[Online gaming ban] State cannot legislate on game of skill: Lawyers to Karnataka High Court

Lawyers appearing for various petitioners challenging the online gaming ban before the Karnataka High Court on Thursday argued that the State does not have the competence to legislate on a game of skill (All India Gaming Federation v. State of Karnataka)..The Court was hearing a batch of petitions challenging the Karnataka Police (Amendment) Act, 2021, which prohibits and criminalises betting on and playing games of skill, including online games..On Thursday, the Karnataka High Court heard contentions from various Senior Advocates representing the petitioners. They sought an interim stay on the operation of Sections 2, 3, 6, 8 and 9 of the Act, as well as orders restraining State officials from preventing the continuance of the petitioners’ businesses..Senior Advocate Mukul Rohatgi argued that the petitioners had near fool-proof case. It was brought to the Court’s attention that judgments of the Supreme Court, as well as the latest view taken by the Madras High Court, were in favour of the petitioners' challenge.“I have authoritative last word, a game predominantly/substantially of skill will not amount to gambling and therefore, if you play Rummy physically or online with stakes, it will not amount to gambling.”The Senior Counsel submitted that there could not be a debate on the subject till the Supreme Court changed its view that a game of Rummy, whether physical or online, is predominantly a game of skill and cannot fall within Entry 34 of List II.“I also attack it on the ground of complete arbitrariness,” he argued, stating that with the object of stopping gambling, the scope of the Act had been extended to treating games of chance and games of skill under the same head, which amounted to a violation of Article 14.It was also pointed out that the amendment was an attempt to overreach judgments of the Constitution Bench, which the legislature does not have the power to do.“If you don’t remove the basis, this amendment is at loggerheads with what the Supreme Court has determined. The legislature is attempting to overreach the judgments of the Court,” Rohatgi submitted..Senior Advocate DLN Rao, appearing for one of the petitioners, submitted,“This Court...has held that gambling is not trade and as such is not protected by Article 19(1) (g) of the Constitution. It has further been authoritatively held that the competitions which involve substantial skill are not gambling activities. Such competitions are business activities, the protection of which is guaranteed by Article 19(1) (g) of the Constitution. It is in this background that we have to examine the question whether horse-racing is a game of chance or a game involving substantial skill.”Further, he argued that the State had passed this legislation in the teeth of various apex court judgments.The Senior Counsel sought a stay on the Act’s operation broadly on the basis of three grounds. Firstly, that the inclusion of games of skill was beyond the legislative competence of the State. Secondly, that it was violative of Article 19 (1)(g) of the Constitution, and thirdly, that the explanation of Section 2(7) went beyond the scope of the Act..Senior Advocate Sajan Poovayya, while wholly adopting the submissions made by Rohatgi, submitted that the legislation did not enjoy constitutional protection on the presumption of validity.He relied on the judgment in Independent Thought v. Union of India, where the top court laid down that while a legislation may enjoy this presumption otherwise, if a prima facie question of legislative competency arises, the presumption ceases.“The Supreme Court indicated that they have to relate betting and gambling to a game of chance, because a game of skill can never involve betting or gambling… Madras High Court holds that a State cannot include a game of skill in betting and gambling…Therefore, the presumption argument goes out the window.”Poovayya further argued that in case of a game of skill and wagering on a game of skill, there existed a threshold of a right under Article 19 and the legislation must pass the test of reasonableness.While seeking a stay on the Act, he relied on the judgment in Dr Jaishri Laxmanrao Patil v. The Chief Minister.“There is always a presumption in favour of the constitutional validity of a legislation. Unless the provision is manifestly unjust or glaringly un-constitutional, the courts do show judicial restraint in staying the applicability of the same.”.The Court listed the matter for further arguments on November 23..The petitions challenging the Act claim 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..Previously, the High Court had asked the State government to refrain from taking any action under the provisions of the Act. .No action to be taken under new Online Gambling law: Karnataka High Court to State