrictions as "illegal gambling activities".